The smell of gun smoke in the gaming industry has become stronger.
In the middle of last year, the game investment market was hot. According to the statistics of Putao Jun, there will be at least 103 investment and financing cases (including proposed investment cases) for domestic game-related companies in 2020, with a single amount ranging from several million to more than one billion.
Capital movements in the circle are frequent. Among them, Tencent invested the most with 26 companies in total. Station B and IGG invested 9 companies each, and the three companies accounted for half of the cases in the whole year. In addition, NetEase, Xindong, China Mobile Games, and Sanqi have all tried their best and invested in several companies each. It is worth noting that these data are not complete. For example, we also learned that IGG invested a total of more than a dozen domestic game companies through different entities last year.
Capital outside the circle is also looking for opportunities. The three Internet companies of Byte, Kuaishou, and Alibaba all sell domestic game companies, and companies similar to Mingchen Health are trying to cross-border into the game field at a premium of 10 times. At the same time, there are nearly 20 capital companies participating in the investment.
Obviously, everyone is eyeing the big cake of the game, but this is just a prelude to the wave.
In 2020, Tencent’s investment actions are very radical. For potential teams, do not have the right to speak, shorten the process, and only wait for the CP to sign. This also reflects the change in Tencent’s investment thinking, and this change is also putting pressure on its peers.
Like Tencent, after the epidemic eased last year, wealthy game companies in the circle were basically grabbing products. Starting from the second half of the year, the finalized cases were gradually exposed. Including the delay from negotiation to finalization, the phenomenon of a surge in investment cases at the end of the year has continued until the beginning of this year.
The radicalization of capital is not difficult to understand. “If you don’t hurry up at this time, the next opportunity may be gone.” An investor from a large traditional factory told me that some popular tracks are no longer able to grab the product: “As long as it is a slightly formed product, some only have art. The concept has basically been seen by insiders.”
Hot money everywhere seems to herald the golden age of research and development: the times are moving closer to products, capital is moving closer to research and development, the market and users are moving closer to quality, and independent products are emerging one after another.
Is the reality so ideal? Over the past six months, Gaming Grapes has communicated with developers, large and small, and what they see is more of an uneasy mood, anxious to spend money, but the product can’t keep up.
Today, the entire industry is eager to change, but products require time, talent, capital and space. A producer of a medium-sized project of a large R&D factory in a certain line said that the more they work, the more they feel that the space left for them is becoming less: “The cost is not uncompetitive, and the cost is too high and no one dares to make it. In the end, the road is getting narrower and narrower.”
So, whose golden age is this?
Head R&D: A Game of Opportunity
In 2020, the pressure on head R&D may be greater than in any previous year, and the reason is “Original God”.
Before the advent of this game, there was no mobile game in the domestic market that was willing and daring to invest a huge cost of 100 million U.S. dollars, and “Original God” broke this ceiling and directly pulled the competition step to a new height. So starting last year, head R&D began to further increase product R&D investment.
The giants first raised the bottom line of costs. For example, Tencent’s slightly more important projects have a basic cost of about 300 to 500 million. In addition to the giants, many R&D companies that have the strength to compete in the head market have also raised the cost line of key projects to 200 million. It is conservatively estimated that there are at least 10 research projects in the market that reach this cost level.
The competition in the head R&D is a competition of real money. There is not much room for trickery and opportunity theory. Because the space for innovation in the game industry is already very small, the chance of a new gameplay appearing may be one in a thousand, and disruptive explosions like “PUBG” are even more unattainable.
As far as the top market is concerned, only when the costs are piled up can it be possible to catch up when the next opportunity comes. If the cost is not raised, it may not even be eligible for competition. Once the cost rises, all projects will encounter similar problems with the original God, that is, efficiency barriers. As a result, the manufacturers that are catching up with the head wave have placed industrialization in the most important position.
