Genshin Impact was one of the biggest hits of 2020 and is on its way to becoming a billion dollar game.

The title reflects the evolution of Chinese game development and showed that Chinese developed games based on original IP can truly succeed on the global stage.

Quick thread- Image
To aid this thread I will use some slides from a presentation that Liu Wei, one of the co-founders of MiHoYo, gave at the end of last year.

MiHoYo, the developer of Genshin Impact, was founded in Shanghai back in 2011 by 3 college students. The 3 were fans of ACG culture. Image
What's notable about MiHoYo is that they have been independent since 2011, with their only funding being a $150k angel investment during the firms first year

Their slogan 'Tech Otaku's Save the World' is based on them being Otaku's themselves and creating games in the ACG genre
The company started out making 2D games for mobile with an ACG theme. Its first game was called Fly Me 2 the Moon and was released in 2011. It was essentially a side scrolling game with very basic controls, but as per their slogan, was deeply rooted in ACG culture. Image
In 2014 they released Gun GirlZ.

It maintained the ACG elements, the 2D art and the side scrolling elements from its previous games while adding RPG mechanics and a more in depth story.

When the game released, MiHoYo had just 7 employees. It was their first major hit. Image
The success of the game allowed them to grow and work on a new title that combined all of the above into an action RPG in a 3D world with high end graphics.

Honkai Impact 3rd was an even bigger success for the company and showed how the firm was able to continually innovate. Image
MiHoYo had gone from a small start up in 2011 to operating a high quality mobile game in 2016 with Honkai Impact 3rd.

The team, which had grown considerably by this point, was able to build on each of its games to achieve something new and exciting with each new title. Image
With Genshin Impact the team was striving to go even further and create a true open world RPG to bring a console quality game to mobile users.

A team of 400+ worked over 40+ months on a budget over $100 million to complete the game. Eventually eleasing on Mobile, PC and Console. Image
The genius of Genshin Impact is that the game feels and plays like a premium console game while ultimately being a free to play gacha title

It not only appeals to its existing user base in China, but also intrigues players overseas and meets them on the platform of their choice
MiHoYo was able to create a game that was accessible, yet extremely deep in terms of content.

It created an immersive world and story that was realised through high end production.

The most impressive part was that they were able to scale the experience across multiple devices. Image
Genshin Impact lets people play at their own pace, explore the world and story, and introduces monetisation much later into the game than one would expect.

Genshin builds on MiHoYo's philosophy of 'Paying for Love' which it has held since the early days.

This has two parts:
1. Paying for love is not about paying for a story DLC or a stats boost. It's about the desires of the player and paying for the character that best represents them

2. It's also about being able to experience the game for what it is and paying because you enjoy the experience
It's this philosophy that shapes the monetisation aspect of Genshin Impact and why it has been so successful.

The days with the highest revenue have been when new characters have released or during special character banner events. E.g. Dec 1 with ZhongLi release.
MiHoYo has a good formula for success with Genshin Impact, as the past few months have shown. MiHoYo’s challenge has been to release a steady flow of content to keep players engaged over the long term.

Despite some bumps in the road, the company is succeeding overall.
Developers around the world should be looking to Genshin Impact and learning lessons from its success.

It shows how traditional AAA experiences can evolve with a F2P model and it shows how mobile first titles can scale across multiple platforms.
Genshin Impact’s global success also reflects how Chinese game development has evolved, from outsourced artwork 15 years ago to full game development for the domestic market more recently, and now to developing games that resonate with global markets as well as the home front.

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More from @ZhugeEX

11 Jan
I was quoted in this @SCMPTech article about how Tencent invested in or acquired 31 video game related companies in 2020 and why this is 3x higher than the prior year.

I've put together a thread below with some additional thoughts too.

scmp.com/tech/big-tech/…
Tencent’s approach to M&A can be characterized as somewhat conservative, investing primarily in firms that have a proven hit.

Tencent historically has invested in roughly a dozen companies each year, and obviously there are many more investment opportunities than that.
As Tencent faces increasing competition in the market, primarily from large tech firms such as Bytedance and Alibaba in addition to mid size firms such as Lilith and MiHoYo, the company appears to be taking a less conservative approach to M&A.
Read 6 tweets
5 Jan
Nintendo has acquired Next Level Games. Nintendo is extremely conservative when it comes to M&A with its last major acquisition being Monolith Soft in 2007.

So why did Nintendo acquire Next Level Games (NLG) now and what does it mean for both companies? Quick thread below:
NLG has been a key partner for Nintendo since 2005 when it first worked on Super Mario Strikers.

It has been working exclusively with Nintendo since 2011 and its recent release, Luigi's Mansion 3, has sold over 8m units and is on track to outsell the prior 2 games combined.
NLG has helped increase the value of Nintendo's IP and it's clear the developer can produce multi-million selling hits.

What changed recently is that the owners of NLG were looking to sell their shares in the company and began talking to potential buyers.
Read 8 tweets
4 Jan
Ok. Let's talk about the 996 work schedule in the Chinese games industry.

For those unaware, the 996 work schedule involves working from 9am to 9pm for six days a week, or 72 hours a week put another way.

Here is an article on it + thread below:

theguardian.com/world/2019/apr…
996 work culture is not a new phenomenon in China, neither is it an exact template for every games company, but it is the common phrase given to tech / games companies that demand employees work overtime to complete projects.

It is not too dissimilar to 'crunch' used in the West
The practice has been endorsed by a number of tech CEO's, most famously Alibaba founder Jack Ma

This work culture has become an accepted part of working at a tech / games firm in China (exacerbated by Gaas), even though it is technically illegal according to Chinese labor laws
Read 11 tweets
8 Dec 20
Chinese game and tech giant Tencent has invested in more than 20 game developers this year

While the company has mostly focused on mobile games in recent years, some of these new investments show that Tencent is also interested in the PC and Console space.

Let's discuss 1/
2/ Tencent recently invested several hundred million RMB in Wizard Games, a Chinese developer known for Battle Teams, a game with 500m users.

The company is creating Battle Teams 2, a high end competitive shooter for PC that is set to release in 2021.

gamespress.com/Wizard-Games-S…
3/ Tencent also took a 20% stake in Wangyuan Shengtang, a Chinese game company founded in 2009

The team is most well known for the Gujian franchise, with its latest release being Gujian 3 for PC. The RPG based on Chinese fantasy sold over 1.5m.

pcgamer.com/uk/gujian-3-co…
Read 15 tweets
5 Dec 20
The Monster Hunter movie has been pulled from theatres in China just 1 day after it released

This happened after strong backlash on social media over a scene that is considered offensive (below). It is unclear if the movie will return

Here is a thread to explain the situation:
Firstly I want to preface this by saying: if your immediate response is "That's not offensive" or "stop being sensitive" then I'm just going to block you.

If you're not Chinese then it's not really your place to decide what is / isn't offensive to people in China.
There are 4 key points to discuss in order to understand this situation.

1. The 10 second scene in the first tweet
2. The link to an old racist rhyme / phrase
3. The way the movie was subtitled during this part
4. Social media backlash and review bombing

我们开始吧
Read 15 tweets
4 Dec 20
Great writing in the Monster Hunter movie...
Anyway, this is going down about as well as you'd expect in China where it's being linked to the rhyme / phrase "Chinese, Japanese, dirty knees - look at these?" which is considered offensive.
Capcom has issued a statement on social media due to the backlash, stating that it is aware of the situation and the controversy. That it is not the producer on the MH movie and that it will report the situation to the relevant film companies to investigate.
Read 8 tweets

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