Shulou(Shulou.com)11/24 Report--

In game theory, there is a classical sailing game model. It is said that in a sailing race, the two sailboats came to a critical moment not far from the finish line, but now the direction of the wind at sea suddenly changed.

The leading sailboat is faced with a choice: do you want to adjust the sail? If the change in the direction of the wind continues, choosing to adjust the sail can maintain the lead and win. If the change in the direction of the wind is temporary, adjusting the sail will make the previous lead disappear, or even be overtaken by the opponent and lose the game. How would you choose?

In theory, the best way for the front ship is to look back at its competitors. If it adjusts the sails, it adjusts the sails, and if it does not adjust the sails, it remains in its original state. No matter how the wind changes, the front ship can keep ahead. The leader imitating the pursuer is the core strategy of this kind of game. In a rapidly changing market environment, it is often difficult to judge whether the current change is a tuyere or a bubble. The leader should make decisions based on the strategy of the pursuer, not through the analysis of the external environment.

On the PC side, although it is still faced with challenges from rivals such as Epic and Origin, Steam is still the undisputed leader. It may be the strength brought by the basic Steam, or it may be the consistent background of gamblers. Valve, which should have followed its competitors' strategy to remain invincible, made an unexpected bet.

"V Society's VR Touxian and handheld equipment strategy have something in common, revealing that V Society is trying to become a hardware company." Javier Barnes, a senior product manager at King, made this judgment.

Yes, V Society launched a VR headset called Valve Index in 2019, which officially entered the burgeoning field of XR hardware and competed with Meta, Pico and other manufacturers. At the same time, the handheld Steam Deck was launched in February this year, and competitors have upgraded to Microsoft, Sony, and Nintendo's traditional mainframe, as well as new cross-border giants such as Tencent.

Just a few days ago, Steam Deck's long-suffering capacity problems also improved. The V Society announced on October 7 that it had processed all booking orders and that players would no longer need to book to purchase equipment directly. Previously, due to endless supply chains and component shortages, V Society was forced to launch a reservation system for customers to queue up for seats. This also reflects the raw and insufficient of V Society in hardware supply chain management.

In fact, compared with the hardware field where people are unfamiliar and highly uncertain, picking up well-known series such as DOTA, half Life and Survival, continuing to do self-research games, breaking the myth that G Fat will not count 3; launching a mobile version of Steam, expanding the influence of mobile through streaming services, all seem to be more promising and topical. But why did V Society choose two emerging hardware platforms as its main direction in the future?

01 seize the vacuum period, Javier Barnes posted his analysis and views on Deconstructor of Fun. The following is the compilation of its shared content:

In the past, fans debated which game platform would be the winner among the many competitors, and there would be new competitors with each generation change (such as Sony, Microsoft …... Enter and eliminate some of the original players (such as Sega, Atari). Today, fans of PC, PlayStation and Xbox continue to debate who will take the hegemony. However, while this may seem like a significant battle, in fact, these players are only a small part of the large number of game users dominated by mobile gaming platforms.

It is an indisputable fact that in 2022, most people around the world chose smartphones as their main gaming platform. After all, every PC and console player has a powerful gaming device in his pocket. Newzoo estimates that by 2021, more than 90 per cent of players will play games on their mobile phones. The huge number and income of mobile players around the world show that other game platforms are becoming value depressions, which is already reflected in the scale of revenue.

Since Apple launched in-app purchases, the growth of the gaming industry has been driven by mobile devices.

More relevant to our theme is the strong argument that the dominance of mobile gaming platforms will continue to increase in the coming years:

The large number of casual players in the market are almost the exclusive audience of mobile platforms, and they are less likely to buy more professional and expensive gaming devices. The popularity of the Wii among non-player audiences will become more difficult to achieve because TV itself provides many additional features that make the Wii an add-on to the TV.

Players in emerging markets have chosen mobile phones as their main gaming platform because smartphones already play the roles of mainframe, TV and PC. Nowadays, people have to have mobile phones, but they don't have to have other types of devices. As a result, it is cheaper to over-invest in a single platform such as a mobile phone than to diversify between multiple platforms, especially when the quality differences between different platforms become more blurred.

