Shulou(Shulou.com)06/02 Report--

Https://36kr.com/p/5207154

Set fire to gold belts, build roads and bridges, no corpses.

Editor's note: this article is from the official account "ID:zhusimaji88" of Wechat, authored by Fox an, 36 Krypton.

Is it the end of "beginning" or the beginning of "end"?

The "half life" of China's game industry has been given away.

NetEase's third-person shooting (later known as FPS) mobile game "Operation Wild" was officially launched for public testing on October 28, 2017, but the game was quickly removed from the shelves shortly after its launch. Then, from December 1 of that year to August 1, 2018, NetEase's share price fell by 188.8 yuan from US $377.6 per share.

On February 9, 2018, two FPS mobile games "PUBG: exciting Battlefield" and "PUBG: whole Army assault" jointly developed by Tencent and South Korea's Blue Hole Studio were officially launched. Among them, "thrill Battlefield" swept the network within six months, and according to aurora big data, the game's active users exceeded 14.8 million in the Q2 quarter of 2018, but the version number has not been released for a long time.

On August 13, 2018, Tencent WeGame platform announced that "Monster LIEREN: the World" had been revoked by the relevant agencies because some of its contents did not comply with policies and regulations, and was removed from the shelves and suspended from sale at the request of the competent authorities.

On Aug. 16, 2018, national regulators temporarily froze the approval of version numbers of online games because of concerns about violent content and DUBO. Affected by the two works, the share price of Tencent Hong Kong Stock Exchange fell from HK $475.6 to HK $252.14 as of October 30th.

On September 30, 2018, Tencent launched its third structural adjustment in history.

From December 29, 2018 to April 10, 2019, the State Administration of Press, publication, Radio, Film and Television (SAPPRFT) issued a total of 12 batches of game version numbers after restarting the version number, but "stimulating Battlefield" was not included 12 times in a row.

On May 8, 2019, "exciting Battlefield" was covered by the main body of "Game for Peace", a new game just approved by Tencent in April 2019, and withdrew from the historical stage together with "Army assault". After 453 days of public testing, the commercialization of the game came to a successful conclusion. On the same day, the share price of Tencent Hong Kong Stock Exchange soared to HK $395.

At a time when the share prices of Tencent and NetEase have lost almost half their lives in the past year, outsiders attributed Tencent's experience at that time to its partners through self-media "agenda setting" and then attributed to Ma Huateng's "half-life" foreign strategy publicly pointed at in the "riddle".

As a result, the discussion on Tencent's investment strategy has become an official case of public concern since mid-2018-even after Liu Chiping responded and decided on February 20, 2019 that "investment is Tencent's core strategy." the controversy has not completely dissipated.

But another question under the "answer to the riddle" is where does Tencent's "half-life", which was left for itself instead of being handed over to its partners, was lost almost at the same time in 2018?

The answer is and can only be a game.

An interesting coincidence. Before Ma Huateng coined the word "half-life", its earliest origin in China's Internet field happened to be the name of a game-derived from the Chinese translation of a famous series of shooter games developed by the American ValveSoftware Company (later V Society) in 1998.

The masterpiece of the "half Life" series: "Anti-terrorist Elite" (CS) is the most influential FPS work in China and even around the world before the game becomes famous. As China's first-generation Internet leader who started a business in the late 1990s, Ma Huateng, who usually loves to play games and especially prefers shooting games, can not know the name of "half a Life".

More coincidentally, Steam, a comprehensive digital entertainment distribution platform that has an unprecedented impact on the global digital entertainment industry and a huge impact and direct threat to Tencent's interactive entertainment business, happens to be the work of a company that has made a "half-life".

In 2017, Tencent Interactive Entertainment was hit hard by multiple factors, which led to problems in game revenue and led to a stock market crash, which became the real trigger for the incident-"PUBG" (later known as PUBG) and "Monster LIEREN: the World" were both the top sellers of the Steam platform in 2018 and 2018, so there is a direct connection.

Since ancient times, a hero must have a career. If not ruthless, the foundation is unstable.

There is no denying that Tencent Interactive Entertainment (later called IEG) has accomplished a world business miracle that is almost impossible to replicate in the past 17 years. Even overseas, Tencent Games's industry influence far exceeds that of QQ, even Wechat--, which has 1.1 billion users, because its dominant position is irreplaceable. But when gaming is the source of revenue for all Tencent's businesses, the controversy and notoriety caused by its actions in competing for the global gaming market has become an unavoidable topic for the company.

Today, when there are major problems in the game business and become a focus topic again, a review, investigation, discussion and review of Tencent Games's history over the past 17 years is inevitable.

Looking back on yesterday, who really opened the first page of Tencent Games? What are Tencent Games's values? In front of the strong opponents, how do they rely on the strategy and ZHANSHU means to defeat so many opponents?

Looking back today, what has Tencent Games experienced in the historical turning point from PC games to mobile games? What role does Tencent's investment, which has been criticized and questioned, play in the game field? After becoming the new ruler, what extraordinary measures did they take to maintain their market advantage?

Looking forward to tomorrow, what is the process behind the two works that led to the stock market crash? Where do the future hidden dangers and opponents of the game king come from? Will the current problems trigger a third, fourth or more crisis?

Duchamp has a saying: "the art before us: either plagiarism or revolution." "

For a great empire born suddenly with nothing, its real "fear" is the panic "revolution" that comes from the chaos of the world.

01. The rise of the Empire

In the Q2 quarter of 2009, an earth-shaking change took place in the split pattern of China's game market like the warring States period:

According to the financial report, Tencent Games's business market share finally beat Shanda by a narrow margin of 0.2 per cent this quarter, becoming the highest-earning game company in China for the first time in history, a record still held today. On the other hand, due to the earlier agent "MU", the ninth city (later known as "Nine cities"), which had the agency of "World of Warcraft" at that time, dropped rapidly from fifth to eighth, and its income dropped 24% from the previous month.

Dozens of days later, NetEase Company took over the agency of World of Warcraft, which was regarded as a life in Nine cities without warning, resulting in a great loss of vitality and collapse of Nine cities. At this point, NetEase stood side by side with Tencent and laid a pattern of dichotomy until today.

The cause of this variable needs to start in 2001, eight years ago.

When the global dotcom bubble burst in 2001, Ding Lei suddenly announced that he would cut SP, which accounts for more than 30 per cent of his company's revenue, and began to switch to an unfamiliar gaming business in the controversy. This extremely abnormal decision stems from his innate sense of suffering-it is only a matter of time before the three major operators are difficult to serve, and it is only a matter of time before SP services, which users are unwilling to pay for and generate grey income in disguise, are likely to become a DINGSHIZHADAN for related companies in the future.

Interestingly, in 2011, 10 years later, Ding Lei suddenly cut off the medical advertising business with revenue of hundreds of millions of yuan in the same way. A senior executive of NetEase company who attended the meeting at that time recalled to Zhu Simaji that at the meeting the business had been jokingly called by Ding Lei:

"if you hold it in my hand, I will blow up your face at any time, and then splash shit all over my face. "

Finally, the ZHADAN of SP business was officially detonated at the CCTV 315th Gala in 2004. with the public condemnation of the three major domestic operators, the rectification action of the Ministry of Information Industry-Sohu, TOM.COM, Sina and more than a dozen companies were hit to varying degrees. Unexpectedly, the one most affected by the above-mentioned enterprises was Tencent, which accounted for 56% of total revenue at that time, and then Tencent suffered its first stock market crash since its listing.

China Mobile, which borrowed umbrellas on sunny days and collected umbrellas on rainy days, took the opportunity to renegotiate with Tencent because of the 315 incident. The aggressive renewal of the mobile contract in proportion to the overbearing terms of merging the mobile QQ business eventually led to the collapse of the cooperation, and the two companies fell into a feud.

So a year later, Tencent General Office launched the first major structural adjustment in history: the biggest highlight of the document "Shen Teng 38" on October 24, 2005 was the R-line under the framework of the QQ R & D center led by Free Wu Xiaoguang, and the B3 system, which was first unveiled independently by the value-added business department famous for QQ Show after merging: Tencent Interactive Entertainment IEG was officially born.

It indicates that Tencent has begun to strategically tilt the business direction of core income from telecom business to TOC value-added service including games. A very similar incident was the third structural adjustment of Tencent in September 2018, 13 years later-the CSIG business group, which was commanded by Dowson Tang Daosheng and made its debut as an independent army, as a symbol of Tencent's strategic transition to industrial interconnection business.

From the perspective of simple business model, Tencent and NetEase are representatives of Chinese product Internet companies, and they are not pure game companies. The former is famous for QQ, while the latter is famous for making China's first-generation e-mail business and portals. Putting aside the external causes of SP's business difficulties, the internal cause that ultimately prompted the two companies to enter the game track is not the personal likes and dislikes of Ma Huateng or Ding Lei, but based on the overall perspective of Internet companies:

Internet industry can achieve a high degree of commercialization of business, there are and only games. Advertising business always has a ceiling and is greatly affected by economic cyclical fluctuations, but games, as one of the few entertainment industries in the TOC industry that can avoid the risks mentioned above, belong to a competitive position. Therefore, it can be said that all Internet companies, except those that have already played games, are on their way to play games-the latest example that is happening is the "byte jump" that began to enter the game track through foreign investment in 2019.

Time goes back to 2001, when NetEase, who was determined to play games, immediately targeted the United States. Ding Lei himself found EA negotiations and hoped to enter the game track at a low cost by acting for the world's first online game, "UO Network Genesis". However, due to the lack of experience and negotiation capital of NetEase, an unknown Chinese Internet company with no past cases at that time, as well as the horizontal pathological game market of piracy in China, the experience of agent publishers such as Ogilvy Electronics made foreigners see no hope of paying, and Ding Lei was finally snuffed out.

So in the case of no way for the agent, NetEase acquired a game studio that later made "the world" in Guangzhou as the primitive accumulation of the team, and then began the road of self-research. To sum up, NetEase's core ideas at the beginning of the game are as follows:

It is believed that the best way to solve the problem of game piracy in China is to force players to pay for online games in the form of online servers.

Game content based on China's first generation of online aborigines obsessed with online chat room model based on MUD martial arts games, through Chinese-style MMO-RPG games as the core research and development direction and theme, based on self-research as the foundation. Emphasize the long-term operation of the work, usually with a goal of 10 years.

Gradually establish an incubator model, and set up an art center, a user experience center, a technology center, and an operation center as background support, and the studio focuses on playing and content, so it can launch a large number of new projects. At the same time, each independent studio can incubate new works of no lower level than its last work according to its own requirements and standards.

NetEase started his own research, but it turned out to be a complete victory.

Its first game "A Chinese Odyssey" series is adapted from the martial arts game of the super IP-- Zhou Xingchi movie of the same name, which is the founding father of Chinese online culture. As an independent release of the first game is the first self-developed game.

The success of "A Chinese Odyssey 2" ("A Chinese Odyssey 1" was offline due to technical problems) gave NetEase's mutual entertainment department enough confidence to follow the road of self-research, which was different from the agency mode of other companies at that time, especially in the same period, another online game "Elf Online" developed by NetEase agent from South Korea was forced to stop serving due to plug-in problems and finally stopped after 300000 people were online at the same time. This makes NetEase have a strange cognition that only the road of self-research can work.

Shortly after the victory in the first battle, it was even more fortunate that Ding Lei met the most important key gentleman of NetEase game so far-- Ding Yingfeng (now the co-president of NetEase Games). Shortly after the launch of "A Chinese Odyssey 2", he put forward a "better idea" about the series of online games of "Journey to the West". Then he and his partner Xu Bo (now chairman of Duoyi Network) jointly led the team to make the first self-developed phenomenal online game masterpiece in Chinese game history at the end of 2003, with a history of more than 310 million registered users and an all-time high of 2.71 million online users.

With the success of these two works, NetEase established the initial position in China's game industry. The success of Guangzhou NetEase's game indirectly affected the sprout of Tencent Games's business next door, and gave birth to the status of master and apprentice between NetEase and Tencent in the process of game development, as well as the situation of future generations competing for the world.

Tencent Games, how was it born?

In the spring of 2002, Building 402, Building 2, Huaqiang North Saige Science Park, Shenzhen. Due to the success of Shanghai Shanda and Guangzhou NetEase in the game track, the head office of Tencent began a big discussion on the game business about what to do or not to do, and how to do it.

