The slow thinking of Tian Kui

On June 7, another 60 games were issued with version numbers for the second time this year.

First of all, from the point of time, my first reaction isNormalization. The first version numbers of the year were released in April this year, and the industry generally expects that the release of version numbers is expected to return to normalization with the reorganization of the process related to the protection of minors and content review.

A very important sign of normalization is that the release pace can be restored to the monthly pace before the suspension, so whether the version number can be issued in May is the focus of attention.

Although we did not wait for the second version number at the end of May, in early June, after the epidemic in Beijing was basically lifted, the version number was issued immediately, dispelling people's previous concerns to a certain extent.

The second is to get the version number.Specific game characteristics. The approved games contain some medium and heavy games, which is significantly different from the structure dominated by light leisure games in the first batch of version numbers.

At the same time, in terms of play, shooting games are also included, which means that the audit principles after the specification do not have too many restrictions and restrictions in terms of lightness and play.

That is, the diversity of content and play is still encouraged under the premise of norms, which has dispelled people's previous worries. In addition, I also suggest that you pay attention toChanges in the audit unit。

Of the 60 version numbers, 44 are non-territorial examination and approval (national examination and approval units) consistent with the first batch, while the remaining 16 are territorial examination and approval (provincial examination and approval units) version numbers, which have not been seen before.

In other words, the examination and approval authority of some version numbers has been devolved to provincial examination and approval units, which will improve the efficiency of version number examination and approval.

The relevant documents on the basis of localization examination and approval can be traced back to the notice on several measures to promote the Reform and Innovation of Trade and Investment Facilitation in the Free Trade pilot Zone issued by the State Council on September 3, 2001. The high probability of landing means that the normative reorganization of the industry has come to an end, and the examination and distribution of version numbers is returning to normal.

As an industry with strong cultural attributes, gamesThe industry should be standardized before it developsIt's what it should be.

The content provided by some small and medium-sized enterprises at the stage of vigorous development of the industry is shoddy, from the principle of examination and approval.The purpose of industry norms is to develop, not to restrict.Raise the threshold of the industry, drive out the bad money, after the labor pains, the industry will go higher and further.

Of course, as the release of the game version number tends to be normal, some seller reports also put forward the valuation and performance prediction of the repair plate. But in my opinion, the foothold of investing in research must be the company, not just the industry, or to find a company with a real moat in the industry.。

We take the buying-volume profit model of the game industry as an example to help you understand the moat of game companies.

For ease of understanding, the profit model of buying volume can be simplified as follows: revenue = (LTV (considering retention)-single user purchase cost) * number of users-operation and maintenance cost-R & D cost.

Generally speaking, the difference of single-user purchase cost of the same type of different games at the same point in time is small, while the R & D cost and operation and maintenance cost are relatively fixed when entering the purchase stage, and the greatest impact on project income lies in the total number of users and LTV, in which LTV can be roughly considered to be related to the play life cycle of a single user, consumption intensity (such as monthly consumption amount) and overall retention.

For the game industry, revenue is closely related to the quality of the game and the ability of long-term operation and maintenance, which is very different among different game companies, and the total audience is more affected by play and quality. it is doomed in the early R & D stage (but difficult to predict).

Going back to investment, if you want to become an excellent game company, you need to have strong ability and character in game innovation and long-term operation and maintenance (R & D is uncertain, success is probable, but not low). But good game companies may not need to be super-first-class in game innovation and game quality, do limited optimization and innovation, and enhance customer experience with long-term operation and customer service. It can also bring rich returns to shareholders.

"Smart little question."

