2023 is the year of rejuvenation and explosion of game version control in the game industry.

For a long time, the competition in the domestic game market has mainly focused on marketing methods.

Game developers use the method of launching new games in large quantities to trial and error, and through frequent user acquisition activities, they select users with payment potential, quickly realize monetisation, and thus maintain game operation and generate profits.

However, after 2018, the tightening of version control policies caused the number of game products to plummet, making the traditional batch replication strategy unsustainable. Game developers had to shift their focus to improving game quality in order to cater to increasingly picky players and stand out in the fierce market competition.

Under this background, premium self-developed games such as the 5-billion-yuan production cost game "Honor of Kings" and the five-year R&D cycle game "Genshin Impact" have become new darlings of the game market with their strong ability to attract players and generate revenue. They not only bring rich returns to game developers, but also provide new problem-solving ideas for the industry.

Although self-developed games have higher risks due to the long and high-cost development process, premium self-developed games can effectively extend the game's life cycle and achieve long-term operation, thus bringing considerable revenue.

This shift also prompts the game industry to shift from quantity competition to quality competition, indicating that the future development of game developers will tend to differentiate. For investors, this is actually more conducive to screening out companies that truly have strong self-developed capabilities, can continue to promote the launch of high-quality new games and carry out long-term operation, and strengthen trends such as globalisation to bring more certain opportunities.

The recent Hong Kong stock annual report season may provide us with a good observation time.

According to the latest annual report released by Qingci Games, the company not only continuously launches high-quality new games to maintain player activity, but also actively expands overseas markets to further enhance the company's brand influence and competitiveness. In 2023, the company achieved revenue of 906 million yuan, a year-on-year increase of 43.7%; gross profit of 558 million yuan, a year-on-year increase of 32.2%.

From the user perspective, the company's game products in 2023 have strong appeal, driving continuous improvement of users' willingness and ability to pay. The average monthly active users (MAU) reached 2.48 million, a year-on-year increase of 55%; the average monthly paying users (MPU) was 401,000, a year-on-year increase of 88%; the average revenue per paying user (ARPPU) was 302 yuan, a year-on-year increase of 15%. In addition, the company has accumulated 88.343 million registered players, a year-on-year increase of 12%.

Frequent launches of premium new games, classic games upgraded and reissued.

Looking back at 2023, Qingci Games launched four games including "Fantasy Magic Plan," "New Sword Hero","Magical Card Sakura" and "Time Travel Agency", which contributed to performance growth and worked together with games such as "The Strongest Snail" to support revenue growth and continuously optimize revenue structure.

For example, the game "New Sword Hero" jointly released by Qingci Games and CMGE, rose to the top of the IOS free game rankings and 14th on the best-selling list immediately on the day of launch.

Financial reports show that as of December 31, 2023, "New Sword Hero" achieved revenue of approximately 288 million yuan within only six months of release. Its ability to stand out from many similar fantasy games not only depends on its own excellent product quality and diversified gameplay, but also on Qingci Games' strong operational capabilities.

Another game, "Magical Card Sakura", as a licensed girl game with the anime "Cardcaptor Sakura", once topped the iOS free game download list and the iOS game sales list in Hong Kong, Macao and Taiwan, demonstrating its strong IP influence.

In addition, several classic games under Qingci Games have also prepared new versions and will be launched in 2024.

For example, the game "Fragile Dreams" recently welcomed its largest version update since its launch, with comprehensive and meticulous optimization and upgrades in gameplay, art style and characters. At the same time, "Fragile Dreams" also collaborated with the hit Chinese animated film "Ne Zha". This move not only further enhances the game's brand influence, but also attracts more users to pay attention to and join the game.

And the classic game "Blade& Heart", released by Qingci, will also have a major version update in 2024, and its sequel "Blade& Heart 2" has also been launched in early 2024.

At present, Qingci Games' many reserved games such as "Knight Charge", "Ares Virus 2" and "Lost Light" have also obtained version numbers. In addition, Qingci has also reserved many mini-program games. Considering Qingci's ability to create explosive games, as the commercial value of the game reserves is continuously realised, it will also provide a continuous source of power for the company's growth.

The trend of game globalisation is surging, with a global strategy flowering.

As the multi-dimensional nature of the gaming industry becomes increasingly prominent, it has far exceeded the scope of simple entertainment and has shown profound cultural value and a driving role in cutting-edge technology, becoming the core driving force for industry development.

In the current gaming market trend, cultural globalization has become an irreversible trend.

During the National People's Congress, Guo Yuanyuan, a member of the National Committee of the Chinese People's Political Consultative Conference and deputy dean of the Institute of Mega-City Economic and Social Development at Capital University of Economics and Business, pointed out, "The current society has a vague and even biased understanding of games. The gaming industry has both cultural and economic benefits in the field of international cultural dissemination. Its integration of knowledge and training, experience and other content in multiple fields such as education, health, technology can exert its effectiveness on a global scale and promote China's social innovation and new quality productivity development in a pragmatic way."