In many parts of Asia, especially in China, players have also chosen mobile devices as their main gaming platform. This may be why hard-core games such as MOBA or self-walking perform poorly on Western mobile platforms but do well in China.

Young audiences are getting used to the fact that their gaming experience is not limited to a single platform. When they leave home, they turn off the original god on PC and turn it on on their mobile phone. How can we expect them to have a dedicated gaming platform when they have a similar experience on another platform?

The number of Western game users who are the main pillars of traditional game platforms will eventually be reduced because they will get older and have lower economic value. As the quality gap between mobile platforms and mainframe and PC games becomes smaller and smaller, they will also find that they have less and less incentive to buy console or game PC.

Mainframe platform vendors have noticed this shift. After all, this is one of the main reasons why their incomes have stagnated over the past two decades. The concept of stand-alone hosts will face potential threats in the next decade.

This is why on the hardware side, some innovative trends are under way to make the host more mobile: for example, the shift to cloud games is aimed at eliminating high entry prices and providing a gaming experience that is not subject to any hardware restrictions. The final step in this path is to allow players to have a mainframe-like experience anywhere through a screen and Internet connection, making it as versatile and portable as a mobile phone.

On the software side, this trend is more pronounced and has been going on for several years. Many developers hope to lay out the mobile side by participating in acquisitions (such as Take-Two 's acquisition of Zynga, Activision Blizzard's acquisition of King, etc.), or simply by launching mobile versions of existing games (such as CoDM, Apex Hero Mobile, PUBG, etc.).

In other words, the V Club barely made headlines in mobile games, which is not as surprising as it seems at first glance.

As an unlisted company, V Society has less pressure to pursue hot trends in the capital market, which gives them more freedom to bet on different opportunities. These opportunities are often ignored by its competitors, and sometimes in order to satisfy the whims of shareholders, competitors even create opportunities in favor of the V Society.

An important example occurred in the early 21st century, when many similar game developers focused on developing games for consoles because consoles dominated the market in terms of revenue. Instead, the V Society bet on what shareholders might object to: they doubled their efforts on the PC platform, which seemed to be dying at the time, and launched Steam in 2001.

The result is self-evident: the competition vacuum of the PC platform has made Steam a mainstream game store, and now it has become the main business of V Society.

Ten years later, the development of the PC platform was inspired by the stagnation of mainframe technology and the emergence of DLC and GaaS (Game as a Service, game as a service). Then, many competitors also tried to set up their own game stores (for example, Ubisoft launched Uplay,EA in 2012 and Origin in 2011), but it was too late, and the PC platform was already the back garden of V Society.

02 find your own walled garden if we look at the current strategy of the V Society, it is clear that it still follows the idea of 2001, that is, to avoid the advantages of others and create its own back garden. Although everyone is focused on mobile, the space in this market is so crowded that no one can dominate (especially because it is already the back garden of Apple and Google), so V Society chose to redouble its investment in VR headsets and portable devices.

Therefore, each reason for this bet needs to be analyzed separately:

V Society is one of the leaders in VR games, and they have achieved this goal by taking advantage of the huge number of Steam users and the power of the game IP ("half Life: Alex" is a necessity for any VR gamer).

By releasing Valve Index, they have also become hardware independent, making it arguably the best VR headset for games. This will enable them to avoid the negative impact of Meta's attempt to build a hardware back garden.

Although the current total market size of VR is almost negligible, there is no guarantee that it will always be the same. If VR becomes a more valuable platform in the future, V Society will occupy the leading position in the industry second only to Meta, and the amount of investment is only a small part of Meta. Even if the actual size of the VR market over the next decade is much smaller than Mark Zuckerberg's meta-cosmic dream, it will still be an incredible victory.