Tencent’s pursuit of industrialization in recent years is obvious. Ma Xiaoyi also mentioned that the barriers to industrialization capabilities do not lie in the amount of labor costs, but in how to greatly improve efficiency and quality through the cooperation of tools, systems, and assembly lines, so as to achieve the effect of large-scale realization.
A listed R&D company in Shanghai has studied the technology competition of giants during the transformation process: “It is also UE4 that makes products. For example, the screen of Tencent’s “Stimulating Battlefield” certainly looks much worse than “Black Myth”, but it is actually done at the bottom of the engine. After a huge amount of changes, it may cost 2 gigabytes of memory to run on the phone if you don’t change it. After adjustments by various means, it may only use 500M of memory. This is a very powerful thing.”
It is not only Tencent that has also achieved industrialization results. In the Clubhouse at the beginning of the month, Ma Xiaoyi once lamented the shock that the energy of the Shanghai gaming circle brought him. In his eyes, the current Shanghai circle is very similar to Riot in the eyes of Tencent in 2010, and it is sweeping the limited market. Ministry of talent. “Yuan Shen” used as a PC and a host to make a mobile game, which is a kind of dimensionality reduction attack, and he hopes that Tencent’s industrialization ability can be upgraded to the level of a global manufacturer to resist this dimensionality reduction attack.
It can be seen that whether it is for Tencent, Shanghai, or other research and development that can impact the market head, this industrialized competition will surely become a tug of war between them for many years, and will become fierce every time a head opportunity comes. Clash.
First-line R&D: Find a way out
The dynamics of top manufacturers often deeply affect first-tier manufacturers in the same camp. Judging from the changes in the past one to two years, more and more first-line research and development have begun to try self-research and spontaneous development, trying to control the product in their own hands.
The first dilemma is that traditional methodologies have begun to fail. “The biggest pain point in the past was that you were making games for giants, not for users.” An employee of a large R&D factory in the north believes that this will cause them to be unable to make accurate predictions on the market and lose their judgment on products in the long term. , Can only bet on the eyes of the giants.
An employee of a traditional R&D company that cooperates with a giant feels that they become more and more confused: “In internal meetings, the other party will pass if they are OK, and if they are not OK, they will overthrow and start again.” And the head of an established R&D company in Shanghai once worked with a head company. The dispute arose because of differences in the judgment of the gameplay. In the end, this research and development compromised, but the product market performance was still not as expected, which dealt a huge blow to the team.
However, in recent years, many products with differentiated play styles have appeared in China, such as “The Strongest Snail” and “Hundred Scenes of the South of the Yangtze River”, which seems to indicate that R&D also has the right to speak and operate. In addition, opportunities in overseas markets have also allowed more first-line R&D to see benefits.
A certain product that was issued by a giant in China but couldn’t stop its downward trend after two months of launching. When trying to sell in the European and American markets, a monthly turnover target of 500,000 US dollars was set, and it quickly reached 3 million. There are also products like “Dragon Fantasy”, which exceeded 6 million US dollars in the first month in Europe and the United States, and seem to be even stronger than domestic products.
“I went out to fight with five-star full-level equipment, and I will definitely win, because other distributions are all fighting with white outfits, and I feel very sorry for them.” A practitioner who has been deeply involved in overseas feels that now domestic first-line products are overseas. Crushing: “The cost of an A in Europe and America for “Dragon Fantasy” was once as low as that of a casual game.”
So many front-line R&D companies have begun to find new opportunities on their own, but they inevitably encounter a second dilemma: how to cut into a new track.
Outside of the giant system, currently there are not many tracks that can be played on the market. Popular ones such as the two-dimensional and female-oriented, but for the first-line manufacturers who are accustomed to traditional categories, these categories are too difficult to make. Have a team that understands enough, or find enough talented people. As a result, there is a competition for resources among the first-tier manufacturers to enter the new track.
At present, in the two-dimensional and female to the track, new projects with more than 50 million yuan have been common. However, a single project budget for more front-line R&D can start as high as 80 million or even over 100 million.
