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

Three people stood on the podium cheering, below a graveyard, there are many tombstones, each tombstone is a project.

This is a cartoon made by Supercell, a star company invested by Tencent, when it held its internal annual meeting.

In the game field, the success will be withered, the winners are very few, and the uncertainty is great.

Coincidentally, Ma Xiaoyi, senior vice president of Tencent, and his team once compiled a list: in almost 30 years from 1990 to now, there are only more than 100 game production companies that can really be at the forefront. These can be regarded as the "pearls of global game production ability".

Of course, Tencent makes no secret of its global ambition. For a long time, however, there were only two words in Tencent's path to solve its competitors: investment.

When Tencent can really come up with a game work that has weight in the industry and in the hearts of players, Tencent Games's global "ambition" can be regarded as having a real foundation.

Tencent accelerated sea layout in September this year, Tencent reached a cooperation agreement with the famous French game manufacturer Ubisoft. Without interfering with Ubisoft's operational autonomy, Tencent will increase its stake in Ubisoft by 5 per cent, bringing its cumulative stake to 9.99 per cent.

In return, Tencent will be granted the rights to release and adapt a number of Yubi games in China. For example, Yubi's popular game / IP Assassin Creed may meet with the majority of players in the form of mobile games with the help of Tencent in the future.

Speaking of, this is not the first cooperation between Tencent and Ubisoft, the friendship between the two actually has a long history.

Tencent has been called the "savior" of Ubisoft by Polygon, a well-known overseas game media.

At that time, the notorious Viwandi maliciously acquired Ubisoft, which could not afford to be left alone, and then Tencent took a 5% stake, successfully preventing Ubisoft from falling into the wrong hands.

In addition to reaping its friendship with Ubisoft and further releasing its goodwill to overseas game markets, Tencent has also won the distribution rights of a number of PC / mobile games owned by Yubi in China, further making up for its deficiencies in research and development and IP reserves, and accumulating strength in the upper reaches of the game industry.

In fact, this idea of investment for cooperation runs through Tencent's layout of the overseas game market all the time. With the enhancement of the ability of banknotes, this simple and brutal way of overseas expansion has brought obvious development advantages to Tencent:

In 2008, Tencent invested in American fist games (Riot Games,2015 was completely acquired by Tencent), winning the exclusive agency of "League of Legends" in China. The popularity of "League of Legends" in China is self-evident. Mobile games such as "League of Legends Mobile Games", "Genting Game" and "Arena of Valor" have brought rich economic returns to Tencent. No wonder Ma Huateng called his investment fist Tencent's "most successful overseas investment".

In 2012, Tencent invested in Epic Games in the United States. while winning the illusory game development engine and successfully cutting into the underlying core technology of the game industry, Tencent also won the domestic agency of games such as "Fortnite" and "Unreal struggle for hegemony".

In the same year, Tencent reached a strategic cooperation with Activision Blizzard of the United States, won the domestic agency for call of Duty, and helped Activision Blizzard get rid of Viwandi's entanglement in 2013, taking a 6% stake in Activision Blizzard in the form of a strategic stake. In 2020, the call of Duty Mobile Game, jointly launched by the two, has become one of Tencent's overseas money-sucking tools.

In 2016, Tencent bought 84.3% of Finnish mobile gaming giant Supercell (supercell) for $8.6 billion, the largest acquisition in Tencent history. Tencent won the agency of all Supercell mobile games, such as "tribal conflict" and "Royal War", and replaced Supercell as the highest-paid mobile game company in the world.

In 2017, Tencent invested in South Korea's Blue Hole Studio, won the exclusive agency of "PUBG" in China, and launched "PUBG: exciting Battlefield" in 2018, which has become one of Tencent's most popular mobile games overseas.

The above are several key nodes that Tencent laid out overseas in its early days.

It can be seen that almost all the sea games that Tencent can handle are "imported". It also reveals the deficiency of Tencent's self-research capabilities and original IP reserves. Although Tencent can fight internationally with banknotes, it is not enough for a company that wants to really gain a foothold overseas and win more players' respect.

As for Tencent's dedication to "end-to-end change of hands", it is rooted in Tencent's accumulated advantages in mobile game research and development and operation, and conveys the sea logic of "IP + end-to-end resale + global distribution".