On the question of whether to do it or not, the view put forward by David, Tencent's chief exploration officer, was the most lethal at that time:

The time is ripe for China to operate massively multiplayer online games, and the communication of QQ in the form of text, pictures, online video and voice chat is too black and white, because the communication between people in the game world is multifaceted and more in-depth, the rise of online games is a disguised threat to QQ, and what Tencent needs to do is to better combine QQ and games while playing games. "

However, in discussing the issue of how to do it, there were serious differences between Tony Zhang Zhidong, who is in charge of R-line, and Zeng Liqing, who is in charge of M-line market. Tencent's contradiction between R-line and M-line has once again spread to new business-- because games are not something that can be made money, and its short-term revenue through agents and long-term returns from independent research and development are worldwide problems. There has never been a difference between the two modes. In the end, Ma Huateng chose an intermediate strategy similar to the prototype of today's IEG "horse racing system":

In terms of M-line, Zeng Liqing led the team to try to issue overseas online games, while in the same period, R-line set up a research and development team within the Free Wu Xiaoguang team to see if it was possible to find a breakthrough through similar simple casual games. Regardless of the order of the two lines, everything is result-oriented.

Taking the lead on this side of the M line, Zeng Liqing quickly found Wang Yuan, an old colleague before he started his business, and then Wang Yuan led the team to set up Tencent's first Shanghai branch in a mecca full of Chinese online gaming giants. and follow the agency model of the Shanghai online game company at that time, and the direction of introduction is also the Korean online game with visual art as the mainstream aesthetic at that time. In terms of type, I chose the most popular MMORPG (massively multiplayer online role-playing game) at that time.

At first, Wang Yuan's team took a fancy to A3, a Korean full-3D role-playing game, but because Tencent, which had just made a profit at the time, had a limited budget, it had to be given up to a higher-bid competitor, Haihong. In the end, Tencent spent 300000 US dollars and had absolute dominance in South Korea, representing another full 3D role-playing game, Triumph, which ranked fifth in South Korea. it became the first online game in Tencent's history to be released in China-opponents including Shanda, NetEase, Nine cities, Giants and so on.

But "Triumph" did not bring the first victory to IEG as the name did, on the contrary, it was a complete rout.

A veteran from the founding team of IEG told Zhu Simaji that the reason for the failure of "triumphant return" at that time was simply to sum up that in the absence of experience as a game agent, the opponent was best at competing with the game department on the main battlefield of the opponent, and finally paid a terrible tuition fee. Reviewing the reasons for the defeat of this war, it can be summed up as follows:

The client installation package for full 3D games is too large. In the case of limited network bandwidth speed in China. Triumph's installation package close to 1GB limits users' downloads and lacks follow-up from ground troops in Internet cafes, which has long been the main battleground for QQ users before the war.

There are operational mistakes in the monetary system and the incentive system. In the course of the operation of "Triumph", there was a farce in which the rare material "diamond" was given away for free, which led to a collective protest by veteran players who had spent months typing the material. finally, without a good official explanation, the core veteran players left early.

At the beginning of the selection of works, blindly pursue the visual effects of 3D works, and ignore the performance of the user host and the poor level of the Chinese network at that time. As the triumph of the PC game needs to be loaded into the client through the server, this technology wastes a lot of traffic, resulting in serious network stutter, leaving a bad reputation for "card spin".

However, while the M-line "triumphant" got off to a bad start and was defeated, the R-line neatly won a big victory-- at that time, Sun Yuyang, a 24-year-old northeastern from the QQ R & D group, came forward and almost led the development of Tencent's QIPAI casual game platform on his own, thus becoming the first key gentleman in the history of IEG.

The evidence of "Triumph" racing with QQ Game's team at that time is that the game is not all logged in by QQ user accounts.

Due to the unfavorable frontal attack strategy adopted by "Triumph", Ma Huateng put forward a new idea at the meeting-"can we try the exploration of QIPAI online games in the way of a team?" The idea immediately received unanimous support from other members of the General Office, including Zhang Zhidong, who had previously expressed strong opposition.

So Sun Yuyang and three people, including his partner Zeng Yu (former vice president of Tencent IEG), developed the first version of QQ Game platform, and Lianzhong broke out with Lianzhong, China's largest QIPAI casual game platform at that time. Unexpectedly, Tencent won the first of the three decisive victories on the game track so far.

So how did QQ Game defeat Lianzhong?

A core member of QQ Game's R & D team at that time shared the story of the battle with Zhu Sima Ji:

Lianzhong was the strongest QIPAI platform in China at that time, so our initial idea was to learn from their model and then play with it, but the data skyrocketed after the first version was launched, and as soon as we got the feedback results, we immediately ran to our boss and said, "it's very casual to surpass them." We changed our strategy and took a differentiated route-- online Happy Bean system, Flying Chess, and SUOHA.

Today, some people still say that at that time, QQ Game crushed Lianzhong entirely on QQ traffic, but at that time, only 1 million people were online on QQ daily working days (at the peak of the grand legend, the number was as high as 670000). The truth is that 20% of the people who logged on to QQ Game never used QQ, which means that QQ Game's customers accounted for 20% of new QQ users.

In other words, QQ Game has even become an active tool for QQ at this time-some users have signed up for QQ to play games with their friends. Interestingly, when QQ Game broke through 1 million people online, the number of people online at the same time on QQ had reached 10 million.

So we always thought that what really broke Lianzhong was the happy bean system we established at that time, and the existence of this system finally led to the popularity of playing SUOHA for a long time at that time. But Lianzhong, there is no virtual currency system, no QQ, no SUOHA. "

QQ Game's victory in the first battle is obviously gratifying, but internally, it is a victory from the R line to the M line. Sun Yuyang narrowed the gap with Lianzhong through a set of monetary system, and suddenly closed the exchange system of game currency and Q coin before the online gambling ban storm on January 9, 2007, and finally washed it ashore.

The most valuable experience of this battle was that IEG's early team summed up a strategy different from that of other game companies, which made almost all the games released by Tencent look "off the table" in the six years before the launch of "LOL"-a non-mainstream game company with a large number of users and centered on leisure and entertainment games.

And this with the emphasis on heavy hardcore players, to the core works as the selling point of NetEase, Shanda, Nine cities and other companies form a very sharp contrast. But in fact, the learning object and architecture of IEG is indeed NetEase.

Since I took NetEase as my teacher, why did I finally find a completely different or even opposite path from NetEase?

"the reason is simple, because QQ users are the core of our game. They love Japanese and Korean style, so QQ can design the UI interface as Japanese and Korean style, QQ Show is also Japanese and Korean style, similarly, since QQ users like fighting landlords, QIPAI, happy MAJIANG, what else will they like? So the "four masterpieces" are further expanded on the basis of this user.

Even in 2005, we also made the first MMORPG masterpiece-QQ fantasy painting style is still a long-running leisure style. At that time, QQ users had already exceeded 100 million, and at the same time, Shanda and Jinshan made almost three very similar works. As a result, the QQ fantasy background data feedback on the day of launch was unexpected, and 550000 people were online. That means QQ Game not only educates QQ users who love this part of the game, but also pulls rival players in.

What are Tencent Games's values? That's what our users need us to do. To this day, you will find that Arena of Valor and PUBG are also non-heavy games that can end a battle in 45 minutes, because we never emphasize user obsession, on the contrary, it means to leave after using it. "

It is worth noting that from the type of works: the core works of traditional Chinese online games, such as Shanda, Nine cities, NetEase, Giant, and perfect, basically revolve around MMORPG, so the target customers competed by these companies belong to the same group of hardcore players under the same type. When Shanda leads the industry, the source of customer acquisition for its new works is mainly from the transfer of its phenomenal work "Legend", while it is the same for Nine cities to get customers with the help of "World of Warcraft" and Giants with the help of "Journey" customers.

NetEase's claim that it is obtained by customers of "A Chinese Odyssey 2" and "Fantasy Journey to the West" is also true, but the difference is that as an integrated Internet company, it has portals, mailboxes and other channels (data show that, in the early days, the conversion rate of promoting online games through portals and mailboxes is only 2%), and customers of self-research models have more opportunities than those other companies mentioned above rely on less stable agent distribution models.

But even so, when the number of China's first-generation hard-core players contested at that time was compared with the population base of China's first-generation Internet users, they were still a minority and highly competitive stock market. Therefore, even after NetEase has completely defeated many competitors and cut off hardcore players who have almost the entire Chinese game market, its volume is still less than the revenue of Tencent, which emphasizes non-heavy users-because its top-level design and values have been determined to transform a large and unreclaimed incremental sinking market since the era of QQ Game.

With the release of document No. 38 of Shen Teng in 2005, the value-added business department, which both belonged to the R line and made QQ Show's fame and fortune, merged with QQ Game's R & D group, the independent IED first accompanied by the promotion of the company's status and therefore had a stronger potential energy, while the then head manager of the value-added development department, Huawei-born Mark Ren Yuxin became the first person in charge of IEG.

At this time, the value-added development department is good at operation because of QQ Show's experience in cashing out of thin air, and the QIPAI game platform made by QQ Game's R & D group is obviously better than R & D, so after this round of integration, QQ Game's previous achievements have been further expanded, especially after the addition of the blue diamond system, the first bucket of gold in the game track also began to be excavated. But fundamentally speaking, it is an indisputable fact that QQ Game was eaten by the value-added business department in structure, and Sun Yuyang's departure 3 years later is also closely related to this.

Going back to the Q2 quarter of 2009, behind the historical moment when Shanda was surpassed by Tencent, it was the direct result that IEG at that time launched four decisive victories in a year. DNF Underground Warriors, CF Crossing the Line of Fire, QQ Xuanwu and QQ Speed were known as the "four masterpieces" of IEG milestones, but at the same time they were also notorious for intellectual property infringement and plagiarism, and even triggered a complaint from rival Shanda at that time-this lawsuit became an industry event of great concern in the industry at that time.

First of all, how did the four masterpieces that made Tencent king come from?

A veteran from the former IEG checked the true source of the four masterpieces from Zhu Sima Ji:

"of the four masterpieces, only one was developed by ourselves, and the rest are the results of agency and investment.

The introduction of DNF is a pure coincidence. The story is that our marketing director Richard (Chen Guang, now Shanda Senior Vice President of Games) recruited a girl. She used to work for a Korean game company, and her boss happened to be the founder of DNF. One day after she came to Tencent, she suddenly told us that her former boss had made a good horizontal version of online games and asked us if we were interested in contact. The boss said no problem. So the cooperation between the two families began because of the girl's relationship.

CF is because we considered the multimillion-dollar offer too high when we talked about AVA ("King of the Battlefield") for a long time, so South Korea gave us a free CF as a gift before we signed the agreement. The most important thing about CF is that the content modification and leadership have been given to us, which is unimaginable in the past. In the end, I didn't expect AVA to be popular and CF was GAIHUO.

QQ Xuanwu is not what we did, it is the product of a merger, the other party is Beijing Yonghang Technology, as for the follow-up to be able to surpass our competitors because our overall operation link is not bad. In the same period, we also acquired Internet domains and later launched "Huaxia online".

Only QQ Speed, which is the work of Colin (Yao Xiaoguang), is also the earliest of the four famous works to be put online. "

Secondly, is QQ Tang plagiarizing or using it for reference?

"We really developed QQ Hall ourselves, but we didn't use any of its code and pictures. Although the two ideas and names are very similar, the legal standard for plagiarism is 75%. In the end, the court concluded that the core reason why the similarity is lower than 50% QQ Hall is that Tencent has a long-term advantage of backwardness. After all, the IP and brand power of QQ itself is much stronger than Shanda. And the operating experience of our half-body position is much better than that of Pao Pao Tang.

Compared with plagiarism, QQ Tang is more regarded by the industry as an unfair competition from Tencent to Shanda.

