Author | Huang Yu

Editor | Zhou Zhiyu

Tencent games have never lacked big projects in their pockets. On the evening of May 28, the SPARK 2024 Tencent game press conference arrived as scheduled, bringing the latest news on 34 products, including 13 blockbuster new games, to show the outside world its bottom line for the future.

Among the series of projects presented by Tencent Games is “Dungeons and Warriors: Origins” (hereinafter referred to as DNF mobile game), which has just been launched. It is also the absolute focus of the game industry in the first half of this year or even 2024.

As far as Tencent games are concerned, at a time when “Yuanmeng Star”, which was launched at the end of last year, has been slow to become a hit, DNF mobile games carry the expectation of becoming a new hit.

As one of the “Big Four Kings” in the early days of Tencent games, DNF is the only IP that has been slow to launch a mobile game version. After nearly 4 years of ticket cancellation, the DNF mobile game was finally officially launched on May 21. As expected, it had a great start. Once released, it was full, and the queues were unprecedented.

Judging from the market performance in the past week since launch, this DNF mobile game, which is full of “feelings,” is expected to become another national mobile game under Tencent.

According to Qimai data, since its launch, DNF mobile games have been at the top of both the iOS list and the game's bestseller list for 8 consecutive days. The estimated number of downloads in the past week is about 792,000, and the estimated weekly revenue is about 13.237 million US dollars.

As the world's largest game+social networking company, nearly 30% of Tencent's revenue comes from games, and Tencent must guard the moat.

However, the game business, which was criticized by Ma Huateng as being “like lying on a credit book,” did show signs of weakness in the past two years. Not only did they not create new hits after “Wang Zhe Rongyao” and “Peace Elite,” but the performance was basically on the sidelines.

In the fourth quarter of last year, Tencent's game business revenue was 40.9 billion yuan, down 2% year on year, and both domestic and foreign game business declined. As of the first quarter of this year, game business revenue was still not ideal. The overall year-on-year decline was 0.4% to 48.1 billion yuan. Among them, overseas games increased 3%, and domestic games fell 2% year over year.

In order to change this state of affairs, Tencent Gaming is working hard to make adjustments and optimizations. Tencent management has revealed that the weak revenue situation of Tencent games is expected to improve starting from the second quarter of 2024.

In this context, the launch of the DNF mobile game is naturally also expected to be high.

Morgan Stanley pointed out that DNF mobile games are one of Tencent's largest game releases in recent years, and should be one of the key catalysts driving the inflection point of domestic game business growth in the second quarter. The game's total revenue for the first year is expected to reach 10 billion yuan.

Tianfeng Securities also believes that there is potential for further improvement in Tencent's game growth expectations. On the one hand, the recently launched DNF mobile game has an excellent ranking in the iOS list, and the annual sales performance has more than exceeded expectations. On the other hand, the excellent performance of “Wild Battle” contributed to a 34% year-on-year increase in overseas game traffic in the first quarter of 2024. Since April, its iOS ranking in major markets has further improved compared to the first quarter.

As predicted by Tianfeng Securities, Tencent's game growth is about to pick up, and both domestic and foreign growth rates are expected to pick up. On the one hand, this is due to improved operation of mature games, and on the other hand, from the upcoming launch of new heavyweight games.

The restructuring and optimization of Tencent's game business has borne fruit. In addition to DNF mobile games, more new and old Tencent games are being revitalized.

Ma Huateng, chairman of the board of directors and CEO of Tencent, said after the release of the first quarter earnings report that Tencent's team adjustments in several leading games in the local and international markets saw initial results in the first quarter, and overall game turnover grew, laying the foundation for game revenue to resume growth in the next few quarters.

According to the data, Tencent's total game turnover in the local market recovered 3% year on year in the first quarter, and total game turnover in the international market increased by 34% year on year.

According to reports, the two leading games, “Wang Zhe Rongyao” and “Peace Elite”, benefited from the new commercialization pace and improvements in game content design, and achieved year-on-year growth in March sales. The volume of local market games such as “Battle of the Golden Shovel”, “CrossFire Mobile Game”, and “Dark Zone Breakthrough” reached record highs this season.

Sales of a number of key games in overseas markets also performed well in the first quarter. Among them, Supercell's game achieved an increase in the number of users and turnover; the number of daily active accounts in the international market was more than double that of the same period last year, and the turnover was more than four times that of the same period last year.

Tencent management also pointed out at the first quarter results meeting that Tencent has been working hard to revitalize the flagship game. This process is now progressing smoothly, and the company has also gained some experience from it. One of them is that games classified as evergreen can indeed grow new shoots, such as “Wild Brawl.”

Furthermore, the management also said that if a game that is viewed as an evergreen tree stagnates, the problem is usually not the game itself, but the team that runs the game. Tencent needs to change the team. Sometimes it's the mentality, and sometimes it's the people. When companies make these changes, positive results are quickly visible.

In the face of the current increasingly fierce competition in the industry, Tencent is also more careful in developing new games.

Tencent management believes that the game industry is a challenging industry for new games, because as Evergreen games get better and better, every new game must not only compete with other new games released during the same period, but also compete with every existing game or the best of all existing games. These games have survived and developed into evergreen games.

In this context, Tencent's response is to continuously raise the standards for new games introduced to the market, focusing on fewer but larger, and better new games.

“For games that want to become evergreen games, the metrics we focus on aren't the most obvious external metrics, such as downloads and first-day revenue. The metrics we focus on are player engagement, retention rates, etc.” The management mentioned above said.

Tencent Gaming is in a critical period of regaining its best form. While focusing on new games with high production value, it is also putting more emphasis on evergreen games.

As can also be seen from the SPARK2024 Tencent game press conference, unlike in the past, Tencent is also paying more attention to iterating the gameplay and improving operations to present evergreen games.

Focusing on the main business is still the key for Tencent Gaming to maintain its position as king in the future.