It can be seen that for gaming companies, not going overseas means facing the risk of being eliminated. This is not only due to the saturation and intensification of the domestic market competition but also because globalization can maximize the commercial value of gaming products and meet the needs of a wider range of players.

Regarding this, Qingci Games has already included the global layout of gaming products as an important part of its development strategy. Overseas revenue reached 258 million yuan in 2023, accounting for 28.5% of total revenue.

Taking "The Strongest Snail" as an example, as a representative work of Qingci Games' long-term operation, it has been launched in regions such as Japan, Southeast Asia, North America, and Australia.

From the perspective of operational performance, "The Strongest Snail" achieved good results on its first day of release in Japan, with the first place on both the App Store and Google Play free game rankings, and continued to dominate the Apple Store free game rankings for a week. After being launched in Thailand, it also won the first place in the Thai region's iOS free game ranking and the fifth place on the iOS game bestseller list. In addition, the game also reached the top of the iOS free game rankings in many other regions such as the United States, Canada, Australia, and New Zealand.

Reflected in the performance level, "The Strongest Snail"'s overseas release has brought substantial revenue income to Qingci Games. In 2023, the accumulated revenue in domestic and overseas markets was about 3.259 billion yuan, and the income generated was about 486 million yuan.

The outstanding achievements of "The Strongest Snail" in overseas markets demonstrate the ability and operating capability of Qingci Games in overseas publishing. This not only further expands the game's publicity and influence but also accumulates a good reputation and loyal user group in overseas markets, laying a solid foundation for the future overseas market expansion of this product.

It is reported that the company will also further plan to implement the launch of "The Strongest Snail" in the Korean region and will launch Vietnamese, Indonesian, German, French, Spanish, Portuguese, and Italian versions successively this year to achieve more comprehensive coverage of Southeast Asian and European regions.

In addition, Qingci Games has also released the "Fat Goose Gym" App version in Japan, which builds a gym through synthetic gameplay, adds more regions and equipment furniture to attract more fat goose customers, and has launched and ranked first on both the iOS free game rankings and the Google Play free game rankings in the Japanese region.

It can be seen that a high-quality gaming product usually has excellent presentation and appeal, can win the love and pursuit of players worldwide. Whether in the domestic market or overseas market, it will show impressive results, and Qingci Games' products have already given an answer.

At the earnings conference, Qingci Games' management stated that the company will actively promote the popularity of products in overseas markets that are still not covered to reach more players. For example, the company's self-developed SLG game "Project E", has been displayed at the Australian Gaming Exhibition last year and received a warm welcome from overseas players. It will further expand the scale of testing in 2024. The authorized and introduced RPG game "Project L" is also expected to be released in the Korean region.

The future is long and bright, waiting for the potential to be unleashed.

Taking a longer-term perspective, the growth path of Qingci Games has become very clear.

At the industry level, official media has expressed a positive attitude towards the gaming industry many times.

For example, the Xinhua Daily Telegraph in February of last year published an article titled "Don't Ignore the Technological Value of the Gaming Industry"; In October, the State Administration of Press and Publication issued the "Notice on Implementing the Network Game Fine Publishing Project"; In November, the China Audio-Video and Digital Publishing Association produced the documentary "Chronicles of Chinese Games"; In December, the State Administration of Press and Publication issued the "Network Game Management Measures (Draft for Soliciting Opinions)". In addition to proposals such as "expand the scope of anti-addiction and promote functional games" during the National People's Congress this year, the healthy and standardized development of the gaming industry is strongly promoted.

At the market level, the normalization of edition number allocation will continue to optimize the supply side and boost the ceiling of the gaming market.

According to data, there were 1,075 game licenses issued in the market in 2023, twice as much as in 2022. Entering 2024, the trend of license issuance continues, and the number of domestic game licenses issued in the last three months has significantly exceeded the average level of 2023. With the abundant product reserves of major game developers, the new product cycle of the industry is steadily opening up, and a new round of profit release will drive further growth in the game market.

Under the resonance of the industry and the market, it is crucial for major game developers to achieve sustainable development and consolidate their market position with high-quality game products and a global perspective. High-quality game products are the key to attracting and retaining players, while going global is an effective way to diversify revenue sources and enhance market competitiveness.

As mentioned earlier, Qingci Game not only has a rich and diverse game reserves, but also continues to expand its overseas market. It can be said that Qingci Game has already demonstrated strong market competitiveness in both the present and future.

On the one hand, in the context of the entire game industry's transformation, the advantages of Qingci Game's research and operation integration have been highlighted; on the other hand, Qingci Game has seized the trend of going global and actively promoted its game projects to go global, achieving impressive results.

Looking forward to the future, this will help the company explore industry opportunities from multiple perspectives, further open up the company's growth space. Based on the company's high-quality IP long-term operation capability and diverse game reserves, coupled with an actively expanding global business layout, the market may have some expectations for Qingci Game.