Some developers have directly opened multiple product lines, with different layouts of new tracks, and each product is running at the billions of dollars. A first-line R&D investor who is working hard to build a vertical track told me that they just want a ticket to enter the young market: “Other manufacturers have already got it. We can’t live without tickets.”
What is even more exaggerated is that for the core talents, these developers will not be stingy with big prices. For example, there were rumors last year that Yonghang’s new project “White Night Aurora” hired a major American touring dog in the two-dimensional field with an annual salary of tens of millions. For a time, regardless of the cost, the talent, or the product presentation The quality of the art that comes out is envious of various manufacturers in the circle.
This resource comparison not only affects some vertical tracks, but also puts pressure on more traditional first-line developers.
A R&D firm in Shanghai who is good at traditional play has a new project development cost of 100 million yuan this year, and the purchase cost will add another 200 million yuan. A purchasing company in South China invested more than 1 billion yuan in research and development with all its assets last year: “If you don’t change positions, the whole army will be wiped out. Only when you change positions will there be a ray of life.”
To some extent, the behavior of the first-line manufacturers seems to have reached a consensus: the war on the head has started, and there is not much time left for the front-line.
Small and medium research and development: Survive through the cracks
Faced with the proposition of “R&D”, the most difficult task is undoubtedly the small and medium-sized teams. In the tide of transformation, they were the first group to be crushed by the head arms race, and the first group to be most impacted by the emerging innovation team at the bottom.
The biggest crisis facing small and medium R&D is that the traditional market seems to be about to change.
An veteran producer in the terminal game has a deep understanding of this: “Products with a cost of less than 20 million yuan are difficult to be competitive in the market, and when it exceeds 40 million, few people dare to release such products. “
In fact, this account is easy to calculate. For distribution, on a more traditional track, the R&D cost of 40 million is a red line. “If you include the plate money and market budget, you may have to invest 1 to 2 times the cost of research and development, which is a total scale of 80 million to 100 million. In today’s world, this is not a fund that can be handed out easily. “
No matter how the intermediate risks are allocated, when the total cost rises to the level of first-line products, you must always consider more realistic questions: why not do it yourself? If you find someone to do it, how can you recover these costs?
If it is pushed to the mass market, under such pressure, it is difficult to avoid collisions with first-line products. At this time, the hard power of the users and the sales methods are used. The competition is undoubtedly cruel. The CEO of a medium-sized self-research company in Beijing sighed: “The year before last I was shocked when I heard more than 200 AAs. It was over 200 exaggerated, but last year it (increased to) 400.”
And the second difficulty is that small and medium-sized R&D basically cannot keep up with the transformation speed of head and front-line R&D. There are many reasons for not keeping up, which may be technology, ideas, and accumulation.
In the past few months, I have repeatedly heard inquiries from different teams. Is it okay to transfer to a certain field? But in the end, after understanding the details of the team, they often come to the conclusion that the risk is great. Just like the industrialization and technological transformation that big factories have talked about in recent years. These vocabulary and concepts sound very wonderful, but to implement them, it is not easy for large companies, and even more difficult for small and medium-sized R&D teams.
Zhihu asked “Will the gap in game development technology be further widened?” “To some extent, it points out the current technical barriers: “The gap between developers and the underlying technology is getting wider and wider, and even commercial engines can be directly open sourced and they are not afraid of being copied by you, because you are increasingly unable to take away the knowledge inside. For example, for some Shading formulas, although the code in the engine is about a hundred lines, there are dozens of papers behind it!”
Some companies that are accustomed to traditional products can hardly change their thinking quickly. The boss of a purchasing company in South China used to spend tens of millions on R&D, but found a R&D company with a best-selling product, learned from their experience, and cut off the R&D team when he came back: “I see myself clearly. It turns out that this is what people did. We definitely can’t do research and development.”