However, it is different from the early "slowly drawing". With the gradual tightening of the distribution of domestic game version numbers since 2018, the gradual enhancement of the regulatory intensity of game content by relevant institutions, and the saturation of the domestic mobile game market, Tencent has in fact entered the stock dispute and so on. Tencent has significantly accelerated its layout at sea in recent years.

Take this year as an example. According to the incomplete statistics of the nuclear competition, so far, Tencent has launched at least 12 investments in overseas game manufacturers. In addition to increasing its stake in Ubisoft, Tencent invested with Sony in Japanese game maker FS, which became its second largest shareholder, and Tencent later invested in Slovenian game maker Triternion.

In addition to investment, Tencent is also actively recruiting top overseas game talents. This year, Tencent recruited Ashraf Ismail, former creative director of Assassin's Creed, Nicolas Bouvier, former art director of Halo: infinity, and Sony's former president and CEO Shawn Layden of North America.

At present, the global game market can be divided into four regions: Europe and the United States, Asia-Pacific, the Middle East and Latin America.

First of all, let's take a look at Europe and America.

As one of the main battlefields of the gaming industry, Europe and the United States have been at the forefront of the global gaming industry.

With the high maturity of the local market, as well as the solid economic foundation and good willingness of players to pay, Europe and the United States are the focus of the early competition of domestic offshore game manufacturers, and it is also the first choice for them to go to sea in the early stage. For example, Jujia and Lilith went to America and Europe in 2010 and 2015 respectively.

The reason why they did not fight against the domestic game market was that Tencent and NetEase were fighting each other in China at that time, so they took the lead in laying out overseas game markets, especially in Europe and the United States, and finally came back strongly. become the other two major game publishers in China after Tencent and NetEase.

In the face of a strong enemy that is difficult to defeat, sometimes avoiding its edge and attacking outward can be regarded as a curved path to achieve counterattack.

Compared with Jujia and Lilith, Tencent, which has only gone out to sea on a large scale since 2018, has indeed lost the opportunity.

However, Tencent's early investment layout in Europe and the United States still established a considerable late-development advantage.

In the European game market in 2021 (which includes only Germany, the UK and France), Tencent ranks first among domestic game makers in Europe with a revenue of $375 million, far away from Jujia and Lilith.

Secondly, let's take a look at the Asia-Pacific region.

The Asia-Pacific region is home to the largest number of players in the world, accounting for about 55% of the global total.

With a huge player base, the Asia-Pacific market accounts for 49% of global gaming revenue, ranking first in the world.

Due to the proximity of geographical location and the influence of Confucian cultural circle, the Asia-Pacific region has become the first choice for many domestic game manufacturers to go to sea in recent years.

Among them, South Korea has the deepest relationship with Tencent. For example, as we mentioned earlier, "PUBG Mobile", one of Tencent's most popular mobile games overseas, its IP belongs to Blue Hole Studio in South Korea. Speaking of, it is precisely because of the passivity of IP that Tencent has to sell a high share of income, which is why it won the overseas distribution dominance of "PUBG Mobile" from Blue Hole.

In short, Tencent has a long history of cooperation with South Korean game manufacturers. Tencent has established close ties with the Korean gaming industry by investing in some companies. In July this year, Tencent applied to join the Korea Game Industry Association to further enhance its voice and influence in the Korean game market, but the results are still unknown.

Also unknown is Japan, which has always been called a "game island" by the outside world.

At present, NetEase, who successfully entered Japan with the breezy "Onmyoji", is still the largest domestic game manufacturer in Japan. Since then, NetEase, who successfully seized the first batch of "chicken dividend" in Japan, even introduced "Operation Wild" into Japan, becoming NetEase's most lucrative game in Japan. Japan has also become the bulk of NetEase's overseas revenue from games.

In contrast, PUBG Mobile, which is also a shooting game, entered the Japanese market later, so Tencent's not a wonderful ending is to be expected.

On the road of going out to sea in the game, if you can't seize the opportunity, or win by surprise, then you will be slow step by step, and it is very likely that there will be no room for counterattack.

But Tencent will never give up on the Japanese market, and its Apex Hero Mobile Game, launched in partnership with EA, is launching a new round of impact on the Japanese market.

In addition, Nikkei reported in June that Tencent plans to build a third data center in Japan, mainly for online live streaming and game cloud services. According to industry insiders, this is a further attempt by Tencent to build a meta-universe, such as "creating a super digital scene that creates new value through game technology".