The V Society's handheld strategy seems to be aimed at grabbing host users by transforming it into a more portable form. In my opinion, this strategy has something in common with the V Society's streaming experiment. The experiment allows players to use streaming to move game footage from the PC to other devices, pursuing the possibility of replacing the host through cloud computing, even if cloud computing has technical challenges that may not be overcome (higher-than-average latency, demand for ultra-high bandwidth, etc.).

The V Society's Steam Deck is a portable computer that allows players to access their Steam game library anytime, anywhere. However, current sales have not proved that the product meets the market demand, at least not yet.

If a large number of players move from traditional console platforms to other platforms in the future, they may choose a portable device that works with their existing game libraries and provides a better game experience, rather than cloud game subscriptions. because of the technical limitations of cloud games, it can only provide a suboptimal gaming experience.

In fact, V Club may not be the only company looking forward to the opportunity. Earlier this month, Logitech and Tencent just released a product similar to that described by Steam Deck.

The main problem with this plan is that no portable hardware seems to be able to replace mobile phones in the future. Portable hosts are being destroyed by mobile devices, which seems to be an inevitable threat to survival. However, the threat was delayed by Nintendo's key IP power.

More importantly, despite surprisingly good results, Steam Deck sales are still not close to those of Nintendo's counterparts. Although we can assume that this is a profitable attempt, for companies like V Society, the revenue generated by hardware may be lower than the opportunity cost.

But I suggest that we need to be cautious in judging whether the actions of the V Society are short-sighted. After all, the company has proved several times in the past that it can spot opportunities that its rivals cannot.

Players began to choose Steam Deck as their portable host is only a small success, but this can not be seen as the first step for players to choose a portable handheld instead of smartphones, this is a completely different concept.

Is it right to give up mobile games? V Society's VR Touxian and handset equipment strategy have something in common, revealing that V Society is trying to become a hardware company.

Suppose V Society can release a Steam Phone that can provide the same functions and applications as smartphones (such as TikTok, WhatsApp, etc.), as well as access to the Steam library. In this case, they have the possibility to surmount the existing barriers in the mobile market and be closer to future users.

In order to successfully achieve this assumption, V Society does not have the professional skills needed (such as managing manufacturing and logistics, and the order of magnitude of products entering the market is much higher than what they have achieved now). But after the release of the VR headset and handset products, they are closer to this assumption.

What happens if V Society releases mobile games (software)?

In the short to medium term, V Society does not seem to have any plans to release mobile games. Although this will frustrate fans, V Club's business is not to develop games, but to build and operate the platform (the existing back garden). Their self-developed games are mainly for the platform to attract users (similar to console exclusive games). The number of users attracted by a single product does not prove that a company of the size of V Society is worth trying to develop its own mobile games.

So far, V Society's only attempt to enter the mobile field is "knife Tower domination", the game was first launched on the PC platform, and soon launched a mobile version, which is very close to the initial strategy of the fist game "Genting Game".

Although Genting has achieved only modest success in western markets, and there is growing evidence that the market space for self-moving chess will not be as big as that of MOBA or PLAYERUNKNOWN'S BATTLEGROUNDS, fists have not stopped supporting Genting. In the end, when they achieved great success in China, they were rewarded. (when "Arena of Valor" became China's League of Legends, his fists had first-hand experienced the consequences of underestimating the mobile end, and the trauma of the past had kept them firm in the opportunity to move on their own.

On the contrary, V Club's interest in turret seemed to disappear quickly, and although it was beautifully made and superior to similar games in many ways, it did not become a breakthrough game and ended up with less and less development support.

In addition, the profits generated by publishing self-developed games are not big enough for a company of the size of the V Society. Only when the self-moving type becomes the type of global sensation, does "knife Tower hegemony" make sense. Therefore, it is not surprising that the V Club soon lost interest in it.

The strategy of the V Society against the current has enabled them to win great victories in the past. But only time can tell whether giving up mobile phone terminals and betting on different areas will bring success to V Society again. Perhaps it could end up being seen as a huge strategic mistake.

The author believes that, judging from the current decline in smartphone shipments, V Society may be on the side of the door of opportunity.

This article comes from the official account of Wechat: ID:Coreesports, author: compiled by Wu Di

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