Recently, according to a number of media reports, the Interactive Entertainment Division of BABA's game business will be upgraded to an independent business group, parallel to BABA's entertainment. At the same time, Yu Yongfu will make a comeback as the first head of BABA's game business group. Behind this major adjustment, many industry insiders believe that the domestic game industry is likely to usher in a huge wave.

Prior to this, outsiders commented that BABA always lacked the "entertainment" gene. Relying on the success of e-commerce business, BABA has been able to enter the head matrix of Chinese Internet companies, but in the memory of most Chinese people, the games produced or even operated by BABA are almost blank, and very few can be called popular styles. It was not until 2019 that the explosion of the Strategic Edition of the three Kingdoms created a sense of existence for BABA's game business.

In addition to BABA reviving the game business, another Internet giant byte jump on the game's ambition is even more obvious. In the past two years, byte jump has also invested a lot of money in the game. After BABA enters the game position with byte jump, what kind of impact will this have on Tencent and NetEase, Inc? In addition to focusing on the current game battlefield, cloud games have become the development trend of the game industry. Will BABA, Tencent and byte beat usher in a fierce battle in this new battlefield in the future?

BABA's game business is "renovated", and important people fight against the enemy.

Going back to the source in time, BABA's attitude towards the development of the game business has been vague. In 2008, Jack Ma said in public: "BABA will not play games even if he starves to death."

In 2019, Jack Ma retired and focused on education, while BABA's game business also began to usher in a "big step". In October of the same year, BABA jumped from 17th to fifth in the global App Store and Google Play revenue rankings of Chinese mobile game publishers, surpassing a number of domestic established game manufacturers.

At the financial report meeting in the second quarter of this year, BABA CFO Wu Wei said: "since the beginning of this quarter, self-research online game business has crossed the incubation stage and entered a period of gradual maturity and development." BABA's continuous efforts in the game business in recent years may be related to the slowdown in the growth rate of BABA's e-commerce business.

According to statistics, BABA's revenue growth in e-commerce business has gradually slowed down since 2018. In order to find new business growth points, BABA began to invest in industries such as cloud business to seek growth engines other than e-commerce. This year's "Strategic Edition of the Chronicles of the three Kingdoms" also let BABA taste some benefits.

According to US Stock Research News, Yu Yongfu, chairman of Gaode Group, will be in charge of BABA's game business section on behalf of the group. Before that, Yu Yongfu was in charge of BABA Group's UC, Gaode, BABA's mother, BABA, and other business sectors.

Yu Yongfu, who joined BABA with the acquisition of UC in 2014, has led UC browser to expand its business a hundredfold in three years. In 2016, Yu Yongfu became chairman and CEO of BABA Entertainment Group, becoming the first head of BABA.

This time, Yu Yongfu became the person in charge of BABA's game section, and he was also the first head of BABA's game business group after its establishment. A source said: BABA may have his investment ability, and Yu Yongfu has several experiences related to investment. BABA's game performance is relatively stable at this time, and the next step may need to expand the territory.

BABA, byte beat into the game, the game industry may be "shocked" obviously

BABA, who lacks the "game gene", has also begun to show his ambition in the game track in recent years. What has the same idea with BABA is the byte beat. Compared with BABA, the byte beat hatched by Tik Tok seems to be stronger in the game attribute.

BABA and byte bounce, ready to go

Behind BABA's entry into the game market with byte jump one after another, through their recent actions, it is not difficult to see that they all show strong interest and ambition in this business.

The "Strategic Edition of the three Kingdoms", which was publicly tested on September 20 last year, with the authorization of Glory Tekumo, the game has been online for only half a month, and the cumulative number of registered players has exceeded 3 million. According to a recent report released by Qimai data, "the strongest money-attracting capacity of Chinese mobile games iOS in the first half of 2020", the "three Kingdoms Strategic Edition" of Lingxian Mutual Entertainment ranked third on the iOS TOP100 list in the first half of 2020, followed by "Arena of Valor" and "Game for Peace" respectively.

The game industry has always been famous for "burning money", and high investment in capital is indispensable in the process of development and growth. In 2017, BABA invested 1 billion yuan to promote the development of game ecological IP. In April 2018, BABA Group reached a strategic cooperation with Japanese game company Hit-Point, winning the exclusive license for the release of Travel Frog in Chinese mainland.

In addition to BABA, byte beat is also a high-profile action in the game field. As of January this year, byte Jump has set up a game team of more than 1000 people, and has pocketed "big shots" such as Wang Kuiwu, former senior director of Perfect World, and Na Tuo, former product manager of interactive entertainment Qiankun games. In April this year, the byte jump game business will continue to recruit more than 1000 people in 2020 to meet the R & D needs of multiple game product lines.

In addition, byte jump actively invests and acquires a number of R & D teams, including Shanghai Moji, Shanghe Network, Caesar Culture, etc., and provides in-depth support of traffic and resources. It is enough to see the determination of byte beating to enter the game market.

The byte bouncing game business starts from the agent operation business. The reason why byte jump can obtain the agent operation rights of many games, the biggest advantage lies in the traffic brought to the game by the huge number of users such as Douyin and Jinri Toutiao. As of August, Douyin had more than 600m daily active users, including the volcanic version of Douyin.