My understanding is that if plagiarism can kill the original, does it mean that the original is too bad, or does it mean that the standard of the copycat is higher than that of the original? If a person makes a chair and then sues all the people who later made Mazar, sofa, computer chair and bench for intellectual property infringement, I think that person may have confused the difference between the expression of ideas and the idea itself. "

In the end, the court rejected Shanda's claim based on objective facts, and the balance of victory was on Tencent's side. However, if we simply put aside this lawsuit, based on the experience of Tencent's confrontation with competitors such as Lianzhong, Shanda, Jiuyou, perfect, Giant and NetEase during this period, we have also found the details of a "follow-up ZHANSHU" commonly used by Tencent:

After an idea was made by its domestic and foreign rivals, Tencent used to create a second time based on the idea itself, and finally made a copy that surpassed the original work in some details, but seemed very close to the rival's work. After that, Tencent finally completed the post-strike by virtue of its comprehensive advantages in operation, traffic, distribution channels, capital, public relations, technology research and development. And this kind of ZHANSHU is often used in the product research and development of Tencent's business lines other than games, and it works all the time. And the end result is to lead to an uproar since then, "the dog's Tencent article" and the 3Q war as the core of the full-scale conflict.

However, behind the four masterpieces defeating their opponents, in addition to the advantages of top-level strategic design, the effectiveness of the follow-up ZHANSHU and the accurate judgment of the agent introduction process, another part that has been seriously underestimated and has never been mentioned is that Tencent had a thousand-man push force from 2002 to 2012. The main battlefield of this "Blue Iron Army" is Internet cafes in major cities in China. In the large-scale confrontation with 51.com a few years later, this unit played the role of a fire brigade.

"the most powerful push at that time was the number of giants. Why the ground push? Because the network condition in China was bad at that time, downloading had to be done by people for a few hours, more than ten hours, and when the installation package was as big as that. Every computer in the Internet cafe has to copy our latest version of the games, including the four masterpieces, QQ fantasy, and many subsequent works, including LOL, to a large extent, the smooth start is closely related to the advance installation of the Internet cafe. Although it is the product of the last era, it is not far away from us. "

An early member of the former Tencent IEG pointed out to Zhu Simaji that Hangzhou Shunwang Technology received a strategic investment of 130 million yuan from Tencent in 2018, and the company was built early on by laying a system in Internet cafes, and this strategic investment is clearly aimed at further strengthening Tencent's continued dominance in the sinking market, especially Internet cafes, which is the traditional position of Tencent.

Before and after the release of the four masterpieces, IEG has also undergone a series of major changes in personnel. At the end of 2007, Steven Ma Xiaoyi joined Tencent after introducing legendary 3G for Guangtong. At the same time, Zeng Liqing, COO of one of Tencent's founders, who had been in charge of M-line for a long time, resigned on his own initiative, and four years later COO officially handed over to Ren Yuxin, the then head of IEG who was born on R-line. Sun Yuyang announced his departure in mid-2008, and the month before he left, he gave IEG a super gift-the Bole Award inside Tencent, where he poached Yao Xiaoguang from Shanda.

A few months later, a work called "League of Legends" revolutionized IEG, and Tencent became a frightening ruler from a fledgling challenger.

02. The king of terror

At the beginning of any Chinese Internet track, Tencent licked the milk on its plate like a quiet little kitten, but as it grew older, the cat's claws began to scratch people until one day people really paid the price of blood.

This kind of story really happened in the game track after 2008.

If QQ Game and the four Masterpieces beat a series of competitors before 2008 is only a microcosm of aggressive operation strategy, then Tencent really showed its claws after 2008. During this period, two industry events have greatly touched IEG's future ZHANSHU and strategic decisions: the first is the well-known 3Q war, while the other is a battle between old rival NetEase and Jiucheng around the agency right of "World of Warcraft", which is related to the life and death of the enterprise and even the status of the whole industry.

Nine cities, which relied on the "virtual city" community in its early years, became famous for acting for the famous Korean online game "Miracle MU" to enter the game track in 2002, making it one of the few strong game companies in Shanghai that can compete directly with Shanda-the Nine City Company even moved its office building to Building 3 of Zhangjiang Microelectronics Port, No. 690 Bibo Road, Pudong New area. Be a neighbor with the grandeur of Building 1: the two sides smell each other but have no contact with each other.

The wild behavior of the nine cities is inseparable from their legendary boss, Zhu Jun, a native of Shanghai. This "crazy" boss Zhu won the agency of World of Warcraft from Blizzard at an exaggerated price of $14 million in 2004 (Chen Tianqiao won the "Legend" agency for only $300000). It was this high-risk, high-investment, high-return gamble that directly brought Nine cities to the top of the industry and sent the company to NASDAQ, and Zhu Jun was once close to Chen Tianqiao.

But compared with the game track, later, as the owner of Shanghai Shenhua team, he was more exaggerated to introduce the football superstars such as Anelka and Drogba into the Chinese Super League, which amazed Chinese fans.

Zhu Jun's craziest move so far was that he played directly for Shenhua as the boss, taking part in a number of games against Premiership giants Liverpool. By comparison, Zhu Jun's announcement of the all in blockchain in June 2018 and the rumor of a joint venture with Jia Yueting in March 2019 to produce electric cars are less impressive and less exaggerated.

"in fact, this boy looks down on the game, only the game as a tool to make money, the heart is still more love Shenhua, the Premier League. At that time, the reason why Blizzard did not give World of Warcraft to grand in China, the core grand publisher background was the impression of a potential competitor in Blizzard's eyes, so from the beginning of Nine cities to the later NetEase, you will find that both issuers are developer backgrounds, and Blizzard belongs to the same industry, but just under Blizzard. "

Zhu Jun in Shanghai Shenhua robe

A senior from the Chinese game industry told Zhu Simaji that due to the extremely high benefit sharing + sky-high price agency fees and no threat to Blizzard in Nine cities, at the same time, Blizzard's former partner, Ogilvy Electronics, had no experience in online game agency. finally drove Blizzard to choose Nine cities.

But why 4 years later, Blizzard will stop the cooperation with Nine cities and choose NetEase?

In 2007, Blizzard began to signal with several domestic game companies that it intended to terminate its contract renewal with Nine cities for the first time in the United States, starting with the user experience problem caused by Blizzard's operation of the agent. but they also thought from the user's point of view: the delivery of the game's database after changing operators will be very painful, and the process is long and poor.

So at that time, Blizzard itself did not fully decide whether to change partners at the expense of its most valued user experience, until the second time Blizzard signaled in 2008 that they were determined to terminate the contract renewal. because Blizzard believes that the impact of Nine cities on the user experience is more painful than that of changing agents. Of course, there is another detail here. At this time, the shareholders of Nine cities are Blizzard's biggest competitor-- EA. "

A partner from Activision Blizzard told Zhu Sima that there are still many details in the process of competing for agency between Nine cities and NetEase that they are too sensitive to expand. But he also pointed out that NetEase from making a decision to the final takeover is not just as easy as imagining a hot potato. Because "World of Warcraft" enabled NetEase to inherit his Chinese market leadership and almost 90% of his income directly from Nine cities, Ding Lei inadvertently committed a taboo of "breaking people's financial roads, such as losing money to his parents". The opponent is Zhu Jun, who is known as "crazy" in the industry.

Therefore, Ding Lei's decision to win the agency of World of Warcraft in 2009, Ma Huateng, who went against his will and let QQ users choose one of the two during the 3Q war in 2010, and Jack Ma, who vowed to be uncompromising during the siege in October 2011, have become one of the three major choices on the Internet in China.

Watching the whole process of Tencent IEG, the biggest thinking about this battle is how to maintain a long-term and stable cooperative relationship with its partners, especially with CP at home and abroad. The end result caused by the loss of control of the content is Nine cities.

In view of the industry impact that NetEase took over from Nine cities and then cooperated with Blizzard. In July 2013, Tencent indirectly bought a 6% stake through Activision Blizzard's largest shareholder Wei Wandi, paving the way for its "call of Duty" series on the one hand and strategically restraining NetEase to a certain extent on the other.

Strategic investment has become the first super weapon offered by Tencent since 2008.

On the question of whether to discuss Tencent's financial investment or strategic investment (related contribution: King of War Investment), Liu Chiping made a formal response in his speech at Tencent Investment Annual meeting and IF Conference on February 20, 2019:

If Tencent wants to control everything and do everything, it is not a dream, but a delusion. Investment is the core strategy of Tencent.

Liu Chiping-Tencent Investment Annual meeting on February 21, 2019

Investment layout of Tencent Interactive Entertainment-finishing of Zhu Si Ma Ji

Red Flag: M & A $: listed enterprises after investment!: strategic investment after listing

The game is clearly excluded from the saying that "I don't want to control everything."

When in the game track that Tencent regards as half a life in their hands, Liu Chiping and Tencent invest in a mild style in e-commerce retail, toB business, social networking, content and other races, not pursuing control over the ownership structure of the invested enterprises, emphasizing empowerment, building an ecosystem, connecting everything, on the contrary, with a strong purpose, aggressive, exclusive, with the goal of maintaining the stable development of the business. To achieve the ambition of long-term rule. However, this kind of investment mode of Party A's mentality is precisely the essence of war investment.

It is precisely because Liu Chiping made a decisive move to help IEG out of danger again and again in the past 17 years, and even turned the situation around with a war pitch. During the 10-year period from 2008 to 2018, Tencent's five key battles were the most representative:

From 2008 to 2015, he finally took control of the American fist studio that produced "League of Legends" in the form of strategic investment, thus winning its operation and actual control in the Chinese market.

In July 2012, Tencent bought a 48.4% stake in Epic Games, which produced works such as "War Machine" and "Fortress Industry" for $330 million, making it an associate of the Tencent Group.

From 2011 to 2016, supercell, the Finnish mobile game developer of "Tribal conflict" and "Royal War", was controlled by capital operation.

In 2017, we bought shares in two former mortal enemies-Shanda and Jinshan (Xishanju) twice through capital operation.

From 2016 to 2018, it made four moves against Douyu and Huya, helping Tencent win almost all the market share of e-sports Live in the Chinese market.

There is no doubt that "League of Legends" (later called LOL), which helped Tencent win its second decisive victory in China, is a classic textbook case. The birth of "LOL" is directly related to DOTA, a stand-alone real-time strategy game "Warcraft 3" launched by Blizzard in 2002, while the creativity of DOTA originated from the large-scale multiplayer competitive game mode (MOBA) completed by foreign player "Ice Frog" with the help of the self-made map in "Warcraft 3". However, the huge impact of this popular revolutionary game did not make Blizzard feel the commercial potential behind it, let alone compete for the intellectual property rights of DOTA, but it happened to be picked up by Tencent on the other side of the ocean.

League of Legends also changed Tencent's strong color from Japan and South Korea to Europe and America in the field of art.

In 2007, as stationed in the United States, NetUniversity was surprised to learn that RiotGames, a fist studio in Santa Monica, Los Angeles, was developing a DOTA-like MOBA game, so under the advice of David and the direct leadership of Liu Chiping, Tencent became one of the shareholders of the fist studio with $8 million in 2008, and "LOL" was quickly introduced into China, winning the window time to compete with DOTA.

By mid-2009, when ice frog, the real developer of DOTA, began to work with the aforementioned V Society to develop a sequel to DOTA2, China and even the Asia-Pacific market had already been occupied by "LOL". Until four years later, when DOTA2 arrived late and reached an agent release with Perfect World, China's game market had already entered the era of mobile games.

Looking back on the case, a senior person from the domestic game industry commented to Zhu Sima Ji:

"LOL's success comes from Chinese-style innovation. Tencent has turned Dota, which needs a competing platform, into a complete online game, and they have made a meaningful simplification. The problem with DOTA is that it is too difficult to use. Tencent won the market with the simplified reduction of difficulty, and this simplification affected the birth of Arena of Valor.

If the difficulty of dota is 100 dota LOL is 40 minutes 50, and Arena of Valor is only 15 at most, and the return to Tencent after each simplification is the harvest of more users, League of Legends's simplification has established Tencent's first position in China, while Arena of Valor's simplification has established the first position in the world.

Of course, most manufacturers also want to do simplified work, but have to admit that Tencent handled it very well. If Tencent harvested the original DOTA users after copy at the beginning, the result may not be what it will be like later. In fact, all their actions are aimed at a wider market and users. The mistake made when dota2 competes with LOL is that they do not realize that the game needs to be simplified. Therefore, V Society in order to ensure that the existing hardcore player user base on the basis of only a little innovation, and finally lost its own Chinese market.

