Event:
On April 8, 2022, the release of game edition numbers was officially and gradually resumed. On April 11, the State Press and Publication Administration officially announced 45 approved game edition numbers, which was lower than that in July 2021, indicating that the approval standard of game edition numbers will be more strict, refined and high-quality.
Key investment points:
Frequent policies to optimize the game market, optimistic about the long-term healthy and sustainable development of the industry. The duration of the suspension of the game version number is 263 days, which is 2 days shorter than that in 2018. The latter regulation is mainly due to the prevalence of the concept of emphasizing quantity and neglecting quality in the game industry, and a large number of shoddy skin changing games have disturbed the normal order of the overall market; This time, the release of the game version number was suspended or in line with the implementation of the “game addiction prevention” policy, strictly limiting the time that game manufacturers provide online games to minors. At the same time, relevant departments jointly with game enterprises removed a number of game products such as “skin changing, three incorrect views, copy number and no version number”, strengthened the review of version number and greening the youth’s network environment. We believe that the suspension of these two editions is a comprehensive purification of the whole game market under the leadership of policies, such as the promulgation of a number of policies such as the specification of game content audit process and the notice on preventing minors from indulging in online games, strengthening the supervision of the industry, which is conducive to the new tourism to move forward on the road of high-quality and high-quality products, and promoting the long-term healthy and sustainable development of the whole industry.
This release of edition number has a rich category, and some products are highly expected. There are 45 game versions restored this time, including exciting “party star”, Xishanju’s “origin of sword net 3”, Lilith’s “life party”, thunder game ( G-Bits Network Technology(Xiamen)Co.Ltd(603444) ) “tower Hunter”, “dream Voyage” of Wuhu 37 Interactive Entertainment Network Technology Group Co.Ltd(002555) , etc. Among them, the original name of “party star” was “flash party”. This platform fighting game was launched in Japan on February 17 this year and topped the local IOS free game list for 12 days. At present, it is still at the top 5 of the free list.
The Chinese game market will continue to be active. Due to the limitation of edition number, most Chinese manufacturers will focus on the overseas market, resulting in the gradual intensification of overseas market competition and serious market congestion. The re issuance of edition number will urge Chinese manufacturers to turn their attention back to China again, inject fresh vitality into the existing invariable game market, the fierce stock competition of Chinese Games will be relatively relieved, and the pressure of overseas market will be released to a certain extent. We believe that although the resumption of edition numbers will stimulate the recovery of China’s game market, there is still uncertainty about the future distribution of Chinese edition numbers. Chinese manufacturers will continue to expand overseas markets to ensure the overall operation of the company. How to reasonably allocate the layout of game resources at home and abroad will be the focus of Chinese game manufacturers.
Investment suggestion: comply with the strict regulatory environment of the policy, promote the healthy development of the industry, and restore the version number, which is good for the valuation and repair of the game sector. Policies guide the long-term and healthy development of the whole industry. Game addiction prevention, juvenile protection and game going to sea will be the focus of the industry in the future. The resumption of the edition number is conducive to easing the market pessimism, improving the valuation repair of the overall sector, and the prosperity of the game industry is expected to pick up. With the reissue of the version number, the number of new online games will be restored to a certain extent. It is recommended to pay attention to the rich reserves of the version number
Risk factors: stricter regulatory policies, less than expected version number landing, less than expected launch and performance of Xinyou, less than expected running water of Xinyou, increased risk of sea business, repeated epidemic risk and goodwill impairment risk.