And some accumulation, even if you can see it, you can’t learn it. A two-dimensional head developer thinks: “Chinese mobile games are indeed doing very well in the direction of technical art, but they have been in the stage of catching up with overseas and learning other people’s Paper.” Another company has done research and development of millions of sales products in China. Shang also felt: “At present, only European and American 3A-style, more certain production pipelines can be learned in China, and the real NB is the Japanese producer-centric R&D model.”
A medium-sized team digging deep into the subject matter of the two-dimensional subdivision once went to Japan to investigate the research and development process of the same category of quasi-first-line products, hoping to learn from the experience, and lamented that “the accumulation of at least five years, or even ten years, is still short of it” after returning. Money can’t fill the gap.
Even more difficult is that even if the small and medium-sized R&D transformation is successful, the doors of some vertical tracks are gradually closing.
In the eyes of the producers of a two-dimensional 3D card game, the market has become too fast: “In 2018, there was a vague feeling that the industry may soon enter an arms race, but I didn’t expect it to come. Fast. Back then, there were mostly 2D cards. Now 3D battles or special gameplay have become the barriers to entry. This arms race will be polarized within a year.”
“Previous verticals are now pan-types. In the future, the core users of masterpieces will eat them and pan-users will also accept them. I used to think that the inner sea was Tencent Netease, and there were big fish and small fishes and jellyfish in the outer sea. The method of living; now there are kuns in the open sea. The sea is so big. Kun has eaten up resources, research and development talents, funds, and users. How can the remaining creatures live?”
Looking back now, even if it is a vertical product, we must deal with the impact of large capital and large products. “The most terrible thing is, if you don’t want to be a kunfish, but just want to be a jellyfish, what should you do? In the past, the small jellyfish didn’t want to be eaten, and sinking into the deep sea to survive, but now you have to become a big jellyfish, and there is something left There is not much time and space, what should I do?”
In addition, the problem that can give the small and medium-sized team a fatal blow is the reduction of talents and the increase of costs.
To make games that can be played, the top manufacturers and first-line manufacturers can use a simple and rude way: spend money. One is not enough to recruit ten, and the unit price cannot be digged, so you will spend a higher unit price to dig. The head and front-line R&D have too high a say in attracting and releasing outstanding talents. A few years ago, there were not many 100-person teams in the industry. Today, the head team has 300 people at every turn, or even thousands of people.
The recent “involution” in the Shanghai area is actually the “involution” of talents. Because in addition to pure income, the benefits and endorsements of each company are also key cards for attracting talents. Therefore, during the epidemic, many companies in Shanghai rushed to announce their own New Year benefits for staying in Shanghai, so as to show off their muscles and increase their own talent density.
But small and medium-sized research and development have no money, and apart from the products on hand, there is no muscle to show off. This kind of competition is very painful for them.
A company that has done the research and development of a popular casual game has spent 40,000 to 50,000 recruits for new planning, but not only has there been little output in the past few months, the planning’s awareness of the game has not fallen into the “creation”, but blindly. Refer to other products. For those who are not short of money, 40,000 to 50,000 yuan is not painful, but the CEO of this research and development company mentioned the pain point: “If the industry only recruits such talents, how can small companies live?”
Therefore, small and medium-sized teams must plan their lives carefully. For example, a 30-person team that makes an independent game, including five insurances, one housing fund, and rent, can cost nearly 1 million a month on average, and the pure labor cost for a year can reach 10 million excluding outsourcing. If innovation is difficult to produce for two or three years, the cost may soar to 30 million. Even if you switch to a 10-person team, you have to plan for the worst possible cost.
And many independent teams who have made successful products feel that it is too early to talk about the times. The producer of “Shadow Torch City” told me: “It’s still far from the time when a single plane takes off, so you have to do things with the intention that everything may go wrong.”
In the previous article, we also mentioned that the more successful the product, the more complete the experience of stand-alone games and independent game development, the more people who feel that “small teams can easily make independent explosions. In fact, It’s an illusion.”
The small and medium-sized team under this kind of pressure is like a group of faces pulled apart at both ends, hanging in the middle seems to break at any time.