With regard to the intellectual property dispute between League of Legends and DOTA, I can only say that the power of the author and V Society is still very limited. Assuming that the ownership of DOTA was made clear at that time that it was not the author but Activision Blizzard, Tencent's lawsuit might have come. "

In July 2016, NetEase unveiled his first mobile game "World" with its next-generation 3D engine, Messiah, at the E3 exhibition in the United States, but NetEase's choice to release the self-research engine is to a large extent indirectly related to Epic, which was previously controlled by Tencent.

Four years ago in 2012, EpicGames became an associate of Tencent Group, and an important asset of the company is the intellectual property rights of the "illusory" series of game engines used by a large number of game developers at home and abroad.

If competitors do not take active self-research engine to counter in time, once Tencent takes corresponding measures in the future, it is very likely to lead to the tragic situation that it has no game engine available. And the company developed a kind of Battle Royale Games "Fortnite", once became the "PUBG" the best, but also the closest alternative.

It can be learned from this case that at this time the direction of Tencent's strategic investment is not limited to the single dimension of CP, but to the source of the industrial chain. The King of Terror is infiltrating every inch of the gaming industry.

Until a new era of revolution, suddenly came. Revolution is not only an uprising, but also an act of violence in which one level overthrows another.

China's first Battle Royale Games-"Xiaomi Gun Fight" developed by Xishanju also uses the Unreal 4 engine.

In 2011, there was an exchange of fire among PC games, page games and mobile games in China's game industry. Although Tencent relies on "League of Legends" as the overlord of PC games, it does not show its dominance as the king of games in the two positions of page games and mobile games, on the contrary, it shows signs of falling behind. Coincidentally, their opponent NetEase is also in a similar state of lag.

"at that time, the core of the wind was the page game, because the PC game was defeated by Tencent to do mobile games, page games. At that time, the mainstream was not optimistic about mobile games, and felt that the screen size (the iPhone4-4s was only 3.5in) was not appropriate, so they thought it would take a few more years. The core reason for page swimming is that at that time, these people who did SP came back to play games, and the final carnival of flow play broke out at that time. Today, there is basically no way to live without innovation, but at that time there was no content to take a chance.

The concept of page game is actually advanced. We can see that today's Tencent Cloud game is actually a final form of page game in the case of complete infrastructure, but the domestic network speed at that time was not as fast as it is today. so at that time, the page game wanted to fight a national war with thousands of people through the web page, and the false propaganda ended up with a large area of stutter and a bad user experience, but these people were indeed released by satellite at that time.

Therefore, from today's point of view, NetEase and Tencent are not involved in this pool of muddy water, which is obviously correct in the results of departmental game and strategic judgment. The concept of page games is too advanced, the way of thinking is right, but it is a pity that it is not timely. "

A domestic investor who specializes in the entertainment industry told Zhu Simaji that with the imperfection of the infrastructure in the page game era and the continuous decline of word-of-mouth from C under the guidance of its flow gameplay, the page game era was fleeting, and the bubble burst because of the rise of mobile games in just a few years. At the same time, SP-born page game developers have also been labeled as the "Putian system" of the Chinese gaming industry-people who habitually switch from SP to page games, from page games to mobile games, and then from mobile games to block chains, eventually becoming speculators who tarnish the reputation of the gaming industry, gradually with eye-catching labels on their faces.

On the same timeline, the emergence of Wechat in 2011 allowed Tencent to snatch almost the only ticket in the mobile Internet era from Mi Xiao, and this terminal revolution that touched the foundation of the enterprise made Tencent feel nervous all over the company, including the IEG-- era. QQ users were the foundation of Tencent's PC game era and the basis for defeating the enemy, but in the new era of mobile games. At least before Wechat blossomed, Tencent Games had to start from scratch. It was at this point that Liu Chiping's former Goldman Sachs colleague, James Mitchell, who is good at strategic planning and strategic investment, joined Tencent in August of that year, replacing Liu Chiping as the new CSO.

Before James Mitchell became CSO, Liu Chiping served as Chief Strategy Officer for 6 years.

By the first half of 2011-2013, the game rankings of Apple and Android App Store came almost entirely from a series of competitors, including small domestic and overseas manufacturers: "fishing expert", "I am MT", "Temple Run" and the success of the "three Swords" series released by Langang at that time greatly stimulated those competitors who were defeated by Tencent in the era of PC games.

So in this seemingly turbulent situation at the end of the dynasty, even Shanda, which was in decline and operated as an investment bank, represented high-quality works such as King Arthur from Japan. Ren Yuxin, who has been promoted to COO at this time, is facing unprecedented trouble: for the first time, IEG's opponents in the game industry present a crisis that comes from both foreign and domestic fronts.

But the bigger crisis comes from internal divisions.

With the release of Wechat version 5.0 in August 2013, a Mini Game called masturbation has become so popular that even users who don't play games are obsessed with it. the number of its users did not break the previous record for jerking off until four years later after Wechat Mini Game launched "Jump". But just as Wechat announced masturbation, Tencent IEG also quietly released their first real mobile game, "Thunder Fighter," which is also a masturbation game.

Similar to "jerking off", "Jump" comes from Wechat's own end-market test of the game business.

But it's not a coincidence.

"Allen (Zhang Xiaolong) actually does not like and despises the market, including a series of commercialization-oriented games produced by IEG. Just like he does Mini Program, the purpose of doing Mini Game is to connect all services, to connect offline, Wechat is not to direct traffic to the IEG department to create wealth. Jerking off and jumping are both a warning to IEG, which means:

Don't bring your style to Wechat. Wechat has its own principles and values. If you are not good at the game, let's show you a simple Demo.

Of course, when you see Mini Game today, in fact, WXG is very cautious and stringent in its development and rule-making, and there is even a certain degree of suppression. (on January 10, 2019, Guangzhou Wechat Open course, the person in charge of Wechat Mini Game said in an interview with Zhu Simaji that he would continue to crack down on related applications containing suspected second-level sub-games of Box mode.) because I believe Pony has done a lot of coordination work to ease the contradiction between the two departments, after all, everyone knows that WXG channel + IEG development is the best way to maximize Tencent's interests. But it is impossible for Pony to interfere with Allen's ideas in a command way. "

Zhang Xiaolong himself is a CS player. He added sound effects similar to QIANGXIE to the Wechat shake function, which is a tribute to CS games.

A friend close to the top of WXG told Zhu Si Code that, in a sense, the simultaneous launch of WXG's jerking off and IEG's Thunder fighters, and even the popularity of the jump-is actually the product of conflicts over traffic, values and commercialization between the two most powerful departments in Tencent's current organizational structure.

Fortunately, however, the data performance of the above two masturbation games is excellent. WXG is not only tested in WeChat and app and verified the unprecedented huge spatial imagination and potential of the mobile game market, but also marks the official return of IEG in the era of mobile games. IEG then opened fire on all fronts and launched the "Tiantian" series of games at the same time, it also continued to make up the old IP of the PC game era after the innovation of mobile games. This measure obviously had some effect in a short period of time. Tencent mobile games group entered the list of TOP for the first time in history, and Ren Yuxin's attack obviously achieved the desired results.

But surprisingly, Shanghai Lilith, founded by Wang Xinwen, who left to start a business from Tencent IEG, and several colleagues of his Aurora Studios group, made a top-ranking masterpiece, the Legend of the knife Tower, which was the first to hit his former employer in the head in 2014, which was once very embarrassing.

What makes IEG feel even more embarrassed is that the "Battle of Freedom" produced by Shanghai teasing House Company is so similar to the follow-up popular "Arena of Valor" that it even leads to "plagiarism" again, and the investor of this work is Sun Yuyang, a partner in Northern Lights Venture Capital who has been transformed into an investor.

As the earliest mobile game in China, "Battle of Freedom" and Yao Xiaoguang Tianmei's "Arena of Valor" have many similarities.

At this time, NetEase's transformation in mobile games has been completed, and a number of works launched within one year have helped him gain the dominant position in the era of mobile games. In April 2014, NetEase launched his first mobile game, Mini Journey to the West. A few months later, NetEase's first MOBA-like work, Journey to the West, began to dominate the list after its launch, with a monthly flow of over 100 million and 3 million daily active users. While dominating the list of "Journey to the West", NetEase launched the mobile version of "Fantasy Journey to the West" on March 27, 2015, followed by a 500-day treasure digging, and then launched the mobile games version of "World" and "A Chinese Odyssey 2".

Shortly after the launch of the mobile game version of "Dream Journey to the West", a strange scene occurred in the history of mobile games in China: Tencent adopted a joint strategy and unexpectedly operated the mobile game version of Shanda's masterpiece, the Legend of warm Blood, which was once a mortal enemy, and there was a four-month offensive and defense battle in "Dream Journey to the West". On the other hand, shooting game enthusiast Ma Huateng also spared no effort to advertise for his FPS mobile game "National assault". But in the end, the clinging state of competing with NetEase for the mobile game market is still not optimistic.

Today, we review the reasons why the attack of Tencent Mobile Game 1.0 was frustrated and fell behind for a time, actually from many aspects:

At this time, Wechat is on the rise, and although the advantages of the new channels are obvious, Tencent Games does not pay attention to the quality of the work itself. at this time, the problems presented by Tencent mobile games are numerous and complex. but at the user level: the brand of Tencent mobile games is no longer fresh, on the contrary, it is even somewhat negative, and the disadvantage of insufficient R & D capability of Tencent mobile games has been further exposed at this time.

In terms of theme types, the moderate and heavy game layout is not enough, especially in the match against NetEase.

Infrastructure limited by the general environment. The node of 3G to 4G, limited by infrastructure, is an important factor that Tencent cannot immediately launch a masterpiece: the installation package of popular mobile games in this era is basically around 100-200MB.

The separation of operators and various Android app stores continues. There are so many app stores that need to keep up-to-date synchronization, version consistency and other problems, but Tencent refused to cooperate with the third party in the melee and finally paid the price.

In the face of the danger of being left behind in mobile games, Liu Chiping, a global ranking TOP100 player in the Royal War, made another crucial shot. On June 21, 2016, Tencent acquired Supercell, the Finnish mobile game company that ranked first in global mobile game revenue at the time, for US $8.6 billion.

So, why Supercell?

Tencent's investment happens to be the most popular time for foreign mobile games in China, so strategic investment is tantamount to turning enemies into friends at the time when IEG has not yet completed the transformation of mobile games. In fact, after the end of the Supercell case, Tencent began to free up its hands to deal with NetEase, the most powerful player in China at this time.

Taking a stake can ensure the stability of the agency, and after taking control of Supercell, Tencent can immediately adopt the strategy of "controlling China with Yi": that is, using the agents of two overseas works, "Tribal conflict" and "Royal War", to delay the offensive of domestic competitors led by NetEase, while at the same time using its natural advantages such as distribution and market operation in the domestic market to expand the profitability of the game.

Be able to buy more time to create conditions for your team. The merger and acquisition took place during the 2015 public test of horse racing and testing between the National Super God and Arena of Valor, and the development and testing of two PUBG works in 2017. This kind of lagging opponent's ZHANSHU was staged again in the chicken battle a year later.

Left-Martin Liu Chiping Zhong-Supercell founder Ilkka

After the end of the Supercell merger and acquisition, Liu Chiping once described the incident in this way in a foreign interview:

Ilkka (CEO) and I first met in March 2016, while Tencent first contacted Supercell in 2011-2012, when they launched Tribal conflict, when we only invested 20% of offer and wanted them to become partners with Tencent, but at that time the majority shareholders of supercell said they wanted to sell most of their hands.

This makes us hesitate. What are they doing? So I didn't agree with this idea at that time. Today, I personally made a mistake of $3 billion, that is, I failed the merger before I met him (Ilkka). Because then they launched the royal war (valuation skyrocketed). "

Today, however, Supercell is no longer the powerful global hegemony of a few years ago, with the rise of Tencent's own games and other agency works. The Apple App Store ranking of Supercell's new mobile game "the Wild fight" is also not as good as before, the core reason is that "the Wild fight" took a year and five months of continuous improvement and finally led to its current temporary lag, but it is still unknown whether the reason for the difficult birth of this work is the will of Tencent's management or the decision of the Finnish team.