In the monthly download list of iOS mobile games in China released by Apple Annie in April 2019, light games such as "National Drift 3D", "I play thief 6" and "Cat Thousand Cup" are all generated by Douyin alone, and the main traffic of "eliminate virus", which is No. 1 in the download list, also comes from Douyin.

BABA and byte beat, with the rich flow of its products, and their own size, are entering the game track, and from the current pattern of the game track, NetEase, Inc and Tencent are undoubtedly still the first echelon. But it can not be ignored that BABA and byte beat have entered the game, Tencent, NetEase, Inc's game business impact is also inevitable.

Tencent and NetEase, Inc, the two giants will not sit back and wait for death.

In the early years, taking advantage of the "big outbreak" of the game, Tencent and NetEase, Inc also made a lot of money by relying on the game business. According to the financial report, Tencent's total revenue for the whole of 2019 was 377.289 billion yuan, of which the total revenue from the game business section was 114.7 billion yuan, an increase of 10% over the same period last year, accounting for 30.4% of the total annual revenue.

NetEase, Inc, another online game giant in China, reported that NetEase, Inc's total revenue from games in 2019 was 46.42 billion yuan, an increase of 16% over the same period last year. In terms of the proportion of game business revenue, game revenue accounted for about 78% in 2019, accounting for more than 3/4 of the total revenue for the whole year.

It can be said that Tencent's two national social products provide the most stable user stream for his games in China. However, Tencent, who has 1 billion social users, is starting to enter the slow lane of user growth. According to financial data, Wechat and WeChat combined monthly active user accounts reached 1.206 billion in the second quarter, up 6.5% from the same period last year, but Wechat fell 0.29% in June, which is not the first decline.

Prior to this, Tencent relied on the huge number of users to win the agency and operation rights of many popular style games, the most prominent being the two popular online games, "Arena of Valor" and "League of Legends", which brought huge traffic and led to the strong growth of Tencent's game board. However, from the current Tencent's games, in addition to League of Legends, Arena of Valor and other popular online games, in the creation of new popular style games, Tencent seems to be weak.

And from NetEase, Inc's game business point of view, it is also caught in the bottleneck of new user growth. In the early years, NetEase, Inc was firmly in the first echelon of the game by virtue of popular styles such as "A Chinese Odyssey" and "Dream Journey to the West". At present, most of NetEase, Inc's games are previously developed large-scale PC online games with a relatively stable number of users, which seem to lack stamina in developing new mobile games and attracting new young users.

It should be noted that although they face many challenges, Tencent and NetEase, Inc have set up no small competition barriers in the domestic online game industry through years of capital investment and user community training, and they are still the leading players of domestic online games, which can not be ignored. However, do the players of "non-professional games" represented by BABA and byte beat really have no chance to break the game?

BABA, Tencent, byte beat three giants, cloud game track who will "stand out"?

From the layout of BABA and byte jump, there are related mobile games launched at present, which shows that they all have certain ambitions in the field of mobile games. But looking at the global game field, cloud games have become the focus of the layout of giants such as Microsoft Corp, Ubisoft and Sony Group Corp, and even this field has not yet been dominated by giants.

According to market research firm Newzoo released the latest "2020 Global Cloud Games Market report" (2020 Global Cloud Gaming Report). Thanks to a series of important developments in the cloud gaming ecosystem, the global cloud gaming industry is expected to generate $585 million in revenue by the end of 2020, according to the report.

The day before the establishment of BABA Game Group, BABA officially launched the cloud game PaaS 1.0platform at its annual summit, Yunqi Conference.

Currently, BABA's cloud computing services business ranks fourth in the global market share, second only to Google, Amazon.Com Inc AWS and Microsoft Corp Azure. In the domestic market, BABA, with financial and technological advantages, coupled with forward-looking strategy, has become the leading player in the domestic cloud computing market.

While the Aliyun game platform is online, byte jump also has a new action on the cloud game. A few days ago, some Douyin users found that after watching a short video of the game on the platform, there will be a button to "enter the cloud game", which can be clicked to enter the game directly. It is reported that the games provided by the platform are mainly leisure-based, which is the fastest growing branch in games in the past two years.

After smelling the "big cake" of cloud games, Tencent also made efforts in this field. In July 2020, Perfect World and Tencent jointly launched the first flagship cloud game "New Devil Land" mobile game, which completely realized the cloud game features of download-free, high-quality rendering, cross-terminal and engine adaptability. it breaks the zero experience and zero case of domestic cloud game release. At the same time, the development and introduction of AR human skeleton recognition technology, AR facial recognition, folding screen and other innovative technologies.

In foreign countries, many technology giants are also competing in cloud games. The launch of Google Stadia cloud game platform, Facebook Inc's acquisition of cloud game company PlayGiga, and Steam cloud game plans are exposed in the code. Prior to this, Apple Inc, NVIDIA, EA and other giants have also entered the game early.

Prior to this, the cloud computing business is mainly facing the B-end enterprise market, and the penetration rate of the C-end consumer market is not high. The cloud game can be said to be a landmark event for cloud computing business to enter the C-end market.

At present, whether Tencent, NetEase, Inc or BABA are all at the starting point of the cloud game track, these giants have not opened a big gap in this field at present. this is probably the most favorable opportunity for BABA to enter the game field. With the rapid development of 5G and artificial intelligence and cloud computing, the giants will still fight in the future cloud game track.