Image source: Tencent
【Game-Time special article, no reproduction without authorization!】
Game-Time report/The fictional “The Annual Meeting Can’t Stop” is a hit in theaters, and the real annual meetings of well-known companies are also hitting the screens again and again.
NVIDIA CEO Jen-Hsun Huang performed a yangko dance on the stage at the 2018 New Year’s Eve event, which was still vivid in my mind. On the other hand, Tencent Chairman Ma Huateng sang the Cantonese song “Bless You” at the annual meeting, which aroused the attention of netizens. Even the 79-yuan red sweater he was wearing was on the hot search list. . Some people substituted the witty words of Tencent employees to wish “the boss will make a million a year”, and some talented fans praised “the handsome man and the beautiful songs”.
I won’t post more specific screenshots and video clips of Game-Time. Interested friends can go to Moments or Weibo to taste it by themselves.
Of course, our focus is not on Ma Huateng, who showed his hip-hop side before the epidemic with the song “At least I still have you”, but on the heartfelt remarks made by Ma Huateng and other executives and employees outside the talent show. Zihua.
Pursue old trees to sprout new ones: “We must concentrate resources to make high-quality products, which are both expensive and worth it.”
For example, Ma Huateng said that he is “very confident” in future development. This is why Tencent spent 6.42 billion yuan to acquire land and build buildings in Beijing, because where there is demand, there is confidence. Ma Huateng asked cadres to “penetrate to the front line” and also hoped that Tencent employees should maintain a normal mind and a good attitude. Every business should think about two things, one is “whether it can last forever” and the other is “whether there are new sprouts.” .
In addition, Ma Huateng also said that management should pay attention to the spirit of small teams, recruit people carefully, be responsible for the people they recruit, and experiment with small teams before thinking clearly. He hopes that employees will pay attention to the problem of excessive communication and reporting time and reduce the “idiot index” as much as possible. Ma Huateng also pointed out that in an era when content is king, “we must concentrate resources to create high-quality products, which are expensive but worth it.”
Tencent President Liu Chiping emphasized that we should continue to maintain strategic focus, maintain organizational and financial discipline, and fight against mediocre organizational inertia. At the same time, he also affirmed that after cost reduction and efficiency improvement and strategic focus, “we have gained a firm foothold.” Because our financial situation is healthy, we can “buy” time so that the team can do more difficult and correct things, and we can become a friend of time. Liu Chiping also revealed that the total exit rate of Tencent managers in the past two years was 32%, “this represents the company’s attitude.”
Tencent COO Ren Yuxin bluntly stated that “everyone is very welcome to give us your opinions.” He said that IEG has always regarded competitive battle games as the basic game, but it does not mean that Tencent only makes basic games. To make a hit “big white horse game”, Tencent also has a “green” plan to jointly invest and share risks with studios, as well as a “spring bamboo shoots” plan that recently encouraged small teams to work on dark horse projects.
Zhang Xiaolong, senior vice president of Tencent, said that he personally advocates process orientation, persistence and encouragement of small teams. He also revealed that one of WeChat’s methods of doing things is to pursue uncertainty. In his opinion, plans do not “change” as fast. Do something for a long time, pursue uncertainty and have new ideas every day. In the end, “time will help.” us”. Video accounts, mini programs, and mini games can all be called friends of time.
In addition, Ma Huateng also specifically commented on several major business sectors. Regarding AI, CSIG, PCG, WeChat, etc. Game-Time is a layman and it is inconvenient to express opinions. In his evaluation of Tencent’s game business, what can be clearly perceived is that Ma Huateng’s attitude is “very polite to his peers, but very humble to himself.” This also releases a signal of changes in Tencent’s game business. Tencent’s games in the future may More open and diverse.
Betting on the internationalization of Tencent games: “It’s like getting chicken blood”
At the beginning of the interaction, Ma Huateng explained the reason why he has seldom appeared in public in the past four years, saying that he concentrates on developing products internally and no longer rushes around like before.
The background for saying this is that ByteDance, the representative of the new generation of Internet companies, will surpass Tencent in revenue in 2023, and Pinduoduo’s market value once exceeded Alibaba. Once upon a time, B in BAT was rarely mentioned. Will A and T be next? This is a middle-aged trouble faced by established Internet giants such as Tencent and Alibaba.