In previous interviews, China Liu Chiping also admitted that they chose mergers and acquisitions almost when the company's market capitalization was at its highest in history, but looking back today, the question of whether Tencent's sky-high price merger, which was finally completed by Tencent including third-party consortia and seeking bank loans, is worth pondering: today, we know that in the era of mobile games 2.0, it is not the Finns who really turn things around for Tencent. But their own Timi Studio group.

It is worth noting that in the course of the Supercell case, a giant of Shi Yuzhu, an old rival of Tencent, also participated in the bidding. According to an industry colleague close to the giant, the capital source of the consortium behind the giant bidding pointed to Alibaba.

In fact, a number of games developed by Supercell were also widely popular among Alibaba's employees between 2013 and 2015, when the company's largest shareholder happened to be Softbank Corp., who was also Alibaba's largest shareholder. Therefore, in this complex relationship, we can not rule out the existence of giants, Ali, Softbank Corp. set up, at that time contributed to a Dutch auction, and finally forced Tencent to buy Supercell at sky-high prices.

In the Spring Festival Gala sketch "Kung Fu", the auction model in which Zhao Benshan coaxed Fan Wei into a sudden deal uses the relevant concept of Dutch auction.

Almost at the same time when the Supercell merger took place, a year ago, the joint venture of Tencent's agent "Legend" staged an "upgraded version": in April of that year, at Tencent Games's annual UP+ conference, among the 13 new mobile games released by Tencent that day, Changyou all stood in the Tencent camp among the five major rivals-- Xishanju, Shanda, perfect, and Giant-- who had played against Tencent in the era of PC games. Their mobile games are distributed by Tencent agents.

Compared with using capital operation to build an indestructible alliance, the "six factions besieging Guangding" incident was actually the last resort of the five major mobile game developers in the flow dilemma at that time.

Traffic has become the second super weapon of Tencent in the new era.

So, where does the traffic come from?

Since 2015, the traffic dividend in China's mobile Internet era has come to an end, and the plot of contention among a hundred schools of thought in the era of mobile games has taken a sharp turn for the worse: users and traffic have changed from quantitative to qualitative, and Wechat has become the first channel in the era of mobile games. The channel distribution advantage of Tencent games is no longer limited to a single channel. At this time, the product, partner and capital layout of its multiple business lines began to meet with the business line of the mobile game track:

Wechat released a landmark Mini Program on January 9, 2017-the aim is to further tighten the flow of mobile traffic to Wechat, thereby further compressing the living space of non-Tencent APP.

King Card, which is a cooperation between Tencent and China Unicom, was launched on July 12, 2017. due to the free traffic and fee advantage of Tencent APP and games of King Card, users are forced to choose Tencent products from a tariff point of view, and the emergence of King Card further reduces the living space of non-Tencent APP and games.

Since 2015, Tencent has monopolized the capital layout of e-sports 's live track until it finally monopolized the platform that represents the trend of future announcement.

Since then, the independent CP in the industry has relied on private traffic and a strong customer base, and with the support of investors, it can still achieve a well-off life with the help of works such as Minority Quadratic, so large-scale CP must either be an ally of Tencent or become an opponent like NetEase.

Based on this situation, even if these former mortal enemies have great reluctance in their hearts, they have to choose to cooperate with Tencent rationally rather than compete with it in the face of traffic and distribution costs. At the same time, Liu Chiping stepped in again, offering an "icing on the cake" betrothal gift for political marriage-Xishanju and Shanda both won strategic investment from Tencent in 2017. the transformation from enemy-partner-ally was completed in just 12 months.

The King of Terror has completed both overseas and domestic counterattacks with flow and capital weapons.

However, the effect that can be achieved by relying solely on traffic and capital is still limited. If you want to really turn the situation around, you still need to rely on the R line, such as Wechat, Tencent Games-- from Tencent Chengdu, thousands of kilometers away from Shenzhen headquarters. In 2011, a team here made another version of "Wechat" (the team later made the "Wechat phone book" APP). It is a great pity that team Zhang Xiaolong in Guangzhou finally missed the horse race that was destined to go down in history one month late. Four years later, the game team in Chengdu did not let go when faced with the opportunity. Sun Yuyang, who was also born on the R line, the super gift sent before leaving was officially signed by IEG at this time.

Yao Xiaoguang is currently vice president of Tencent and president of Timi Studio Qun.

Yao Xiaoguang's Timi Studio group, Chengdu Wolong Studios, from its birth to 2015, has only produced works such as "QQ three Kingdoms", "QQ Deity" and "Pet Ranch". The last best-selling work can be traced back to as far away as 2008. L1Studio is facing the dilemma of being laid off after their PC game MOBA, "the three Kingdoms," was shut down in 2014.

So, just at this time, the photon studio group within IEG is participating in the research and development of the first MOBA mobile game, and it just so happens that their studio did have the development experience of MOBA PC games before and at that time came to the critical point of life and death, and just at this time IEG also needed a white knight like Zhang Xiaolong to turn the tide.

So based on a series of factors such as adversity, accident, genius, luck and so on, Tianfu Chengdu staged the most famous inspirational story in China's game industry-Chengdu team's "Arena of Valor" made astonishingly major changes after its previous defeat. finally beat the first online and powerful photon studio group work "National Super God".

With an all-time high of more than 130 million DAU, which is rated as the most popular game in the world by IGN, it also won the first decisive victory in the era of Tencent mobile games, and became the last of the three decisive victories of IEG.

"Poverty limits my imagination."

From an old rival, a friend of NetEase game confessed to Zhu Si Ma Ji that even when they faced Arena of Valor internally, they had to admit that Tencent had done a great job.

Looking back seven years ago, the simplified version of DOTA "LOL" established Tencent's decisive victory in China's game industry, but the intellectual property ownership of this game is still controversial on the other side of the ocean, but fortunately, Blizzard and Valve have more Western chivalry, and there are no real lawsuits and disputes because of conflicts of interest.

But seven years later, when Arena of Valor encountered a similar problem, Tencent did not choose to put aside the dispute like his overseas colleagues, but impolitely picked up the law to defend its power, just like Shanda did:

Shanghai Mu pupil Technology fought with Tencent and its wholly-owned subsidiary American fist over the intellectual property issues of "endless showdown" with "Arena of Valor" and "League of Legends" and the competition of Tencent's former employees. Xu Zhenhua, founder of Mudi Technology, was eventually sentenced to lose the case and paid 19.4 million yuan in compensation.

The bigger reason behind the lawsuit between "endless showdown" and "Arena of Valor" comes from the adverse influence of the former on Tencent Games's going out to sea.

"the cause of the whole thing is that the pupil is too big and too much. The core market they hit is Southeast Asia, especially Indonesia (the fourth most populous country in the world with a population of 200 million) has become a national game. Arena of Valor's overseas distribution was handed over to Garena. They were originally agents of League of Legends, but Tencent did not give them all the overseas rights, so what happened was that "endless showdown" could be popular all over the world, while "Arena of Valor" was only locally. This is an asymmetrical mode, and the pupil has much more advantages than Garena.

There is no doubt that it is impossible for Tencent to beat the pupil, but if they also adopt this model, it will disrupt the strategic layout of Arena of Valor's overseas and domestic game market, which is unacceptable to senior executives. Of course, another reason is that the pupil's "learning" of Arena of Valor, at least I think it has exceeded the bottom line for reference. "

An investor close to the pupil technology told Zhu Simaji that the adverse impact behind the lawsuit is not just about overseas reputation and market share, but also about Tencent and former employees of Tencent IEG. Once it leaves to start a business and chooses to join the game track, it is bound to happen in the possibility of competition and contradiction in its old club-because Tencent is the largest company in the gaming industry in the world. and this lawsuit sets a very bad precedent for Penguin's "old penguin" venture.

Thirteen years ago, Tencent and Shanda went to court over plagiarism disputes between "QQ Tang" and "bubble hall". Thirteen years later, the plaintiff became Tencent. Leaving aside the final outcome of the lawsuit itself, the idea of "League of Legends", "Arena of Valor" or "endless duel" actually comes from the player across the ocean who made the DOTA map but is willing to give up the patent fee like Tesla, the inventor of AC power, and what the law is willing to protect is only the expression of the creator's ideas.

But if the gap between pupil and Tencent and Shanda is just a case to win or lose, it can only be regarded as an insult to Tencent, to China's game industry, and even to the world's game industry. The game itself is a fun work of art, and Tencent Interactive Entertainment is also very fine and cherished for the construction of its moat, but today, if we interfere with works of art from the perspective of pure commercial interests, the result can only be to completely separate the sensibility of art itself and become a cruel and merciless tool for making money, evil is obviously inevitable.

"who says demons have to look scary? "the lines happen to come from the mouth of Vega, the demon wizard in League of Legends, which is owned by Tencent.

The left holds capital and flow symbolizes power, while the right holds terror as a shield to symbolize rule. At a time when Tencent Interactive Entertainment unveiled its weapons and shields in the new era, trying to harvest and rule the next era, unexpectedly, the rain was coming and the disaster fell.

03. Heaven falls and kills.

From 2008 to 2018, the King of Games seems to have solved a worldwide problem: in the past, the traditional game industry could only rely on market feedback to judge the level of the work itself, but in the hands of Tencent, it adopted and relied on a set of sophisticated analysis and models to evaluate the game, an art form with the perceptual color of the creator, with the most rational numbers, and finally got an accurate evaluation of the quality of the work. With regard to the issuance and investment model, Dawei has described it as follows:

After winning the agency rights of CF and DNF in South Korea, when we used these two as samples to tell the famous game developers, I no longer told them too much about how promising or more philosophical issues QQ is, but to tell them that we made a lot of money. We did build a model that can predict the future market size of the game and predict its market performance.

How should we negotiate the agency distribution, what the agency model is, how to draw up the benefit distribution contract, and then we will repeat it again and again. Once we notice that there are profitable games around the world, we will invest in it and get the agency distribution rights, which is like a pipeline.

There are a lot of Internet users in China, which means that there is a great demand for games. Generally speaking, if a game has 50 million users, 100 million players may come to an end, but we have not encountered the situation of market saturation so far. So it's a very good business. "

With the journey from No. 1 in China to No. 1 in the world over the past 10 years, people and their peers seem to believe that Tencent's complex watch-gear algorithm is by far the best solution in the industry. As one of the most critical gears, the final result of the live broadcast war not only completely put an end to all CP that cooperated or competed with Tencent, but also made the whole industry aware of the invincibility of this strategic investment model.

On March 30, 2019, Panda TV announced its closure 1286 days after its establishment, marking the final victory or defeat of the long-running live broadcast battle of e-sports: the last traffic position of the game industry fell from Tiger and Douyu, which announced at the same time in March 2018 that they had won strategic investment from Tencent. This not only directly accelerated the upstream CP to take further action to get closer to Tencent, but also unexpectedly gave Tencent Interactive Entertainment a "magic sword" that it did not have.

Back in 2012, seven years ago, the YY voice platform with e-sports and online game users as the core established the embryonic form of China's e-sports live broadcast platform-the predecessor of Tiger teeth. Prior to this, although SKY Li Xiaofeng, the first generation of Chinese e-sports players who won the WCG2005 Warcraft 3 championship, once let Chinese players see the authorities' hope for e-sports 's industrial opening and development on CCTV5, it was later proved that this was only a flashback in the process of discussing the "electronic HAILUOYIN" argument. E-sports 's live TV signal was cut off again after winning the SKY championship.

It is worth noting that after 2000, American colleagues applied their development experience of competitive sports industry directly to e-sports industry, which made the professionalization of American e-sports industry astonishing: a large number of basketball, baseball, football, film and television stars, and large sports TV stations have become the owners or investors of electric sports teams.

While China's neighbor, South Korea, was hit by the Asian financial crisis, the Kim Dae-jung government concentrated the efforts of the whole country to develop the entertainment industry and e-sports, which made Korean stars hit the world, but also pulled South Korean e-sports players onto TV, because this background made South Korean chaebol Samsung become the sponsor of SKT and Samsung team.

At that time, online video platforms such as PPTV,PPS, driven by Chinese P2P technology, became the earliest entrance to see live streaming of e-sports in China during the transition period. With the rise of digital TV on demand platform and Youku Tudou, Taobao led China into the era of e-commerce retail at the same time. E-sports 's fan flow customer base + Taobao online store directly jumped to deal-online celebrity snacks such as "meat muffins" have become the only way to feed the second generation of Chinese e-sports players.

