Li Hao (pseudonym) recently discovered that whether on WeChat or short video platforms, he stayed longer and longer. And this is not because he spends more time chatting and watching short videos, but because he often sees some "inexplicable" marketing videos on these platforms. For example, "You start with a tree, and all the equipment depends on cutting it down." "Everyone else on the plane is sleeping, but I am just playing fiercely." "Three minutes to get started, five minutes to master." In the lower left corner of these gimmicky copywriting, there are often links hanging. There is no need to download the app or register an account. They can be opened directly on Douyin, and some are directly connected to the WeChat applet.
After taking a closer look, I realized that these were game advertisements. There are various types of these games, including chess and card games, puzzle games, and development games where you can upgrade and receive rewards by hanging up.
Once he clicks to enter out of curiosity, Li Hao can't help but play a few games. Sometimes he can't help but "recharge 6 yuan for the first time" to receive the so-called "newcomer gift pack" and experience the feeling of "making money stronger"; there are also some mini-games that do not have a recharge path, but whether to receive benefits or obtain props, he often needs to watch dozens of seconds of advertisements.
Recently, the National Press and Publication Administration released the "Domestic Online Game Approval Information for January 2024". A total of 115 games have passed the review, exceeding the number of all single batch versions in 2023. Public information shows that this is the second time that the number of single approvals has exceeded 100 models. The last time was 105 models in December 2023.
This is regarded by the industry as a major benefit to the gaming industry. It is worth mentioning that in this batch, more than half of the games are in the "mobile-casual puzzle" category, with 58 games. Regardless of the platform or the trend of version number issuance, these small games are ushering in a new round of explosion.
01
How profitable can mini games be?
According to Wang Ming (pseudonym), a senior game industry insider, the regular issuance of version numbers will help the stable development of the industry. However, such issuance intensity has been seen in previous years, and sometimes the tightening of version numbers is sudden, so he is cautiously optimistic about the speed and intensity of version number issuance.
At the same time, Wang Ming mentioned that the version numbers issued this time cover a large number of casual puzzle games. The development difficulty and capital requirements of these types of games are relatively small. This shows that many small and medium-sized developers can also obtain version numbers for their products. Version numbers are not just the privilege of big manufacturers. Let a hundred flowers bloom, which is a good phenomenon for the industry.
"IT Times" reporters noticed that not only small and medium-sized developers are crowding the small game track, but also big companies such as Tencent, NetEase, 37 Interactive Entertainment, ByteDance, etc. have also poured in. The reason can be attributed to the excellent ability of small games to attract money.
Tencent pointed out in its second quarter financial report of 2023 that the number of monthly active accounts of mini programs exceeds 1.1 billion. Among them, the mini game segment as a casual game platform has made a significant contribution and generated high gross profit margins and distribution and advertising revenue with platform economic effects. During the earnings conference call, Tencent executives believed that Tencent’s Q2 gross profit margin exceeded expectations due to structural changes. One of the changes was the rapid growth of WeChat mini-games.
According to media reports, the monthly revenue of each of the top ten small games on WeChat rankings can reach about 80 million yuan, while for the top ten to twenty small games, this figure ranges from 20 million to 30 million yuan.
The phenomenal mini-game "Sheep", which became popular in 2022, was once reported to have revenue of over 100 million yuan in half a year. This number can’t help but shock players like Li Hao: “I just watched an advertisement and the most I recharged was 6 yuan. They made a "small goal"?"
Wang Ming told the "IT Times" reporter that this type of game quickly accumulates users through viral marketing, and at the same time attracts users to click on ads through a strong desire to repeat challenges, and then profits from advertisers. This is the most mature business model for this type of game. This type of profit-making model through advertising is more like an "advertising spot" than a game.
02
Version number, the "stepping stone" to profit
A Yuan (pseudonym), the person in charge of independent games, and his team spent nearly three years developing a mobile app game. They waited for eight months from applying to officially receiving the version number. And many colleagues he knows in the gaming industry have applied for a version number a year or two ago and are still waiting.
In Ayuan's view, for himself and his team, obtaining a version number not only means that the game can be launched online, but is also an important prerequisite for the commercialization of the game.
In May 2016, the former General Office of the State Administration of Press, Publication, Radio, Film and Television issued the "Notice on the Management of Mobile Game Publishing Services." It was officially implemented on July 1 of that year. The notice announced that from the date of implementation, mobile games without the approval of the State Administration of Press, Publication, Radio, Film and Television may not be published or operated online.
Since then, the game version number has become a necessary pass for the official release of client games, web games and mobile games. Without a game version number, new games can only undergo public and internal testing, but cannot open the recharge port for commercial monetization. Since the "Measures" did not specifically involve mini-program games at the time, in the past two years, mini-program games have become the "Garden of Eden" for the gaming industry, especially small and medium-sized companies. During the suspension of the issuance of domestic game licenses, many small and medium-sized game companies have turned their attention to the field of casual games on various mini program platforms.
According to the "IT Times" reporter, early paid games usually adopted a one-time purchase or CSP model, that is, monetization through one-time purchase or charging based on the length of the game. As gaming devices shift from PC to mobile, the CSP model gradually decreases. The new payment models are mainly one-time purchases, IAA (advertising revenue), IAP (in-app purchase payment) and IAA+IAP (advertising + in-app purchase mixed monetization). In the IAA model, users obtain props or extend game time by watching advertisements instead of paying directly, providing profit possibilities for small games that originally had limited monetization channels. Such as open-screen advertising, incentive advertising and permanent advertising, etc., are all common profit models for IAA games.
Now open the WeChat mini-game page. On the list of popular games played by friends, "Sheep" is still at the top. When players enter the game again, they can find that the interface is richer, more new gameplays have been launched in the game, and jump links to multiple other games have been set up.
03
Don’t you need a version number to monetize ads?
Can casual games be launched online without a version number? This has been controversial in the industry.
Wang Ming believes that if casual games only make money through advertisements or gift rewards in Douyin games, and do not directly charge players, they are compliant.
Due to the large number of casual games, simple gameplay, short development and life cycles, and long application period for version numbers, many companies have been less enthusiastic about applying for version numbers.
According to the Securities Times, while major application markets are strictly reviewing version numbers, casual games without in-app purchases can be put on the shelves normally in these markets. For example, the customer service staff of Xiaomi App Market said that casual games can be listed in Xiaomi App Market without a version number. In mainstream application markets such as Huawei, there are also many casual games without version numbers.
Many game practitioners have assumed that if casual games only rely on advertising sharing to make profits, they can operate online without a version number. However, legal experts believe that even for casual games without in-app purchases, operating without a version number carries high legal risks.
A punishment case announced in Zhaoqing City, Guangdong Province has attracted widespread attention in the industry. The two companies were subject to administrative penalties for operating games without licenses. Different from previous cases of fines, the games punished this time are all casual games with no built-in payment and only advertising functions.
Wang Ming revealed to the "IT Times" reporter that there had been rumors that game products that use advertising to monetize also need a version number, "which has aroused great concern in the industry."
Ayuan believes that if game products that use advertising to monetize also require a version number, it will have a huge impact on 90% of companies that rely on such mini program games..
What impressed Ayuan deeply was a game called "Animal Restaurant". After initially using the IAA model to successfully earn funds and obtain a version number, the team further developed the App version. The game is currently operating very well and has become a model of a healthy business model for this type of game in his eyes.