On February 21, the share price of game companies plummeted. Although it was later confirmed to be an oolong, a major industry background is that the approval of game version number has been suspended for seven months. Only in terms of time, it is directly in line with the 8-month suspension period in 2018. During the seven months when the game version number hovered, some small game companies laid off or even shut down, while some large game companies accelerated the pace of going to sea.
Behind "Oolong": the version number is suspended for 7 months
On February 21, after the share price of Tencent holdings fell by 5.23% and the market value evaporated by about HK $250 billion. Zhang Jun, general manager of Public Relations Department of Tencent group, issued a wechat circle of friends to clarify that it was a "rumor". Zhang Jun said in his circle of friends: "in one afternoon, rumors have changed many versions".
On the same day, the release of the game version number will continue to be postponed until November, and even the distribution will be suspended in 2022. Although the rumor was refuted, behind the Oolong incident is that the approval of the game version number has been suspended for nearly seven months, and the update time of the game approval results of the State Press and publication administration has remained on July 22, 2021.
The reporter of Huaxia times learned from a number of game practitioners that since the Spring Festival in 2021, the adjustment requirements for many contents of the game industry have spread, such as continuing to strengthen the prevention of addiction, prohibiting money first, comparing consumption, and strictly supervising the themes of waste land, feminization of men, beauty and so on.
This is not the first time that the game version number was suspended. As early as 2018, the game version number was suspended for 8 months. The difference is that at that time, the official gave the reason that the issuance of all game version numbers was suspended due to the adjustment of the regulatory authorities.
Since then, the distribution of game version numbers has decreased. According to the statistics of gamelook, compared with 1405 game edition numbers issued in 2020, the total number of edition numbers in 2021 decreased by 46.26%, which is also the decline of the total number of edition numbers for four consecutive years from 2018.
Liao Xuhua, a senior analyst of Analysys cultural consumption industry, analyzed to the reporter of Huaxia times that "2018 is due to the adjustment of ministries and commissions, and this time it is due to the optimization of audit content and workflow. Relatively speaking, the reopening expectation of the former is relatively clear, and there is no accurate reopening expectation this time."
layoffs and closures
From August 2021 to now, the suspension of game version numbers to the game industry has had an impact no less than that in 2018. Game companies including Netease (09999. HK), Lilith and Perfect World Co.Ltd(002624) have either cut down some projects, adjusted relevant personnel, or directly laid off staff, and even closed down small and medium-sized game companies.
Perfect World Co.Ltd(002624) said at a recent investor meeting, "In 2021, the company streamlined and optimized the game team, reducing some teams that do not fit the company's future direction and tone. Hundreds of people have been optimized in the fourth quarter of 2021. Up to now, the company's R & D team has about 4000 people, and the optimization is still continuing, and the follow-up is likely to decline further. It is expected that this round of optimization will reduce hundreds to 1000 people, including Including R & D and related departments. "
In addition, according to the 2021 mobile Internet industry white paper released by Qimai data, by the end of 2021, the number of online game apps in China's app stores had reached 687000, a decrease of 20.8% over the same period last year. One of the reasons is that the resources of Chinese game titles are tight. In 2021, the State Press and Publication Administration released 712 mobile game titles, a decrease of 42.1% compared with last year.
According to the data provided by tianyancha, since July 22, 2021, China has added more than 55000 game related enterprises, and the number of newly registered enterprises has maintained a stable growth; However, in terms of the cancellation proportion of game related enterprises, about 2000 game related enterprises have been cancelled since July 22, 2021, of which enterprises with a registered capital of less than 1 million account for 3.16%.
Liao Xuhua told reporters, "the suspension of edition numbers will inevitably accelerate the reshuffle of the market. In fact, a large number of companies, regardless of size, are making business adjustments. It is not uncommon to cut projects and lay off staff."
Zhang Shule, a game industry analyst, is more optimistic. He analyzed to the reporter of Huaxia times that the suspension of the last round of edition numbers indirectly triggered a round of survival of the fittest for Chinese game companies, and made it a general trend for high-quality games and games to go to sea. Since then, the distribution of edition numbers has resumed, but the overall number is much less than that before the suspension. In addition to continuing the macro-control of the game industry, it is also stimulating the creativity and risk resistance of domestic game manufacturers. Therefore, although this round will continue to catalyze the survival of the fittest, it will not have an impact on the pattern of the game industry in essence.
acceleration at sea
There is no light in the East and light in the West. Under the suspension of Chinese version numbers and the pressure of strict supervision of Chinese game market, game companies are also accelerating to go to sea.
Take Ourpalm Co.Ltd(300315) as an example. Due to the impairment of goodwill, the net profit attributable to the shareholders of the listed company in Ourpalm Co.Ltd(300315) 2021 is expected to be - 1 billion yuan – - 1.4 billion yuan, compared with 317 million yuan in the same period of last year, from profit to loss. In response to market changes, Ourpalm Co.Ltd(300315) said that it would vigorously expand the overseas market and increase the overseas market share in the game business.
For game companies going to sea, some analysts of securities companies who do not want to be named told the Huaxia times that going to sea is the choice of most game companies in China. For small game companies, the concentration of China's game market is too high, and Tencent Netease accounts for about 80% of the market share. It is an inevitable choice to look for an incremental market overseas. "China's overall game environment is not very good. In 2021, many game supervision policies were issued, and the national level also encouraged games to go to sea, which is not limited by the version number." The analyst also said.
"Small and medium-sized companies that are really committed to high-quality games can also let their products compete in overseas markets, participate in global competition, jump out of China's saturated stock market, attack broader market space and look for new opportunities for development." Zhang Shule said.
According to the research report data of Guosheng securities, under the background of slower growth and stricter supervision of mobile game users in China, the number of game players going to sea has increased, and the scale and share of domestic mobile games have increased significantly. In 2021, the scale of China's self-developed mobile games to the sea was US $18 billion, with a year-on-year increase of 16.6%. In the first half of 2021, 23.4% of overseas TOP2000 mobile game publishers came from China, with a year-on-year increase of 3.6%.
Citic Securities Company Limited(600030) analyst Wang guanran believes that since 2021, the regulatory authorities have issued regulatory policies covering the protection of minors, game playing methods and contents, game approval, game publicity and other regulatory policies for China's game industry, and the distribution of version numbers is also suspended; At the same time, the policy side also emphasizes cultural self-confidence and encourages excellent cultural content to go to sea, and the game supply side is more willing to go to sea; From the demand side, the overseas mobile game market space is twice the size of China's mobile game market. Compared with the penetration rate of 70% of Chinese mobile game players, the penetration rate of mobile game players in major European and American markets in 2021 was only about 40-50%. There is still great room to improve the penetration rate and payment of overseas mobile games, and the penetration space of overseas game demand side is broad.