With the rise of DOTA, Tiger teeth, which grabbed the first place, led to the establishment of China's first live streaming platforms, and a large number of e-sports websites began to turn to live streaming, including Douyu TV, which was founded in 2013 based on A station users. It wasn't until a year later that Twitch, the largest live streaming platform in the United States, was acquired by Amazon for a whopping $1 billion, subverting China's capital market's imagination of the track in the past, resulting in a scramble between management and a large number of e-sports live streaming companies after 2014, igniting a live war between dozens of companies fighting each other.

From the perspective of the game industry, what influence does e-sports Live have on games?

When most C-end users do not know how to play games, the entry threshold for watching game events is much easier, and the impact of this model will cause the influence of the industry to soar in the form of several multiples.

It has completely changed the publicity mode of traditional games, and the live broadcast platform has destroyed the game portal platform that once mastered the core traffic and customer base, while the impact of video live streaming on the dimension of pure text + picture + video is irresistible.

It greatly simplifies the link of the whole industry. In addition to the game itself, only the live broadcast platform is directly TO C. due to the gathering of a large number of vertical players, the live broadcast platform has become a pan-entertainment star-building platform beyond the game itself. The traffic of e-sports events in the foreseeable future can be compared with live TV basketball, football and other competitive sports events, and its commercial value is unlimited.

Back to the question, where did Tencent's magic sword come from?

Back in 2013, Huya, then a live broadcast on YY, adopted a strategy of implanting Fantasy West tourist accounts under NetEase in order to better capture game images, which caused a strong backlash from NetEase.

For NetEase, who takes the product as the core asset, YY's practice is no different from the previous 3Q war caused by the QQ client, and what annoys NetEase even more is that at that time, YY also imported users who watched the Dream Journey to a page very close to the Dream Journey to realize the diversion. So the person in charge of CC Live, NetEase's live broadcast platform, opened fire on YY on the grounds that individual users' Fantasy West tourist client program crashed during the live broadcast, and filed a lawsuit with the court.

However, the question of whether the player's game screen was part of the copyright of the game company seemed to be an area that had never been discussed at the time, so the progress of the lawsuit was delayed again and again, and the closure of the case was a long way off.

Until Q3 in 2017, it was at the key point of a scuffle among NetEase, Xishanju and Tencent over the competition for the market of chicken-eating mobile games, when the lawsuit that began four years ago suddenly came to an end: the court held that the game screen belonged to the copyright of the game company, and YY lost the lawsuit. NetEase inadvertently opened a new field about the copyright of game companies-the right to use live broadcasts.

But by that time, the pattern of the domestic game industry had changed from the contention of a hundred schools of thought in the initial stage of changing hands of PC games in 2013 to the fact that Tencent games accounted for 70% of e-sports 's live streaming, and NetEase games accounted for 10% of the game and 7:1:2 of more than 20% of the game. Coincidentally, at the same time before the verdict was issued, Tencent strategically bought a stake in South Korea's PUBG producer Blue Cave, and the mobile game PUBG, which was jointly developed with it, is under development. In the foreseeable future, Tencent's market share could reach more than 90% of e-sports 's live content.

There is no doubt that the right to use live broadcasts can be used as a deterrent.

"on the most tense night, Mark (Ren Yuxin) called Shaojie (Chen Shaojie) and told him clearly what the situation was like. He didn't say much on the phone, so he asked Shaojie what to do next. As a result, the next day, all NetEase games on Douyu disappeared. "

A friend close to Douyu and a senior member of Tencent's IEG told Zhu Simaji that before Tencent's third structural adjustment in 2018, the projects of its investment and acquisition department could indeed be completed without the approval of the relevant business units, with the exception of the game track. Therefore, IEG has a "IEG Investment Department" reporting with the investment and merger department, and the direct head of this department is Steven Ma Xiaoyi, who is in charge of overseas issuance business.

Therefore, the first investment in Douyu actually comes from the early investment which is partial to the financial investment attribute of the investment and merger department, but Huya's first investment comes from the strategic investment led by Steven in IEG. Assuming Chen Shaohui's anti-Japanese will at that time, the result must be that Douyu was mercilessly abandoned and the Huya family became dominant from then on. On the other hand, Li Xueling, founder of Tiger teeth, said in an interview with GGV Capital GGV's 996 program after it went public in 2018:

"if we don't cooperate with Tencent, we have to compete with him. We can only get the market share of live games, but we don't have time to develop games. I think the final situation will be Douyu and Tiger teeth together. "

Li Xueling inadvertently told the truth that he should not have told.

In fact, in the Q4 quarter of 2017, Tencent held 2530% of Douyu and Huya respectively through a new round of investment, while a friend close to Douyu and Huya told Zhu Si Maji, there is also a tripartite pocket agreement behind this round of investment, that is, within a period of 2-3 years after the completion of the investment, Tencent has the right to merge another platform through the platform with the final market share. This thoroughly clarifies the reason why Douyu still insists on preparing for IPO to raise food and grass and go to war with Tiger teeth under the stable situation that is already divided into two parts of the world.

Excalibur can also be used as a deterrent. A series of non-Tencent live streaming platforms that have disappeared today are the souls under the sword.

When the capital market learned that Tencent had absolute control of 80% of the live content in the market, the result was that the management began to exit in large numbers, resulting in the rapid death of the live broadcast platform due to lack of food. TV, a panda invested by Wang Sicong, was also one of the victims. It is also worth noting that this Excalibur was successfully used in headline products such as JUJI Douyin and volcano videos from 2018 to 2019. In the aspect of byte jump, the strategic intention of trying to get into the game track by gathering players with a high degree of coincidence with the core age of its product matrix was detected by Tencent in advance, and today it can only find another way out.

When the upstream and downstream ends of the industrial chain were invincible, Tencent Interactive Entertainment, which had been armed to the teeth, felt invincible until the successive accidents of "monster LIEREN: world" and "PUBG" made the game king return to the right time of the stock market crash.

On August 13, 2018, the removal of "Monster LIEREN: the World" became the origin of Tencent Games's continuous disaster.

A core value of the Steam platform from the United States today, which is also its threat to Tencent, is that as a distribution channel for CP, its cost is much lower than other traditional channels, and the rules are fairer. As we all know, the current cost of channel distribution in the game industry accounts for about 30% of the total cost of a new work, which is very different from that of 10 years ago. The core logic is that the earlier the game is released, the lower the release cost. This is also a core factor in why the right to launch has led to such fierce competition among so many platforms. Behind the final removal of "Monster LIEREN: the World" is a tragedy caused by Tencent's bid for Steam's WEGAME platform in the process of vying for the right to launch.

A friend close to Tencent's IEG channel told Zhu Si Code:

Before "Monster LIEREN: the World" was taken off the shelves, the relevant departments had already sent approval to Tencent, and also gave Tencent clear rectification and revision opinions, such as the bloody picture rectification opinions, etc., but for a 3A-level work, such a revision would take some time, but the channel release of IEG hopes to achieve the expected effect of simultaneous launch of the WEGAME platform and the Steam platform so as to achieve the global simultaneous release. So a version that could not be completely modified in the departmental game was put on the shelves on the first day, and on that day, the examiners of the relevant departments also went online to check and found the problem, and from the problem found to be removed from the shelves, IEG still had 4 days to turn around the situation, but they did nothing until the focus of attention became 'NetEase reported Tencent'. "

WEGAME platform and Steven Ma Xiaoyi have spent a lot of time, capital and energy in order to enter China for this work. Apart from the fact that Tencent Games's commercialization is only aimed at the introduction of content, Tencent's great efforts are obviously worthy of everyone's recognition. But for C-end players and the market, the end result-the game did not come in, the early investment came to naught, and Tencent is still responsible for all the consequences, because this is the pain that a king must endure.

However, the market share of PC games in 2018 is no longer what it was 10 years ago, and mobile games are obviously the top priority of Tencent Games's income in the mobile Internet era. If the core issue of the "Monster LIEREN: the World" case is only the "gray rhino incident" caused by Tencent Interactive Entertainment by ignoring regulatory policies and paying too much attention to limitation and channel release costs, then the "PUBG" case, as the core mobile game track, is a metal fatigue accident caused by investment + issuance mode for a long time.

Tracing back to Battle Royale Games's PLAYERUNKNOWN'S BATTLEGROUNDS model, it originated from the horror film PLAYERUNKNOWN'S BATTLEGROUNDS directed by Japanese director Shen Zuo Xin II in 2000, which tells the story of several classes of students in the third year of junior high school being sent to a desert island to kill each other for three days. In the film, students have to kill their classmates and seize each other's weapons and food in order to survive. If they refuse, they will detonate their own explosive collar, and these plots eventually become the key to make people feel nervous and exciting in the Korean game "PUBG", such as solo ranked, licking bags, running drugs and so on.

In the history of Chinese online games, there have also been two classic works: the grand Legend and the Giant's Journey which can acquire each other's equipment by killing players to a certain extent contributed to the success of these two works. But the reason why legends and adventures are still not great works is that the virtual society built in these two games is worse than the real world, and the two games directly lead to real bloodshed between players in the real world. Shanda and the journey are to blame.

If you look at it purely from a moral point of view, Tencent Interactive Entertainment, which believes in "creating happiness from the heart", has never acted as an agent or independently developed any games with a similar tendency to "do evil" in the past 17 years, but "PUBG" has become the first exception in 17 years.

Why choose PUBG?

Looking at the entire Chinese mobile game market only from the perspective of game types, FPS shooting games, which occupied more than 20% of the market share in the era of PC games before Battle Royale Mobile Games's launch in 2017, has become one of the few big cakes that have not been fully developed, while the unexpected popularity of "PLAYERUNKNOWN'S BATTLEGROUNDS" mode in PC games has given mobile games a new guide. So after Arena of Valor completely dominated the MOBA works, the works around "chicken eating mode" led to another round of competition between NetEase and Tencent on the type of FPS-- NetEase's self-research team immediately developed and adopted the "Wild Action" with FPS works on Messiah engine released in 2016, while Tencent developed the orthodox hand-held game "PUBG" of Blue Hole Studio PC through agents and cooperation with South Korea. In the form of cooperation, Blue Hole is responsible for the full system of art and PC games, while Tencent is responsible for the technical support and experience optimization of mobile games + the agent distribution and operation of mobile games.

However, a problem overlooked by IEG is that it is different from the surprise caused by the direct release of "League of Legends" in China after taking a stake in the fist studio in 2008. "PUBG", which Blue Hole cooperates with Tencent, is a new and unknown version of mobile games (Blue Hole has never released a portable version of "PUBG" before). Due to many immature and uncertain factors in the detail experience and actual operation, Tencent finally forced Tencent to use the horse racing system again-Timi vs Photon. The two versions of launching a full-force attack and stimulating the battlefield not only accelerate detail optimization and user experience by expanding market feedback, but also deal a saturation blow to other competitors in the PLAYERUNKNOWN'S BATTLEGROUNDS series. But it is precisely for the above reasons that PUBG faces the same experience of "Monster LEIREN: the World": it takes time to transplant and optimize the mobile games of agency works, but there is obviously no channel distribution, market or even competition for IEG, and it is impossible to leave too much time for the two works.

So the scene that worried IEG most happened on October 28, 2017-NetEase's chicken eating work "Operation in the Wild" went online ahead of "PUBG", while "Xiaomi Gun Fight", which also came up with the concept of chicken eating from Xishanju, was launched earlier on April 6. IEG's two works were launched on February 9, 2018, a full 104 days later than NetEase alone.

The question of whether it is important to get a head start on the launch of products can be reflected in the previous battle for another core track of Tencent:

Because the products of Wechat Zhang Xiaolong team were obviously later than those of Mi chat team, which was affiliated with Hong Feng and KK Huang Jiangji, and there was a 42-day time difference between them, Tencent finally led to a six-month tug-of-war between Tencent and Xiaomi in 2011, in which Tencent even directly transfusion Wechat products by selling out the interests of QQ's SNG business group, which was the core asset at that time. Gradually completed the whole process of catching up, catching up and surpassing Mi Liao, but these six months have also become a thrilling and unprecedented panic that Tencent has never had since it was founded in 1998. Today, there are still people who are good at assuming that Xiaomi was stronger at that time, and Zhang Xiaolong's team made more mistakes. If China Mobile takes advantage of the opportunity to make a comprehensive hindrance, even if QQ is not involved in the competition between Wechat and Mi Xiao. Would things have been different?