In short, in this two-dimensional country, Tencent's operation has also become "dreamy".

Compared with the "retreat" in the Japanese market, Tencent's layout in Southeast Asia is more realistic. Southeast Asia is also the focus of Tencent's sea voyage in the Asia-Pacific region at this stage.

In fact, with the help of multiple factors, such as the large population, the increasing Internet penetration rate year by year, and the gradual awakening of players' awareness of payment, Southeast Asia has been regarded by the industry as "the most potential market" in recent years.

Indonesia, the Philippines and Malaysia, three Southeast Asian countries, have bucked the trend in the past two years under the influence of the epidemic, when the number of gamers in most parts of the world has declined more or less.

Unlike Japanese and South Korean players who are more enthusiastic about RPG, Southeast Asian players generally prefer games with strong social attributes such as MOBA and MMORPG. The situation varies from country to country, for example, Indonesian players prefer board games and simulation games, Malaysian players prefer super casual games, and players in countries such as Vietnam and Thailand prefer moderate and heavy games such as RPG and strategy games.

In this complex battlefield, Tencent, which has a rich range of games, has a considerable advantage.

For example, on the revenue / download list of domestic mobile games going abroad in Southeast Asia last year, Tencent's "PUBG Mobile" and "AOV" were among the top five. "AOV" was the overseas version of "Arena of Valor" recognized by the outside world before Tencent launched "HOV".

On the one hand, this benefits from the attraction of these games to Southeast Asian players, and on the other hand, it is due to Tencent's capital layout in the Southeast Asian market.

Generally speaking, because Tencent lacks its channel advantage at home overseas, in order to reduce the risk of entering the local market, Tencent often chooses to cooperate with local companies, usually accompanied by investment holdings. For example, when Tencent took "QQ Speed" to Vietnam, it handed the game to VGN, a local Internet company in Vietnam; when it went to other parts of Southeast Asia, it was mostly released by Singapore game maker Garena.

By buying shares in local companies in Southeast Asia, Tencent has established a big advantage for itself to go to sea in Southeast Asia. Although this advantage is not decisive, why? We'll talk about it later.

Let's take a look at the Middle East again.

The Middle East has always given the outside world an impression of mysterious culture, yellow sand, backward entertainment life, and Tuhao's "simple and unadorned" and so on.

In the first half of this year, an Arab crown prince bought a 96.18% stake in SNK, a veteran Japanese gaming company. According to rumors, the crown prince did this purely because he liked the "boxing king" of SNK.

This makes people feel that the way rich people express their love is sometimes so simple and unadorned.

More unpretentious, there are gamers from the Middle East. For example, in 2009, net dragons who were caught up in skepticism in China came to the Middle East with the mentality of trying and brought "conquest" to local players.

In the eyes of domestic players at that time, "conquer" was definitely a web game on a bad street. But in the Middle East, which at that time could be called the game desert, "conquest" really realized the "dimension reduction blow" and lasted for seven years to bring profits to the net dragon. Since then, Longteng Jianhe also came to the Middle East with "Revenge of the Sudan". This more thoroughly easternized game has brought greater benefits to Longteng Jianhe.

After the success of the two, a large number of Chinese game manufacturers, including Tencent, poured into the Middle East, and the Middle East went from the "blue sea" to the "Red Sea" by Chinese game manufacturers.

Tencent comes from behind and kills all directions with "PUBG Mobile". Data show that in February this year, PUBG Mobile's market share in the Middle East reached more than 55%, occupying an absolutely dominant position.

Chen Yu, president of Tencent Photonic Studio Group, recalled that when he and his colleagues took part in the "2019 PUBG Mobile Stars Challenge World Cup" e-sports competition officially in the old palace in Arabia in 2019, a project manager at the old palace told them that he had downloaded "PUBG Mobile" on all three mobile phones. Before parting, the Arab man did not forget to suggest to Chen Yu and others, "can you make some Saudi-style clothes in your game?"

Finally, let's take a look at Latin America.

According to the 2022 report on the driving Forces of China Mobile Game App going out to Sea, the Latin American market has become a new growth point for Chinese mobile games going abroad, with a market share increasing by 83% in just five years compared with the same period last year.