Has China’s game development stalled?
In the past year, the general environment of the domestic game industry has given people a sense of tension that “you must rush forward quickly to be at ease.” This emotion may be related to the ceiling that is about to be touched.
“Chinese mobile games are sprinting too fast, and they are about to lose their reference.” A friend who has been in the industry for nearly 20 years sighed: “In the past, the reference for domestic games was overseas, consoles, and masterpieces. But then, we will soon It will lose its reference target. China is a big manufacturing country, not a creative country. Once it loses its reference, it is easy to get lost. No matter how much money it has, it will not find a target.”
A former employee of a giant told me that they used to spend huge internal costs to innovate. However, new projects have been cut down continuously over the year, a lot of costs have been wiped out, and there is still no result. The team is not without talents. On the contrary, the density of talents is very high. The reason is, “I still pursue efficiency and Massive Market too much. This is contradictory to innovation.”
Innovation requires patience. A certain medium-sized research and development company once made a successful product with a monthly turnover of more than 100 million, which was well received by players, but when doing the second game of the same category, the problem came: “It is too difficult to innovate a complex mechanism. If you don’t do it, players will feel that you’re changing your skin, but doing innovation is very costly.” The price they pay is a direct doubling of the cost and an “extremely painful” trial and error process.
To make a good product that can withstand the next era, this kind of patience is even more necessary. “Objectively speaking, in all industries in China, the field of design is in its infancy. Every city’s architecture, every store’s decoration, why should we use such a style, why should we use such lights, and why should we use these? Furniture, behind this is the problem of design. The word design itself is the most fundamental foundation of all our content industries, and this foundation does not form a general education in China.” The production of a major DAU product People believe that this is also a hidden danger caused by the industry’s blind profit-seeking.
And before discussing innovation, we still have a topic that we can’t avoid: people.
In today’s market, most of the teams that have been able to continue to fail and focus on innovation are people who do not worry about survival. For example, before the release of “Black Myth”, Game Science also made a lot of money-making products, not to mention the investment in hero mutual entertainment. The producer of “Animal Party”, Zixiong, confessed to us that his least worry about money is money, and Tencent is their latest round of investors.
Apart from them, what about the vast majority of people in this industry? Let us look at a few sets of data. According to the resident asset allocation statistics by CICC, more than 60% of the assets of Chinese residents in 2019 are occupied by above-ground buildings.
According to China Merchants Bank and Bain’s statistics on the allocation of Chinese personal investable assets, the increase in cash and deposits of Chinese residents from 2018 to 2019 only increased by 6% from 2016 to 2018, the lowest in 10 years.
According to the information disclosed in the prospectus of Ant Technology, the five types of wealth management products in China’s personal investable assets accounted for 61% at the end of 2019, and there will be a certain degree of growth in the future.
These data reflect that the goal of most of us is still to earn money, buy a house, still work for survival, and have great concerns about risks, as well as great fears about the future. For the game industry based on talent competition, abandoning short-term benefits and pursuing innovation, design, aesthetics, and quality, it is necessary to overcome a lot of human inertia and cross many thresholds.
The topic of current game research and development is, to a certain extent, worrying about livelihoods while catering to the dilemma of rapid market transformation while raising aesthetic standards.
Head R&D is making great efforts to improve production efficiency, and strive not to miss any opportunities in the next big market; front-line R&D is seeking to walk on multiple legs, and does not want to fall behind in the industry transformation; while small and medium-sized R&D needs to intensify In the Matthew effect, found a place to survive in the “involved” talent whirlpool.
In this era, no matter whether it is head R&D such as Tencent NetEase, Mihayu Lilith, or the first-line major manufacturers such as Perfect Zulong Shengqu, or more small and medium-sized teams, no one dares to slow down. Although there are more hot money at the moment, how many problems can be solved is still an unknown with extremely high uncertainty.
Looking back, is it really the golden age of research and development?
Source: Game Grapes