There is no doubt that the 104-day time difference between the two Battle Royale Games has left sufficient time for NetEase to polish the products and completely occupy the market before the launch of the PUBG. In the face of old rivals, IEG can not use capital, flow weapons, in the face of the crisis that PUBG has almost lost before it is online, the "King of Terror" set off a full-scale attack to slow the progress of the "wilderness operation" market, thus winning time for PUBG.

"Xishanju launched a suicide attack! "

At that time, the relevant departments held an industry-wide discussion on the "PLAYERUNKNOWN'S BATTLEGROUNDS" type of mobile games, and one of the industry insiders who participated in the above meeting revealed to Zhu Sima Ji that as the developer of the first Battle Royale Mobile Games in China, at the meeting, Xishanju took the initiative to put forward some policy risks about chicken-eating mobile games, and was willing to temporarily take off the shelves to rectify related works together with the whole industry. This almost suicidal proposal was quickly supported by a number of manufacturers, including Tencent ("CF mobile games", "Glorious Mission" also contains PLAYERUNKNOWN'S BATTLEGROUNDS's way of playing). Although Tencent did not initiate the incident, Xishanju accepted a strategic investment of US $143 million from Tencent on April 21, 2017, and there is no doubt that Shanda has become a strategic partner of Tencent.

So what is the background of the so-called "suicide attack" mentioned above?

"at that time, we went to the meeting with Steven Ma (Ma Xiaoyi). The person on NetEase's side was Ethan Wang (Wang Yi, NetEase vice president of games). At that time, Wilderness Operation did not have a version number, but we did have it. After their launch, we estimated that the advertising investment budget was more than 10 million yuan every day, while our early budget was only a few million. Xiaomi Gun Fight's users were OK in the last few months. But later, he was really no match for NetEase. A friend from Jinshan admitted to Zhu Sima Ji that he could not tell us more details about the meeting, but he admitted that the atmosphere at that time "really wanted to join hands with Tencent to deal with NetEase."

No matter what the situation is, the end result is that Xiaomi Gun Fight, who has been online for half a year, was removed from the shelves at the same time as his opponent shortly after the launch of Operation Wilderness. The strategic encirclement of Tencent's capital weapons in the domestic market has once again played a decisive role, winning valuable time for PUBG.

On the other front, IEG's channel advantage drove "Operation Wild" to a dead end and finally drove it out of the Chinese market. A friend from NetEase Mutual Entertainment described the situation to Zhu Sima Ji:

"their blocking revolves around two aspects. The first aspect is that the evaluation of "Operation Wild" on all mainstream e-sports live streaming platforms in China was dealt with as soon as possible, and the name of the special area was changed to "Battle Royale Mobile Games". After Tencent's "PUBG" was launched, these zones were renamed "PUBG" and opened a separate zone for Wild Action to show fairness.

At the same time, some game anchors have reported to us that once the popularity of the studio of "Operation Wilderness" exceeds 100000, it will trigger the black screen mechanism. The second aspect is that Tencent purchased all the advertising space that can be bought, which once left us with no advertising to buy, while in the QQ group chat, there was a situation in which CF ads popped up after the keywords of Wild Action were briefly typed in the chat.

Of course, their blocking is only an external problem, and we have to bear a lot of responsibility internally during these 104 days. In the face of such a giant opponent, our inability to mobilize company-wide resources to fight is an important reason for losing the market. in addition, in terms of online promotion activities and mobile game details experience, inadequate map update and detail processing is also one of the core factors. "

With the launch of stimulating battlefields and military raids, as well as the unexpected popularity of "Operation Wild" in the Japanese market, the chicken-eating war between Tencent and NetEase has come to an end. Although Tencent quickly won the absolute leadership position of more than 96% of domestic FPS mobile games, natural disasters are inevitable.

There is no doubt that the core reason for the failure of the PUBG version to be approved is that, in addition to the internal causes of some "evil" tendencies in the game itself, the abrupt change in the international situation (-.) is the indisputable internal cause. In recent years, the above problems have become "black swans" that many enterprises can neither predict nor resist, and this is not the first time, even Tencent, Alibaba and NetEase are no exception:

In 2006, Fantasy Journey to the West, developed by NetEase, encountered collective protests from players online and triggered a series of conflicts around the relationship between NetEase and players because of the escalation of a territorial dispute between China and Japan over the DIAOYUDAO territorial dispute when a pattern that looked like the rising sun flag of Japan flashed in a building in the game.

In 2014, the Argentine National Pavilion on Alibaba's AliExpress platform was suddenly subject to restrictive regulations on cross-border e-commerce with "strong trade protectionism" adopted by the Argentine government, which almost stopped the Argentine National Pavilion. In the same year, the ruble crisis broke out in the civil war in Ukraine, and ISIS spread throughout the Middle East, which also caused the international exchange rates of the Russia Pavilion and the Middle East Pavilion to change abruptly due to the war, while AliExpress suffered a double blow to orders and turnover when it adopted the settlement method of US dollars instead of local currencies.

In 2013, the German hairy crab group purchase case launched by Ali Jushu was forced off the shelves because it did not submit an import and export application to the AQSIQ and the German authorities, as well as the corresponding large-scale quarantine inspection report. as a result, Ali compensated users in full 9 million yuan for the goods, while compensating users for up to 3 million yuan in additional compensation.

At present, the continuous loss-making operation of the two PUBG models on the mobile phone without a version number (can only retain advertising and other revenue), coupled with the permanent removal of the previous PC game work "Monster LIEREN: the World", has dealt a heavy blow to two works with huge early investment and excellent commercial prospects. With the sudden decline in game revenue in a short period of time, and the unpredictable decline of Chinese stocks around the world in 2018, the stock market crash has become an inevitable reality.

When the Chinese game industry from the era of heroes emerged in large numbers, to today, Tencent as a super, NetEase, perfect and other strong composition of the pattern. The intensity of market competition is not as intense as it used to be, but the upstream and downstream ecosystems have experienced an unprecedented impact because of the deformity of the market.

Do not suffer from scarcity but inequality; do not suffer from poverty and unease. Ji will fight for a moment.

Back three years or even earlier, China was a trumpet-shaped industry with thousands of CP but relatively limited channels, which meant that the number of games that could be accommodated at the same time in the same category was very limited, just like movies in one branch of the entertainment industry-- dozens or hundreds of films were released, but only a dozen or so were released. And the volume at the bottom is more limited as the authorities tighten restrictions on version numbers.

At that time, the average size of these CP was 30 to 50 people, and their core model was independent research and development, and then found a set of research and transportation separation mode of channel distributors. However, with the existence of integrated research and transportation platforms such as Tencent and NetEase, the result is:

In the state of separation of R & D and transportation, the channel takes 50%, the agent deducts 35% (advertising fees vary from 15% to 20%), and CP takes no more than 15%.

Under the condition of integration of research and transportation, more than 80% of the profits are owned by NetEase and Tencent.

Because profits are not enough to support independent R & D work for as much as a few years or as little as a year, a large number of CP have died, resulting in polarization today.

The first category of individual developers, break up the game and give it to an independent big CP like Coconut Island for distribution, and the developers then earn a small salary ranging from tens of thousands to hundreds of thousands, and the rest of the profits go to CP. Chinese parents, such as the popular Steam platform in 2018, were created by Coconut Island.

The second category is the systematic large CP. For example, Le element, whose profit exceeds 800 million yuan in 2018, chooses to cooperate with Tencent, or to supply with mobile phone manufacturers such as OPPO,VIVO and Xiaomi. The profits of this model range from tens of millions to hundreds of millions, with only a few dozen.

Unfortunately, it is born under the dome created by monopolists, but if you can win these hard-won profits, there is no way out, but the income of these big CP is still not stable.

Zhu Simaji, an investment direction from a well-known domestic CP, admitted frankly that the current "aurora project" created by Tencent for these CP is to open up its Wechat and QQ traffic like other Tencent businesses, and make some contributions to the industry with capacity and capital, but the game track is different from Tencent's presence in e-commerce, local life and travel services.

As an absolute monopoly-- this kind of opening is only for the sake of saving the overall R & D cost of IEG. After all, in the face of small and medium-sized markets such as SLG, Sanxiao, parkour, its self-research may not be better than Le element, Le Ku and other companies, so it is more efficient to give traffic resources to these special types of CP, become their agents and share most of the profits.

And on another front upstream, the game company represented by NetEase is also facing unprecedented changes under the dominant situation of Tencent.

"Today, even NetEase's R & D model has gone wrong because of the strength of Tencent. They have a 2-5-year R & D cycle, and then send the game up for two weeks to recover the cost, then earn money for another month and a half, and then quickly dry down by Tencent, and then disappear-both "Yi Shui Cold" and "Chu Liuxiang" are the same.

Is this still what a game should look like? Didn't he say he wanted to operate for a long time? For Boss Ding, maybe he doesn't care about this very much. after all, NetEase has been able to make money without being destroyed by Tencent for so many years. But what's the difference between NetEase and those big CP today? "

A well-known domestic investor pointed out that due to this abnormal trumpet-shaped market, new games continue to pursue the speed of update, making the creation began to be reduced to a harvest of the market, while the harvest pursues timeliness, efficiency and the lowest cost. He said bluntly that if the Chinese game track continues to be squeezed and controlled until there is no profit margin and hope, the result will be the withdrawal of creators who regard as the soul of the game-because small and medium-sized companies have almost collapsed today.

At present, due to the change of the nature of user media, Japan, a big cartoon country that has created numerous classic works, is facing this kind of dating in the comic industry, which also belongs to the cultural and entertainment industry. as a result, the representative Japanese cartoon IP is often written 20 years ago. When the decline of game creative talent occurs, the result is a decline in the overall production level of China's game industry, and large groups have to rely on large imports for profit reasons-everything goes back to 17 years ago.

Fortunately, there are still a group of people who really love games and really understand games in China today, and they are still quietly insisting on creating idealists in some corner of China. This is reminiscent of 19 years ago, when China's Internet industry took off, when COPY TO CHINA was popular. People's Daily made people cry in an article entitled "Free software swings impulses hungry". At that time, Zhang Xiaolong, senior vice president of Tencent headquarters, who made Foxmail, was written.

But ideals are not enough to eat, and if Zhang Xiaolong and Tencent are models of mutual achievement today, so should the relationship between idealistic game developers and giants.

Behind the distress of PUBG and LIEREN is that Tencent, the world's largest game company, faces a series of problems during its long-term high-speed operation.

If you put aside corporate social responsibility and moral judgment and look at Tencent Interactive Entertainment from a business and industry perspective, what problems do you face today?

The product model and horse racing system originally proposed by the game business to enhance its competitiveness seem to be equated with the naked distribution of benefits.

A former partner from Tencent IEG fiercely described to Zhu Si Code Ji the unhappiness of working with him:

"as their partners, we have the most say. No matter to our own people or partners, they evaluate their works in more than 20 dimensions, and the time is 2 to 3 months. Then through the performance of these 2 to 3 months, combined with this set of models, we can calculate how much profit your work can bring to them. If the result is that this work does not choose another to make money. So this game is going to drop and stop operation. I think this is a set of extremely barbaric practices-- if Tencent uses its own revenue maximization as the core indicator, then I would like to ask: the highest-paid game in the world, is the player's favorite, is the best user experience? 10W + must be good articles?

Tencent is a game company with no emotion or even soul. I admit that they work very hard to make high-quality content. I admit that they make a lot of money playing games, but their practice actually hurts the creators themselves. because there is no need for human nature in front of this model, their model can strangle works that do not make much money, and then devote more resources to works that make more money. "

As for the question of Tencent's horse racing system, a friend of Tencent's strategic partner, Coca-Cola, from China, the second largest energy drink brand in the United States, described their experiences to Zhu Si Code:

"in 2017, when we enter the Chinese market, we very much hope to cooperate with Tencent's new work PUBG, because there happens to be energy drinks as virtual materials, so we think this is a very good display. At that time, Tencent Timi Studio group became popular because of Arena of Valor's big sales, so we chose to reach tens of millions of levels of advertising cooperation with Timi based on this brand awareness. But PUBG adopted the horse-racing system, so we watched the "exciting Battlefield" of drinking 'competitor' drinks beat Timi. "

Obviously, a core point that distinguishes Tencent Interactive Entertainment from other game developers around the world is the global dominance of Tencent Interactive Entertainment, which makes it face heavy KPI pressure and finally have to ignore the personality expression as a creator or creator team, which also leads to pipelined production of works, but the actual level has not improved or even declined. Even after the birth of Arena of Valor, Tencent's self-developed games still did not find a particularly strong methodology.