Among them, the Brazilian market is the most valued by the outside world, because based in Brazil, it can radiate the entire Latin American market. Game makers are rubbing their hands in an effort to reap the benefits of the Brazilian market.

Tencent announced in June that it would officially enter the Brazilian market and set up a local team here to allow "South American management and South America to be more localized".

Pupil science and technology also broke into this place with "endless duel" and began to try to localize. As for Mihayou, he also competed for the local market by virtue of the "original God", adding more uncertainty to the situation.

All in all, by understanding the four major game markets in Europe and the United States, Asia-Pacific, the Middle East and Latin America, we can find that Tencent's game tentacles are almost all over the world, and a global game empire has been formed.

Does this mean that Tencent's pace of globalization is overwhelming?

The answer may not be.

Who can stop the globalization of Tencent? Having money is Tencent's biggest advantage in going out to sea. But looking overseas, Tencent is not the only one with money.

Microsoft, Sony, Take-Two and others are also deep-pocketed and have masterpieces of games that can be used. They not only have a higher status in the hearts of players at home and abroad, but also adopt a buy strategy similar to that of Tencent.

This year, there have been three big acquisitions in the industry, with Microsoft announcing the acquisition of Activision Blizzard and Take-Two buying social and mobile gaming company Zynga; Sony and game production company Bungie.

One of the things that deserve Tencent's attention is probably the case of Take-Two 's acquisition of Zynga.

Take-Two is a game company headquartered in New York, USA. As early as 1997, it was listed on NASDAQ with many well-known games IP. Zynga is also a game company based in the United States, with a variety of online social games and mobile games, and has a reputation in the industry.

Take-Two is now paying a high price for Zynga, which undoubtedly shows its ambition to increase the size of the mobile game market.

For Tencent, Take-Two plus mobile games is definitely bad news. Because what Tencent goes out to sea is mainly mobile games. Now, in the face of the trend of mobile games and GaaS (Game-as-a-Service, service games) by overseas game giants, Tencent will face more fierce market competition.

At the same time, competition from domestic offshore game manufacturers has also added more variables for Tencent to go out to sea.

A typical example is Mihayou.

As a model for domestic game manufacturers to go out to sea in recent years, the success of Miha you is beyond doubt. With a two-dimensional style of the open world game-"the original God", Miha you has pried open the global game market, which can be regarded as a "fresh move, eat all over the sky".

According to rumors, when the "original God" was a great success, Tencent tried to use its tried-and-tested banknote ability to buy a stake in Mihayou, but Mihayou, which is not short of money, is very tough, and Tencent is impatient but helpless.

Speaking of, Miha Youyou and Tencent do not deal with in the thinking of going out to sea is evident.

If Tencent is following a steady path of being keen on agents and casting nets widely, although it often puts it in a passive position, then Miha is following a path of specialization that focuses on self-research and cuts into a finer track.

Although the train of thought of "one road to black" is extremely easy to turn over and the cost is extremely high, if it can really get through, the result is also obvious. Fun plus and Lilith are a good example.

Fortunately, they succeeded; unfortunately, more "they" failed.

Because of this, it is not difficult for us to understand Tencent's "stability" mentality. It's just that the success of Miha Tour around the world has finally stimulated Tencent. This is not true, Tencent recently spent a high price to win the "Magic Tower International version" in the overseas agency. Tencent's move is also seen by outsiders as "missing out on investing in Miha Tour, and even missing out on the secondary market and the tuition fees that need to be paid."

According to industry insiders, in addition to the "Magic Tower International version", Tencent will continue to increase the size of open world games. For example, the now exposed "Arena of Valor: the World", and more unexposed "moon landing projects"-through the iteration of one or two generations of products, the final production of "cyber punk 2077" and "GTA" level of the game.

In short, under the reverse incentive of Miha Youyou, Tencent, which is deeply threatened, is making changes.

However, Mihayou is not the only domestic game maker that can make Tencent feel threatened. In addition to NetEase, who stabilizes Tencent in the Japanese market, Mu pupil Technology, which was acquired by byte jump in March this year, has also suppressed Tencent in the Southeast Asian market.

An intuitive example is the "endless duel". As a sharp weapon of going out to sea under Mu pupil, "endless showdown" has been operating in Southeast Asia for more than 5 years, but its popularity has not diminished. This year, "endless duel" with 47 million downloads, firmly ranked first in the download list of domestic mobile games going out to sea in Southeast Asia, beating Tencent's "PUBG Mobile" and "AOV".

