Jack Ma Just Ate His Own Words

8 min read 

He Swore ‘Never Do Games Business’ While Now Enter Game Industry in High Profile

In June 2010, when talking to the then Chinese Premier Wen Jiabao, Alibaba Chairman Jack Ma said, “we firmly believe games couldn’t change China. China pursues single-child policy. If children play games all the time, what will our country be like in the future? So, we don’t invest the game industry, not even a penny. If others invest it, we support them but we won’t do it, which is one of our principles.” Ma also publicly said he would “rather starve to death than do game industry”.

However, on September 26, Alibaba Entertainment acquired EJOY, which was founded by former Netease COO Zhan Zhonghui and others. Meanwhile, Alibaba established the game business division and made a high profile in entering the game industry. It seems Jack Ma who claimed ‘he would never do game businesses’ ate his words once again.

Remember Alibaba’s “one billion outlook” for game IP in March of this year? Now, the competition between the Tencent game and Netease games is becoming more and more intense, and the game industry pattern is obviously stratified. Alibaba finally couldn’t wait anymore and accelerate its ‘wild outlook’ in the game field.

On the afternoon of September 26, Alibaba Entertainment announced the establishment of the game business group with platform business division and interactive entertainment division. Also, it declared Alibaba had wholly acquired EJOY, was founded by former Netease COO Zhan Zhonghui and others. The core members are the “veterans” creating many well-known games, such as World of Warcraft and StarCraft II.

At that period, Netease game just launched MOBA mobile game called Battle in Pinganjing, combining features of classic mobile game Onmyoji. The game aims to confront Tencent’s popular mobile MOBA game, The King of Glory and now is currently in initial test. While Alibaba ‘hunted’ Netease’s former core figure Zhan Zhonghui. It is another move Alibaba made after the beginning of this year when “Alibaba invested one billion RMB in developing game IP ecology and has the willing to accelerate Alibaba’s development in game industry so as to improve the cultural industry chain IP development and commercialization ability”.

At first glance, in next period, as the test of Battle for Pinganjing had officially launched, which is the product of Netease Game’s “strategic” access to MOBA competitive mobile game, and due to Alibaba Game’s immediate layout, the mobile game market will become particularly boisterous.

According to 2017 H1 financial report, Tencent ranked first with 46.6 billion yuan followed by Netease Game, whose revenue was 20.165 billion yuan. While the third has an obvious gap with the first two, the revenue of Perfect World was only 3.07 billion yuan. It’s been some time since the Tencent and Netease strived for ‘hegemony’ in the game domain, and will Alibaba’s entering change existing situation?

Netease launched Battle for Pinganjing game

Netease launched Battle for Pinganjing!

“Isn’t it the MOBA version of Onmyoji?” “We can finally play MOBA mobile game without primary school students.” Netizens reacted strongly during the first test of Battle for Pinganjing!

In May this year, on 520 Love for Game Day, Netease Game held a patent authorization ceremony with an early classic MOBA mobile game named Fight for Freedom. Double round competition is an original operating system developed by Fight for Freedom team. This mode helped many current popular MOBA games transit from classic end to mobile end.

There was speculation in the media that the completion of the patent licensing would be likely to generate more popular mobile games like Fight for Freedom.

As expected, not long ago, Netease exposed the strategic project Onmyoji MOBA, which was renamed as Battle for Pinganjing. Industry refers the game as Onmyoji version of the King of Glory and thinks this is the product Netease Game produced to confront with Tencent MOBA mobile game, the King of Glory, after Netease Onmyoji gradually stepping into fatigue period of RPG.

However, the test content shows it may not be the case. Battle for Pinganjing has familiar Onmyoji features. And the 23 heroes setting lets players no longer need to pay to play their favorite characters.

Similar setting of large and small dragons is replaced by Yamata no Orochi and Shiju in classic copy tasks. According to feedback from players, they are quite satisfied with settings whether Onmyoji figures or skills and scenes. “Battle for Pinganjing” has strong “Onmyoji” features and style, but it doesn’t seem to be plagiarism at all.

Although the two are RPG and MOBA respectively with different types, Netease Game injected Onmyoji culture in the King of Glory.

Competition between Tencent Game and Netease Game

King of Glory by Tencent Game

Statistics show in Q2 2017, revenue of Tencent network game was 23.861 billion yuan, up by 39% year on year. And its mobile game revenue was about 14.8 billion yuan, up by 54% year on year, which was also for the first time mobile game end had more revenue than PC end.