There are usually two ways to define creative expression: ask the author what he wants to do and what he is going to do. But in Tencent's interactive entertainment, revenue maximization is obviously more important than the creator's expression, so we can often see news about the sudden suspension of a game in Tencent, as well as news such as the "Arena of Valor" team won the astronomical year-end prize, but its company and even the outside world seem to have deliberately ignored the two teams that quietly made the same excellent "national superstition" and "whole army assault". In horse racing, the real relationship between two groups of people is even the same company, colleagues in the same department, just because of horse racing and become sworn rivals-simply because the other side is not doing enough to make money.

The platform model of issuance and investment faces the ceiling with the overload of Tencent interactive entertainment scale, and the R & D capability has not been improved as a result of investment.

Inventory of the current world game industry ranking a total of three, revenue ranking point of view: Tencent, Sony, Apple, Microsoft, Blizzard, NetEase ranked 1 to 6. From the perspective of game developers' income, Blizzard, NetEase and EA are among the top three. Finally, from the R & D scale of the game company, NetEase, Ubisoft and Blizzard are among the top three.

According to the ranking of the above three dimensions, the conclusion of the comprehensive analysis is that behind Tencent's huge income, Tencent must constantly rely on investment to circle more CP, and then through the monopoly position of the market on the basis of obtaining the Chinese agency of these works, and finally take a series of measures, including Xuezang, to promote the works with the highest profits so as to win enough income.

This seems to mean that if Tencent does not have the determination to invest in larger-scale independent research and development in the future, it may need to invest all types of excellent CP in the world except its competitors in order to achieve the stability of long-term domination, and in the metabolism of content year after year, Tencent must keep investing in new CP to maintain its advantages, but the disadvantage of doing so is that the short-term profits will continue to expand with the scale of foreign investment. The rise and fall of content developers has led to diluted profits.

Looking at the dangerous situations faced by Tencent Interactive Entertainment in its 17-year history, except for QQ Game developed by Sun Yuyang's team in 2002 and Arena of Valor developed by Yao Xiaoguang's team in 2015, almost all of them rely on Liu Chiping's efforts to turn the tide through pitching. This is tantamount to returning to the question of "is Tencent an investment company or a business company" in 2018? It's an old problem.

Research and development capability is always the foundation of a game company.

The negative case in front of us is the six major online game companies in Shanghai that were crushed by Tencent's "four masterpieces" and "League of Legends" one by one-- they are a group of speculators who rely on agents, are keen to make fast money, and pursue capital operation in the later stage. finally, because they don't want to make progress, they sit back and eat nothing.

The overseas market is a brand new war with no certainty.

At present, the channel, operation, public relations and distribution advantages of Tencent IEG are limited to the Chinese market, while the channel advantages of overseas markets are first occupied by emerging platforms such as Steam, which poses a serious threat to Tencent Games's going out to sea. After all, their platform does not need to invest in content developers, nor to please or offend anyone, but to establish a perfect evaluation and recommendation system, and then it is up to users to choose their favorite games. The business model is just a normal 25% cut.

This model, similar to the music store and app store, is a nightmare in China that relies on traditional channel platforms and limited version numbers-unfortunately, Tencent is the one with the greatest interest in the Chinese market right now. It is precisely for the above reasons that indirectly spawned the expedition of Tencent Interactive Entertainment.

Fortunately, due to no restrictions on the version number of PUBG overseas mobile games, Tencent's operational data performed well, which finally yielded some results for IEG, but Tencent's strong enemies overseas, such as Lin, other tracks such as Wechat against facebook's WHATSAPP, as well as LINE, WeChat Pay went out to sea to face the same fierce Alipay, Apple Pay and so on.

Although we can see that Tencent also hopes to promote the influence of the WEGAME platform through simultaneous release in the "Monster LIEREN: the World" incident, because Steam adopts offshore mode, overseas masterpieces and independent works are more willing to choose Steam. On the mobile side, the Apple App Store also plays the role of an excellent overseas channel.

Tencent WEGAME will be limited to Tencent agent + self-research + game works owned by its domestic and foreign investment partners for a long time in the future. The richness of the quantity types of its works can only depend on the size and density of Tencent's investment scale.

Even if Tencent represents STEAM, its potential censorship and regulatory problems will be no small challenge. For Tencent, if it wants to maintain a stable rule in the domestic market, it has little choice but to block the expansion of Steam in China, or even to withdraw from the Chinese market by virtue of Tencent's strong local resource advantages or policy-oriented weapons after entering China. (for example, not long ago, the platform appeared "TAIDU" content games as an excuse for its attack.)

Must the advantage of platform outweigh the advantage of content? The answer is no.

The latest negative example in the industry is the Legend of Zelda: the breath of the Wild, launched by Nintendo in 2017, whose outstanding performance has even boosted sales of Nintendo's next-generation home phone, the NS, as its exclusive platform. It can be seen that the power of content is far greater than people's imagination, and the independent research and development of high-quality works is still the origin of all business activities of a game company.

The new problem brought about by Tencent Interactive Entertainment's long-term simplification to complete the bottom-up harvesting strategy is that the market changes with the aesthetic upgrading of domestic users.

At present, there are two modes in China's game industry, one is the Tencent-style traffic funnel to target the bloggers of the game, and the other is the narrow crowd mode represented by NetEase, which relies on games to attract users. From a strategic point of view, Tencent has obvious strategic advantages. At least the income brought by current users is more than the sum of three NetEase, but the long-term problem is that China's game market will come to an end even if it sinks infinitely. According to a friend of a well-known entertainment investment institution in China, the penetration rate of people who calculated Chinese games before League of Legends, Arena of Valor and Jedi begged was less than 5%. Today, the number of users of Arena of Valor and stimulation Battlefield games has reached an upper limit of the population base ratio of Internet users.

Therefore, the early stage of the game is an industry with high experience, high upfront investment and high return. But as Tencent educates the Chinese game market as Taobao educates Chinese online shopping, what is bound to happen after that is the aesthetic upgrade similar to the upgrading of consumption, that is, from non-heavy to medium-heavy. Games will become the same leisure way as watching movies, shopping and eating in western countries, at least at present, the first and second generation players in China are already moving in this direction. Therefore, the mode of relying solely on the size of users to win will become more and more difficult in the future, which is bound to mean greater investment in self-research or content investment on a larger scale than self-research.

But for real monopolists, no change is the best change. The mission of Trust and Konzaine is to eliminate all the innovators in the world.

Ren Yuxin (sixth from left-Mark) is in charge of PCG shouldering the great responsibility of making headlines, while Ma Xiaoyi (fourth from left-Steven) entered the general office before Lu Peng and became the hottest personnel hot spot in IEG after the third structural adjustment.

A game history, half a history of Tencent.

After reviewing the course of China's game industry and Tencent's game business, it has not been plain sailing for more than 20 years, only to follow suit.

The theory of electronic HAILUOYIN has been shrouded in it since the game was introduced into China. Chinese parents rarely trust each other in the face of games, but they are still used to throwing away a tablet or smartphone to let their children explore on their own-much like what happened when personal computers first entered China.

Rarely do Chinese parents spend as much time as foreign families taking their children out on DALIE, fishing, playing ball, and so on, but as long as Chinese parents' children have any academic or other problems in their growth, games have become the best way to pass the buck, and game companies led by Tencent have also become the source of all evil in their eyes:

The game itself can't talk, let alone refute to parents.

Tencent will not refute public opinion, but will only listen to opinions with an open mind and quietly make improvements.

In the last era, the treatment of Internet addiction extended from playing games, electroshock therapy has become a child's nightmare and the tragedy of the times. Until today, the so-called primary school students who "gave Tencent the whole life" have gradually become parents, and when the "primary school students of that year" began to play games with their children and choose games that are really suitable for their children, for the first time, China's game market has received due respect and recognition, and the game has begun to return to what it should have been. Tencent really played an important role as the driving force behind the scenes.

In the last era, due to the suppression and doubt of the policy and social environment on e-sports 's industry, these e-sports athletes had no other income, let alone other sources of income except the event bonus. The images of contestants making a living by selling meat muffins and fish tofu with a profit of only a few cents each in online stores are vivid.

Today, we can see that e-sports practitioners of games from CF to LOL to Arena of Valor, PUBG and other games are getting more and more attention and economic benefits that they deserve. Even today, the IG team winning the championship is no less than the feat of winning honor for the country by Chinese competitive athletes. However, behind these interests and concerns, they all come from the hands of Tencent, the emperor who is willing to open up and share his own interests, but is also willing to turn his hands into clouds and rain at any time.

In the last era, due to the backwardness of the overall domestic technical conditions at that time, the shortage of capital budget, and the setbacks on agency and R & D caused by the disparity between Chinese and foreign enterprises, the fledgling Tencent had to take the edge of the sword. even adopt some criticized ways of reference, only after winning the market through products can we have the original capital for learning and continuous self-improvement.

This experience is similar to the experience that Ma Huateng once pretended to be a girl to participate in QQ online chat by registering his secondary account and faking information after the first version of QQ was launched 20 years ago-funny, but full of sadness and helplessness.

Today, Tencent can justifiably negotiate with the copyright owners, or even invest in overseas game companies that were once too high to afford and shut themselves out and had an incomparably tough attitude.

Relying solely on their current industry status, they can simply and rudely operate like Copy To China without a bottom line, or wander around the legal edge like SP page games and mobile game developers and make a lot of money. But Tencent chose the right path, chose to try cooperation and introduction, and chose to spend precious time and cost to set some precedents for the industry, but it was bumpy all the time.

On May 8, 2019, the day after launching "Tech for Good" as its new mission, it took 453 days for "Game for Peace" to take over the PUBG, and Tencent explicitly rejected users under the age of 16. However, due to the concessions made by the policy to modify and lock the content, Tencent has been burdened with doubts and puzzles from C-side players.

And anti-addiction system has already started running on many mobile games, including Arena of Valor. Although mothers no longer have to worry about their children's study, I don't know whether their father will blame Douyin Kuaishou or other new things when their grades decline in the future. At almost the same time 10 years ago, the documentary "Battle net Devil", which introduced Dr. Yang Yongxin, was a hit on CCTV, when the target was still "violent game"-"Nine cities", the unscrupulous agent behind World of Warcraft.

Yesterday, there was also good news from Tencent Interactive Entertainment. The PUBG mobile game version has swept the world in recent months, and "ArenaofValor" has previously logged on to the Nintendo NS platform to open up multi-front operations. But at the same time, the entry of Steam platform into China is also in full swing, which is a brand-new war for Ma Xiaoyi.

Earlier, Nintendo officially announced a partnership with Tencent, which represented Nintendo's Switch console to open a new step in China's home game market. And then, about the players concerned about the national service store, game review, game content introduction, including a series of new problems, then threw to Tencent: after all, "monster LIEREN: the world" lesson vividly, the road ahead is still treading on thin ice.

A great enterprise is never born great. What is really great is usually shown in the process of its growth. In addition to the huge profits actually made, the title of game king is more about its social responsibility and industry responsibility, and even the future and destiny of the world game industry tomorrow, and of course, what is more important is the trust of countless players at home and abroad.

The king should be on guard against diligence, for idleness is the privilege of slaves.

The king does not argue, but debate harms his prestige.

If you are king, there is no peace.

Only in that way can your kingdom, power, glory, and half your life be yours. Even if the innocence collapses, your players are willing to lie down with you.

Some references:

Ma Huateng's Tencent Empire by Lin Jun

2017 Anu Hariharan exclusive interview with Tencent CXO Dawei interview shorthand

Shorthand interview between Liu Chiping of Slush and Ilkka, founder of Supercell in 2017

Interview shorthand of Li Xueling GGV Capital's GGV996 podcast program in 2018

Some of the pictures in this article are quoted from Internet sources.

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