问 Version number issued back to normal, what is the specific impact on the game industry and extension industry? What factors can determine how high and how far the game industry will go?
Tian KuiThe game industry is a supply-and-create-demand industry (similar to movies and TV dramas, new content can create more demand).
Under the condition that the version number is suspended, although the old game can provide incremental content to a limited extent by updating the version, the limitation is still large. The release of version numbers back to normal provides a basic guarantee for the industry demand to return to the right track.
At the same time, for any industry, high-quality talents are an important driving force for development, and attracting high-quality talents requires corresponding project expenditure and good development prospects.
In the stage of the suspension of the game version number, the brain drain is also a major loss of the industry, and the version number is equivalent to the birth permit of the new game, and the throttle of the game industry will be stepped on again after getting back on the right track. the input and application of new games and new technologies will also appear in the research and development of new games, which will not only bring novel experience to users, but also spill the corresponding technology to other fields (industrial virtual display, physical engine, etc.).

The industry has significant cultural attributes, and one of the reasons for the suspension of the industry version number is also the reorganization of content censorship, which plays a decisive role in the long-term development of the industry. More standardized content will enhance the user's play experience and remove the inferior supply of the industry.

The payment feature of the game industry is experience payment, similar to that of many service industries.

Although the long-term per capita playing time is difficult to increase in the long term, the amount of payment per unit time can beat inflation for a long time (the gaming industry has significantly benefited from the development of new technologies, and newer experiences can support high unit-length payments. the vast majority of the increased payments will remain in the game industry itself rather than in the hardware sector of technological innovation), so the industry will have a lot of room for long-term development.

问 With the steady pace of release of version numbers and the continuous promotion of the game out to sea, what are the investment opportunities in the game industry where the valuation is historically low?

Tian KuiChina's game industry is huge, and at the same time, it also has one of the most high-quality software engineers in the world (high efficiency and low price). Long-term industrial accumulation makes China's game industry a globally competitive industry. at the current point in time, it is an important beginning for China's game industry to go out, and the reissue of domestic game version numbers also makes the domestic business start again, while the valuation level of the whole industry is at a historically low level. This high and low usually implies a higher level of potential return, of course, the situation of each company varies greatly and needs specific screening.

问 Referring to the "multi-dimensional verification" mentioned in the last pig cycle, are there any other independent indicators in the game industry to verify the development of the industry?

Tian KuiThe fact that the version number is reissued does not require other independent indicators, just consult the relevant official approval documents, and the continuous verification depends on the distribution frequency and variety.

The reissue of the version number has brought the development of the industry back to the right track, which may need to be tracked by some independent verification indicators, such as the number of R & D personnel of listed companies and the proportion of startups in the new version number (which may take some time). Such two indicators are relatively independent and directional.

问 The release of version numbers should be good news for the industry, but take the two release of version numbers this year as an example, it seems that the positive is not reflected in the stock price?

Tian KuiFrom the practitioner's point of view, restarting the version number is a big deal. In the context of the suspension of the version number, the company's normal talent recruitment, R & D reserves can not be carried out as planned, in the absence of clear guidelines, many games can only be at a standstill.

When innovation is interrupted, talents will be lost, and problems will arise in the operation of the company. Therefore, from the perspective of shareholders, it is very important to restart the version number.

However, from the perspective of "stock speculation", the so-called long-term significance does not carry a heavy weight in the decision-making model, and exceeding expectations is fundamental.

For example, when does the market expect to release the version number? is it too early or too late? How many people knew to send the version number before me, and was it too early or too late for me? After you know the news released by the version number, will you become more optimistic or more pessimistic? In this way, judging the judgment and actions of others is the most important thing before others.

It is often such marginal traders who affect short-term stock prices. And the information sensitivity of the current market is high, it is recommended not to look at the stock price of the day, but to look forward for a few days.

问 Where is the huge gap between loving to play games and getting investment results in games? How should we cross it?

Tian KuiThis is not significantly different from gap as customers and shareholders in most industries. Playing games as customers and investing in game companies as shareholders makes us look at the game industry from a more multi-dimensional point of view.

Of course, the player's point of view is an important part of it (but excluding personal preferences, the reason why I don't like this product may be that I am not the target customer, such as spirits in many industries), but it is not the only link to understand all aspects of the business, from R & D, publicity to operation and maintenance, and to restore a full picture from the perspective of business operators is an effective way to cross this gap.