In 2021, the growth trend of the game industry is obvious, attracting many developers to invest. However, based on the analysis of the 2022 research report, due to the impact of the epidemic situation, the game investment and revenue decreased, and it was difficult to go to sea in the era of stock competition. The current situation is that whoever can take the lead in acquiring overseas users can take the lead in breaking the deadlock. Therefore, game developers and game publishers are adjusting their game development concepts.
Now it is difficult to obtain huge profits from the Internet industry. Most Internet industries have started to reduce costs and improve efficiency. At present, the game industry has also started such operations. This shows that the competition in this industry has been very fierce.
In 2018, only 10 to 20 million RMB can be used to develop an ACGN game. The game can be listed as a best-selling game through the user’s recommendation. However, according to a financial report, the sales of such games are about 70 million RMB. The threshold for users to download and recharge is also rising rapidly.
The SLG category, regarded as a lifeline by many developers and publishers, has gradually become a gamble. There is a rumor that one of the top SLG developers spends more than 30 million dollars on promotion every month, and most projects will be profitable after 18 months. In addition, it should be ignored that the cost of developers is rising rapidly.
Therefore, how should we gain insights into the game industry in 2022?
Learning from NOT Experiences BUT Practices
It seems that the experience learned from the past can hardly reach the present status.
In the past 10 years, in addition to the demographic dividend, the game industry has been in the middle of innovative products. Card, APRG, MMO, and SLG are appearing. After that, a large number of imitators came to the public.
However, it is difficult for them to follow the steps of Genshin Impact. On the one hand, it seems that people can learn a lot from this game, including the concept of open world, content packaging, large investment, industrialization, multi platform, global distribution, IP and branding. On the other hand, most people feel very powerless. They thought about how they could learn from Genshin Impact.
Not every team wants to compete with miHOYO, so many companies choose a more cautious way to develop products, and then slowly build their R&D strength through continuous cash flow. It is natural for developers to choose SLG.
The fierce competition in the SLG market environment is a recognized fact in the industry. Although it is a strategic game in terms of performance, the core experience is derived from the social and competition of MMOs. It is destined to be a game type with high investment, high return and long cycle, focusing on the precipitation of users and the formation of communities. As more and more manufacturers join the SLG track, the cost of research and operation has been constantly increased, the cost of buying old products has been constantly increased, and the competition for new products has become increasingly fierce through their own theme and minimally invasive marketing.
But it is not easy for developers to stand out in the game field. A series of seemingly differentiated products will eventually fail due to content and gameplay. Therefore, the team seeks opportunities for their products to go overseas.
Unlike mainland China, there are no Android channels or communities such as TapTap. Most of them are almost dependent on purchasing users. They need to conduct tests for nearly six months, which indicates that more investment should be placed at the initial stage and companies should be allowed to have stricter cash flow requirements.
Under the background of more and more competitors in this industry, game companies that want to survive in this new era are doomed to face uncertainty.
Development Path in Gaming Industry
This is not just a question of wandering, but a question of facing the present and finding a path to development. Dramatic changes are long overdue. Every direction has become more and more systematic, and it must be more and more difficult to change the line of business, so that the game company can be competent in the industry.
As we all know, there are still opportunities in the open world, but this track is really difficult to follow. Even the major players in the industry are more cautious than ever before. At present, many companies seek to cooperate with other companies to mitigate risks.
In terms of specific R&D, some people try to go beyond the business “category” to think about a subtle “experience”. In the development process, imitation, following and skin exchange are no longer popular. While mobile games are becoming more and more intense, some people are also paying attention to the direction of Steam and others.
A firm notes that they want to get the global Steam distribution business off the ground. It’s common that publishing a small-volume commercial mobile game may cost at least millions to sign up and tens of millions to promote, but publishing a Steam game may only cost a couple of million. Although the former may have a profit margin of more than ten times, the latter may have a profit margin of less than 100%, but the risk is small. For SMEs, the latter may have the opportunity to survive in this era.
With the decrease of profits and fierce competition in the game industry, every company is exploring the future path and looking for the direction of corporate profits. Although there are many development directions that have not been verified, the general logic is the same. The company is looking for differentiation, specific analysis, seeking cooperation, reducing their own risks, and ushering in a new development.
A Possibly Promising Future in Sector
In 2021, players experienced unprecedented heat and fantasy. In 2022, game players need to review their own development path and launch plans to meet expectations.
If we do not pursue scale and growth rate, perhaps developers will not fall into uncertainty and anxiety. Some people pointed out that as long as the number of teams is controlled and the cash flow is stable, publishers and R&D departments can achieve good results. Any category has a reasonable revenue model, but now people are talking about long-term profits, while striving for the highest LTV and more new users.
Looking ahead, people no longer believe that the gaming industry can still grow with the ceiling. As an industry whose structure is above other industries and economies, many problems are out of control, including economy, financial leverage and policies. Only when the macro environment improves can the industry recover. According to the data of Sensor Tower, the global total revenue from App Store and Google Play is expected to resume growth in 2023 and grow at a compound annual growth rate of about 5.6% in the next few years.
Perhaps behind the uncertainty of the current game industry, there is also a time when such a wind is rising.