In contrast, although Tencent's "AOV" is also popular with Southeast Asian players, and Southeast Asia is also the majority of "AOV" overseas revenue, but too similar game content and mechanism, as well as the reality of later entry into Southeast Asia, let "AOV" be defeated by "endless showdown" and be suppressed by the latter.

Only in a small part of Southeast Asia, represented by Vietnam, where Tencent has more influence, can "AOV" occupy more advantages. As for where does "greater" influence come from?

This is thanks to the capital layout of Tencent in these areas as we mentioned earlier. Unfortunately, due to over-reliance on local agents, coupled with Tencent's lack of overseas game distribution experience before "AOV", various versions of "AOV" have appeared in Southeast Asia, seriously affecting its wider promotion in Southeast Asia. As a result, compared with the global service of "endless showdown", "AOV" is once again at a disadvantage.

As the saying goes, "misfortune depends on good fortune". The defeat of "AOV" makes Tencent pay attention to the construction of its overseas distribution team, and choose the same service globally when releasing "PUBG Mobile" overseas, thus connecting the entire overseas game market. While "PUBG Mobile" attracts money crazily for Tencent, it also further expands Tencent's influence in the overseas game market.

As for "AOV", it is likely to be abandoned by Tencent. A clear signal is that on June 7 this year, Tencent official announced that it will launch the real overseas version of "Arena of Valor"-"HOK", which is expected to be officially launched by the end of this year. To some extent, "AOV" has become a "double".

It is also sad to say that Tencent did not hesitate to take the latter to court many times in order to cut off the "endless showdown" for "AOV". At present, there is no result of this case, but the entanglement between Tencent and Mu pupil will continue for a foreseeable time.

All in all, Tencent is heartbroken in order to better go out to sea for its games. Although Tencent is bound to face double challenges from game manufacturers at home and abroad on the way to sea, for Tencent, since it has chosen to go out to sea, it can only forge ahead.

Going out to sea is the only way forward. Once upon a time, for domestic game manufacturers, going out to sea was only one of the options. However, as we mentioned before, whether it is the gradually tightened release of game version numbers, or the increasing intensity of game regulation, or the saturated domestic game market, and the slightly tired dispute over game stock, and so on, it has become a consensus in the industry that "don't go to sea, you're out".

In this context, Tencent's going out to sea can also be regarded as conforming to the trend.

Tencent's market share in overseas mobile games has exceeded 20%, ranking first in the world, and "PUBG Mobile" has also occupied the top position in the world. In the overseas mobile game market has a low degree of headquarter, and the "mobile game window" has not yet been closed, Tencent obviously has further capital and strength.

As a result, games have always been a major source of revenue for Tencent, accounting for about 1gambit 3. In the fourth quarter of last year alone, Tencent's overseas game revenue reached 13.2 billion yuan, accounting for 30.8% of Tencent Games's total revenue at that time.

No wonder Ma Xiaoyi, senior vice president of Tencent, revealed to the outside world, "in the past, I only spent about 20% of my time overseas and spent most of my time in China." now, I spend 60% of my time on the global market. " For Tencent, the overseas game market is such a gold digging ground.

Interestingly, perhaps Tencent has a clear understanding of its external wind reviews, but also to cut the game business at home and abroad, in order to carry out a new round of integration of internal forces, and reduce Tencent Games's overseas business risks.

On December 8 last year, Tencent launched its own overseas distribution brand, Level Infinite, in an attempt to create Tencent Games's overseas "logo".

In the words of Shen Li, CTO of Tencent Games's international business, "the company feels that the name 'Tencent Games' is not very personalized, so it wants to solve this problem." We hope that the brand can really convey the game image we want to create, we want to release games, we want to create new brands, and we hope to establish a new image for players in the future, providing a large number of innovative and high-quality games. At the same time, it provides unlimited possibilities for players. This is the original intention of naming the new brand 'Level Infinite'.

The original intention is the original intention, what achievements Tencent Games can achieve when going to sea in the future depends on the action.

In other words, when Tencent can really come up with a game work that has weight in the industry and in the hearts of players, Tencent Games's global "ambition" will have a real foundation.

This article comes from the official account of Wechat: merchant Hidden Society (ID:shangyinshecj), author: scattered people, Editor: Zhen Lucky

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