Regulation and public attention to technology giants are increasing day by day, which has led to changes in technology giants. On the positive side, ByteDance has divested itself of self-development and distribution of games, Tencent’s “Honor of Kings” has launched on Douyin, and competition among major manufacturers has As relationships change, growth is a pain point for giants, and the ecological interconnection between giants makes future growth traceable.
Therefore, Ma Huateng spent a lot of time talking about the topic of “confidence”, repeatedly showing his confidence in Tencent itself and the macro economy. Tencent’s acquisition of land in Beijing, on the one hand, does indeed play a role in boosting confidence as outsiders say. On the other hand, it is a decision made after observing the overall environment, including the steady development of Tencent’s own business.
He emphasized the need to “return to products, services and content” and encouraged the team to “make our products and services evergreen” when evaluating WeChat and roll-call games. This is consistent with what Tencent repeatedly mentioned at the previous 2023Q3 financial report meeting. Qing Games is in the same vein.
When it came to the game segment, which was the highlight, Ma Huateng was very modest. He praised “new ecological game companies are emerging one after another” and praised “friends who continue to produce new products.” On the contrary, when talking about himself, he claimed that “we are at a loss” and “we seem to have achieved nothing.” .
It can be said that even at its own annual meeting, industry leader Tencent gave enough face to its peers in the gaming industry. In fact, behind Ma Huateng’s politeness is the fact that Tencent’s game business is still stable and its performance is still outstanding. It is reflected in specific products. Tencent’s e-sports DAU is still rising. “Yuanmeng Star” broke out, “Fearless Contract” became popular, “League of Legends Mobile” won the top spot on the best-selling list last year.
Tencent President Liu Chiping used PPT to give a report to employees at the annual meeting, using words such as “stability”, “evolution” and “bright spots” to encourage the game business.
When commenting on mini programs and mini games, Chiping Liu revealed that mini game users have exceeded 400 million, with annual revenue increasing by 50% and accounting for 8% of the entire game market.
When it came to the IEG section, Liu Chiping’s PPT not only praised competing products from competitors like Ma Huateng, but also praised his own star products, such as “Honor of Kings”, “Stable and Evergreen”, “Battle of the Golden Shovel”, “DAU Repeatedly “New high”, CF series sales reached new highs, “Yuanmeng Star” initially achieved scale, etc.
It can be seen that Ma Huateng’s modesty is actually based on Tencent’s high requirements for itself, and is used to encourage its own employees to work harder in the coming year. Outsiders must not take it too seriously.
So Ma Huateng immediately said, “Now we are as excited as chicken blood,” returning to the entrepreneurial state of the year, encouraging the team to “have fighting spirit and not rest on their laurels.”
The industry is anxious to unite with Zonglianheng: “Don’t be enemies with other game companies or hardware manufacturers”
When specifically talking about “Yuanmeng Star”, Ma Huateng changed the topic and stated that although it entered the game late, “Yuanmeng Star” is not only a game for Tencent, but also a social network and “Tencent’s base camp. I will do my best.” Making “Yuanmeng Star” has represented Tencent’s overall strategic deployment. This can also be understood why “Yuanmeng Star” is “not in a hurry to make money” and the strategy is long-term.
It can be seen that although it has been repeatedly characterized as an investment company by the outside world, Tencent still attaches great importance to games and research and development. For example, Ma Huateng also mentioned that “the overseas expansion of games is actually the company’s biggest hope for internationalization at present,” placing games in Tencent’s internationalization strategy. an indispensable first position.
Having determined the position of games in the company, Tencent is also determining its position in the entire gaming industry.
In any industry, the driving force for growth mainly comes from users, products, technology, and business models. In the past few years, two major factors affecting growth have emerged – macroeconomics and regulation, which are like double swords and continue to create challenges for the game industry.
In the past two years, the global gaming industry has clearly encountered a development bottleneck, and the domestic market has become even more anxious due to the explosion of new products.
The main economic problem is that fluctuations lead to a decrease in users’ willingness to consume and changes in consumption habits. Netizens’ use of short videos exceeds that of games. This not only happens in China, but is also reoccurring in overseas markets; supervision is related to overseas privacy protection, resulting in mobile game products Acquisition of users has been accurately reduced, leading to an increase in purchase costs. Domestic regulatory measures such as the total number of editions, as well as new regulations in the game industry that may be promulgated in the future, are also effectively affecting the game industry.
