Source: Sanli River (ID: Sanlihe1)
At present, the first batch of games have been audited and the release number is being issued. Because the application stock is too large, it is expected that digestion will take time.
It is said that the voice had just fallen silent for two seconds, and then there was a cheer.
Affected by this, the day A-share game board multi-share trading, become a dazzling red in the green market. Tencent Holdings, listed in Hong Kong shares, rose 4.51%, returning to HK$3 trillion in market value and Ma Huateng to be the richest man in China.
The suspension of game number distribution started on March 29 this year and has lasted for nearly nine months. During this period, the life of Chinese game companies can be said to be very difficult.
Tencent Holdings reported that in the second quarter of this year, Tencent's game business revenue was 25.2 billion yuan, a decline of 12.43%. By the third quarter, under the influence of the seasonal effect of summer vacation, the game business increased by 2.4% compared with the second quarter, but fell by 3.8% compared with the same period last year. And the proportion of the game business in total revenue fell to 32.03%, the lowest since 2015.
Meanwhile, Tencent Holdings shares have fallen nearly 25% since March 29.
Fifty-one game companies listed on domestic A-share market have not been spared. Among them, 21 companies showed a decline in net profit, accounting for more than 40%. Since March 29, the Tonghuashun Mobile Game Index has fallen by more than 50%.
According to the China Game Industry Report 2018 issued jointly by the Game Industry Committee of China Voice and Digital Association and Gamma Data, the sales revenue of the domestic game industry increased by 5.3% in 2018 compared with the same period in 2017, which was 17.7 percentage points lower than the 23.0% increase in 2017, and the growth rate slowed down significantly. The growth rate was the lowest in a decade.
Worst of all, the overall growth rate of the game industry has fallen below double digits, with the number of game users growing by 7.3% year-on-year in 2018. Although this growth rate is slightly higher than in previous years, it is an indisputable fact that the industry has recovered and the demographic dividend has disappeared.
This has changed the growth model of the game industry. Before 2013, the rapid growth of game market revenue relied on two-wheel drive, i.e. user size * ARPU (average revenue per user). Today, the growth mode of the industry will mainly rely on ARPU growth.
However, ARPU is difficult to achieve explosive growth in the short term. From 2009 to 2017, the highest growth rate of ARPU in China's game market occurred in 2014. The main reason is the popularity of mobile payment and the severity of hand-swimming brought by the popularity of 4G network. The annual growth rate of ARPU is 31.8%, while the growth rate of ARPU in other years is not more than 20%.
According to Quest Mobile, from June 2017 to June 2018, the Big Four accounted for more than 70% of Internet users in China. So the competitors of the game company are not only the game counterparts, but also the competitors of other leisure ways such as video, music and so on. For example, the rise of today's headlines represented by tremolo.
So many game makers have to buy traffic from industry giants, and also face the dilemma of soaring cost of buying, which erodes profits. According to the data of hot cloud, from January to April 2018, the average cost of hand-swimming was rising rapidly. In January, the cost of hand-swimming was 67 yuan per user. In February, March and April, the cost of hand-swimming rose to 72 yuan, 76 yuan and 100 yuan respectively.
However, Tencent's share price did not fluctuate significantly that day, from a high of more than 2% to a slight increase of 0.07% in the final closing. Tencent can be said to be China's social giant, QQ live more than 800 million months, Weixin live more than 1 billion months. Social interaction is one of the most important characteristics of the game. Platform can effectively improve the user stickiness and life cycle of the game.
IP is king. Successful game companies need rich IP reserves, not a flash in the pan.
On February 20, 2012, Gungho, a Japanese game company, launched "Chi Long Mi Cheng", which achieved more than 6 million downloads and 15 billion yen in revenue that year. By 2013, the sales revenue of Zhilong Metropolis had reached 148.6 billion yen, accounting for 91.1% of Gungho's total revenue. In 2013, the smartphone game market in Japan was 560 billion yen, that is to say, the revenue of the game "Zhilong Maze" accounted for 26.5% of the industry.
With its unprecedented popularity in Japan, Gungho has a market value of more than $15 billion, even surpassing Nintendo, the leading player in the Japanese game industry.
However, the good times are not long. As "Zhilong Maze" enters a recession, Gungho's revenue declined by 11% in 2015 and 27% in 2016, respectively. Today, Gungho has a market capitalization of less than $2.2 billion, while Nintendo, which has many successful IPs such as Mario and Zelda, is singing all the way, with a steady market capitalization of more than $60 billion.
Game companies face uncertainties in their performance.
The life cycle of the game is getting shorter and shorter. In the case of weakening its contribution flow, once the new product can not be launched on schedule, or can not meet expectations after the launch, it will have a huge impact on the company's performance.
Game companies in the industry, out of consideration of listing, have a good performance before listing. Once listed, the stock price will be greatly affected by the performance change.
For example, Shanda Game, which was listed on Nasdaq on September 25, 2009, saw revenue growth of 45% in 2008 and 42% in 2009. By 2010, its revenue fell by 6% and net profit fell by 11%. After that, net profit has been declining for several years. Influenced by the performance, the stock price also went down all the way, while Nasdaq had already gone bullish at this time.
Similarly, Blue Harbor Interactive, which was listed on the Hong Kong Stock Exchange on December 30, 2014, saw revenue growth of 94% in 2013 and 32% in 2014 before listing, while revenue declined by 20% in 2015, and stock prices have since faltered.
In the year of 2015, A shares, game concept stocks have been hot speculation, game companies have listed, with the help of the bull market brought about by high valuation, many companies share prices continue to rise.
The explosive growth of the game industry has triggered a wave of mergers and acquisitions in the theatre industry, and the price of mergers and acquisitions is often hundreds of millions or even billions of dollars. The characteristics of light assets, high growth and high valuation in the game industry lead to a large number of goodwill in the merger and acquisition of listed companies.
Once the performance of mergers and acquisitions fails to meet expectations, listed companies will be affected by the impairment of goodwill.
For example, since Palm Fun Technology's IPO in 2012, 810 million people have acquired Pioneer of Mobile Networks, 1.74 billion people have acquired Play Crab Technology, 1.18 billion people have acquired upstream information, 2.678 billion people have acquired 80% of Tianma Time and Space, and so on. Relying on these huge mergers and acquisitions, its revenue scale was rapidly enlarged. During the period when the concept of game was pursued by the capital market crazily, the share price of Palm Fun Technologies soared. At its peak, the total market value of the company reached more than 50 billion yuan.
However, mergers and acquisitions did not allow Palm Fun Technology to achieve sustained high profit growth. In 2017, Palm Fun Technologies realized 1.768 billion yuan in revenue, a decline of 4.66% compared with the previous year; net profit of shareholders belonging to listed companies was 264 million yuan, a decline of 48.11% compared with the previous year. More terrible than the decline in performance is the goodwill of 5.4 billion yuan, accounting for 54.55% of the company's total assets, which is accumulated in the company's previous acquisitions.
With major shareholders and management wildly reducing their holdings, the share price of Palm Fun Technologies has fallen to a low point, with the latest market value of only 10 billion yuan.
All these worries have been reflected in the valuation of A-share game companies.