And earlier this year, Tencent Q1 mobile game revenue was 12.9 billion yuan, which means that in H1 this year, Tencent mobile game revenue reached 27.761 billion yuan, up by 55.9% year on year.

As for Netease, the dominant leading status of Onmyoji RPG mobile game has not changed, but inevitably, Onmyoji is gradually stepping into the fatigue period of the RPG mobile game. In Q2 2017, its revenue was 9.43 billion yuan, up by 46.5% year on year while down by 12.15 % than Q1. It is clear that the market trend of Netease Game is gradually entering contraction phase. It has not been able to sustain the revenue and even declined after exceeding 10 billion for the first time in Q1 this year.

Onmyoji and the King of Glory, an RPG and MOBA, are not exactly one route and have different marketing ways. It seems to be incomparable but Battle for Pinganjing is the orthodox MOBA in mobile game. Viewing from its former name Code MOBA, its intention to compete with the King of Glory is quite clear.

Onmyoji walks on IP route. Find an IP radiation center, interact with comics and TV series and other products to further develop this IP. This radiation center is definitely Onmyoji. From working with CKF Pictures and Huayi Brothers Media Group to make Onmyoji movies and TV dramas to offline marketing like cherry season, leaving aside how long the life cycle of RPG mobile game could be, Netease Game develop Onmyoji IP in long-term and sustainable way.

Netease, in fact, in recent years, has spared no effort in supporting its games to “feed IP through IP” and encouraging them to jump out of the game circle and to publicize the culture to more audience. Besides, from the strategic development of mobile game Battle for Pinganjing, the connection between the game and game IP has undoubtedly helped Netease Games to explore another market.

As for the King of Glory, the number of its registered users exceeds 200 million, which is largest in the world among MOBA games. It was realized when the overseas edition of the King of Glory official landed on Nintendo Switch and carried out more in-depth strategy of “going abroad”.

Indeed, for competitive mobile game like the King of Glory, just like the development process of League of Legend, globalization strategy after expanding to overseas market is most urgent for its current phase. Nintendo, on the other hand, which is recognized as “high reputation” product in the host game markets around the world, has Super Mario and other classic IP products. This time The King of Glory’ landing Nintendo in the name of the Arena of Valor will no doubt lay a foundation to raise its overseas market awareness.

Will Alibaba’s entering change the industrial landscape?

Onmyoji by Netease Game

Thanks to the driving force of the King of Glory and Onmyoji, the market has taken on an obvious pattern of “two supremacy”. If no dark horse appears in mobile game, then for a long time, perhaps it will still be the war between Netease and Tencent.

According to industry data, China’s online game market exceeded 160 billion yuan in 2016 and is expected to exceed 200 billion yuan in 2017. Compared with Netease and Tencent’s tit-for-tat all the way, Alibaba Game is hardly known by outsiders. And the legendary figure Alibaba ‘hunted’ from Netease accelerates Alibaba’s layout in the game industry layout. Is Alibaba interested taking a share in more and more prosperous mobile game market?

From the layout has been made by domestic game companies in the last two years, the internationalization strategy has become the target of “overwhelming majority”, and this trend has brighter figures. In H1 2017 alone, the revenue of domestic gaming companies in 25 countries or regions outside mainland China was 2.3 times higher than that in last year, according to data.

As for Alibaba’s previous game industry layout, UC 9 Game’s investment in Kabam and Wandoujia seems to be the less brigh “X” in Alibaba’s “3 + X” strategic system.

At the 2017 strategic launch event in March, Alibaba Games revealed that it would spend a billion yuan to promote the game’s IP ecology and to launch the internationalization strategy.

Alibaba Game launched IP cooperation platform, which would undoubtedly take advantage of its to build high-quality game R&D ability and to make loop among literature, film and television dramas. In this way, it could present Alibaba’s film, television dramas and literature in a more direct way.

Some industry insiders predict that Alibaba’s accelerated layout of the game industry may drive the gaming industry from online to offline experience. It remains unknown whether the new game industry will be revolutionized and another frontier of the game industry will be changed or not.

 

This article originally appeared in TMTPost and was translated by Pandaily.

Click here to read the original Chinese article.

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