This has had a negative impact on the game industry. The intuitive manifestation is that during the epidemic, game companies frantically planned games. When they started to appear in the past two years, many of them became cannon fodder. The normalization of version number distribution led to a large increase in the supply of new games in the market, which further pushed up the cost of customer acquisition. , especially in the second dimension. In the past year, more than 50 second-tier games died after their release. Various reasons have led to the global mobile game market still showing negative growth in 2023. Although the Chinese game market has resumed positive growth and its output value has exceeded 300 billion, product supply has surged and industry profits have accelerated to flow to advertising platforms.
Tencent has a big business and its roles have always been diverse. They can be developers, publishers, platforms, advertisers, IP copyright holders and investors. The gaming industry as a whole is under pressure, but Tencent may not necessarily be a loser at certain times. For example, Tencent obviously benefits more in advertising and mini-games, but this does not mean that Tencent does not feel “pain”.
Of course, it is also true that every track is full of hidden dangers. However, the cold overseas is stronger than at home. In less than one month since the beginning of 2024, the number of layoffs from Activision Blizzard, Riot Games and other manufacturers combined has exceeded the entire year of 2023.
Against this background, it is not difficult to understand Ma Huateng’s good intentions in emphasizing confidence. Tencent, as the locomotive, has started to run, and the confidence of the entire industry has also increased. While he affirmed that Tencent has exerted its advantages and established a reputation in mobile game R&D and network operations with large overseas IP companies in the past, he also hoped that the team would be thorough and solid in R&D horizontally, “rather than competing with other games from a vertical perspective.” The company or hardware manufacturer is the enemy”, emphasizing that the team should focus on the main business.
A long-term believer in the gaming industry: “Find your main business and focus on it”
How to break the current situation and find a breakthrough, Tencent’s consistent approach is to be a long-termist in the gaming industry.
Objectively speaking, Tencent has been continuously thinking about game products and the development of the game industry, and has always had a clear map in hand.
For example, 4 years ago, Tencent Senior Vice President Ma Xiaoyi explained in an internal sharing event that gameplay, narrative, overseas, 3A, and platform games are the five major growth drivers of the current Chinese game industry. Today, 4 years later, Tencent’s self-developed platform game “Yuanmeng Star” is released.
In terms of content-based games, Riot Games is developing MMO, Tianmei is working on “Glory of Kings”, and for the second dimension, it is the overseas investment in the past two years, and NIKKE developer ShiftUP came out. Tencent will intervene in these in a way that it is more accustomed to. type.
You will find that Tencent maintains long-termism in doing things and does not stop at words.
With this understanding, looking back at Ma Huateng’s words, “We seem to have achieved nothing,” we can clearly understand the reason for Tencent’s self-effacement.
For a company of Tencent’s size, the key is not to find a direction. Do you want to do it? How to do it specifically? It’s about how to allocate resources when there are too many things to do.
Resources are divided into human and financial. Should more be allocated to short-term projects or more to long-term projects? Tencent’s main focus in 2023 is actually on long-term projects. The general environment has changed a lot in the past few years, but Tencent still has one thing that hasn’t stopped: investment.
For example, it spent 6 billion to buy land in Beijing, spent 10 billion to acquire 67% of Techland, the developer of the “Dying Light” and “Dead Island” series, and recently it was reported that it was in contact with Hasbro to discuss the acquisition of the well-known IP “Dungeons and Dragons” “wait.
When “Baldur’s Gate 3” won the TGA Game of the Year, we learned that Tencent had invested in the developer as early as 2018
Recently, it has gone head-to-head with the popular “Fantasy Beast Palu”, and it can also exceed one million sales and have 160,000 people online at the same time on Steam. The developer Keen Games has also previously obtained from Tencent and other investment institutions. $10 million investment.
You will reap what you sow. Tencent’s investments include successful manufacturers Riot Games and Larian, as well as failed projects such as “Avatar: Return to Pandora”.
In the past few years, Tencent has invested many of its resources overseas and invested in long-term large-scale projects. There are gains and losses, so Tencent is also making adjustments. At the beginning of this year, Tencent Games launched the “Spring Bamboo Shoots Plan” to mobilize internal projects for medium-sized game products. However, Game-Time needs to explain that the “Spring Bamboo Shoots Plan” is not as exaggerated as the outside world imagines. The investment intensity and how to promote it are still open to discussion.
Therefore, Ma Huateng will state that the company will go all out on the social base camp, encourage the team to maintain entrepreneurial spirit, and emphasize finding the main business and focusing on it, because “this has a better chance of winning.”
