After four consecutive days of testing, on January 18, leading game anchor Zhang Daxian will officially conduct a "Honor of Kings" themed live broadcast on Douyin. It may not be accurate to use "the general trend of the world, if it unites for a long time, it will divide, and if it divides for a long time, it will unite" may not be accurate, but it does represent a kind of emotion. I still remember that 7 years ago, Tencent took Toutiao and its parent company Bytedance to court with a complaint, pointing out that the other party was suspected of infringing the copyright of its flagship game "Honor of Kings", which brought the Internet's "Toutiao War" to the fore.
Now, seven years later, King of Glory and Douyin's "century hand in hand" has basically put the "reconciliation" trend between Tencent and ByteDance in the past two years on the bright side.
This trend undoubtedly surprises the industry and beyond. However, it cannot be ignored that the settlement reveals the objective development problems of the current Internet, especially the gaming industry that is working hard to break through bottlenecks - the powerful combination of "Honor of Kings" and Douyin may be the best solution for each other.
Under the competition, abandon the ByteDance of the game
The "Touteng War" lasted for about five years and was particularly intense from 2018 to 2021.
According to Tianyancha and public media information, during this period, the two parties had nearly 1,500 pieces of relevant judicial information. You said that I blocked video links such as Douyin and Huoshan, and the company was suspected of unfair competition; I said that you infringed on the communication rights and copyrights of game products, which can be called a "fierce fight."
Among them, on January 31, 2019, the court ruled for the first time: Xigua Video, Toutiao and parent company ByteDance should immediately stop live broadcasting content related to "Honor of Kings". However, it was not recognized by ByteDance. As similar lawsuits increased, "Honor of Kings" soon disappeared from ByteDance.
At that time, Tencent and ByteDance were like two confident and arrogant generals, each holding "nirvana" to expand territory and compete with each other. Neither one was convinced by the other, and they had already set their sights on the other's main weapon and were eyeing each other.
"Honor of Kings" and Douyin are one year apart. The former has become a national-level mobile game carrier since its public beta in 2015, while the latter was launched in 2016 and has gradually become the most important footnote in the "national short video" era. Both use differentiated interactive forms to become super digital media that connect hundreds of millions of people, and have also become the flagship products of Tencent and ByteDance.
Seeing that each other's products occupy a high market share, the generals who are expanding and conquering will never stand still. The two companies soon began to benchmark against each other.
On the one hand, Tencent first upgraded Weishi, and later launched video accounts and supported live broadcast platforms such as Huya; on the other hand, ByteDance began to investigate the game industry, acquired the startup company Zhaoxi Guangnian, and simultaneously developed self-developed games. However, due to reasons such as company genes, the two parties failed to take advantage of each other's advantages and are still in the position of followers.
This is even more obvious in ByteDance. Company executive Liang Rubo once said that founder Zhang Yiming did not play games in college. Zhang Yiming himself also made it clear in an interview with Caijing that instead of pursuing a sense of control by playing games, it is better to read difficult books, think about difficult problems, or start a business directly.
Obviously, apart from considering business income, Zhang Yiming himself has no interest in games. Therefore, although ByteDance once aggressively deployed the game business as an "intruder", such as acquiring Mutong Technology, raising Chaoxi Guangnian's strategic position to rival Douyin, investing in more than 20 game companies, etc., it still chose to give it up in the end.
At the end of November 2023, Bytedance officially announced that it would shrink its game business on a large scale and retain some innovative game exploration.
Some people believe that Byte's failure in the gaming field is due to the failure to grasp the core logic of game production - content is the essence, and traffic is the auxiliary. For a game to become popular, it must be the content that drives traffic. Even if the promotion method can attract traffic, it still needs high-quality content to stick to users.
This view can indeed be verified or partially verified in "Crystal Core", "Planet: Restart" and "One Piece: Passion of Blood". "First gather volume on Douyin to increase popularity and flow in the short term, but it will be weak in the later period." has become a typical symptom.
Relying on the "blood transfusion" of social platforms to grow, it cannot "generate blood" and "feed back" other businesses on its own. This kind of game business obviously does not have long-term competitiveness, and it only needs an opportunity to be cut off.
However, facing the huge number of game users and related value chains, ByteDance will certainly not give up easily. So, under the premise that self-produced fruits are not good, grafting and cultivating good fruits must be a better choice. If the game is not good, actively cooperating with the top players of the game may be another way to eat the game cake.
Tencent games are in danger and are in urgent need of growth
When the "intruder" returns, will the "big brother" definitely sit on the top of the mountain? not necessarily.
Although Tencent's position in the domestic game industry is currently unshakable, it does not mean that there are no crises, especially for the ace "Honor of Kings".
Any game product has a life cycle, and "Honor of Kings" is no exception. In the more than eight years since its birth, the product developed rapidly in the first few years. Later, it was affected by new forces such as game mechanics, official supervision, krypton gold strategies, and MiHoYo's "Genshin Impact" and "Honkai: Star Rail". The growth rate of relevant data has stabilized in the past two years. This is obviously not a good sign.
Data source: QuestMobile
Even though "Honor of Kings" is still the well-deserved game overlord today, revenue is only related to itself, and vertical growth is the key. Furthermore, as an industry leader, the vitality and IP value chain of "Honor of Kings" represent the development of Tencent Games and even the entire gaming industry to a certain extent.
According to QuestMobile user data, in the first half of 2023, the average monthly active users of "Honor of Kings" were 140 million, ranking first in the game category. This number has failed to achieve significant growth compared with the past. It was 150 million in December 2022, 160 million in January 2022, and between 130 million and 170 million per month in 2021. At its peak, monthly activity could reach 200 million+.
Data source: QuestMobile
According to SensorTower data, in November 2023, the total revenue of "Honor of Kings" in the global AppStore and Google Play reached US$193 million, making it the best-selling mobile game in the world. But similarly, the year-on-year and month-on-month declines are both declining. In October 2023, this data was 222 million US dollars, a month-on-month decrease of 13.06%; in November 2022, this data was also over 200 million US dollars.
The data speaks for itself, whether it is monthly activity or overall revenue. Before Tencent can truly find the next national-level IP, "Honor of Kings" needs to find new growth.
Increment is nothing more than improving user stickiness and attracting new users. In this regard, breaking the ice with Douyin is obviously one of the breakthroughs of "Honor of Kings".
First, as a top-level live broadcast and short video social platform, Douyin is the best promotion channel for content. In addition, its users span a wide age range. It can not only harvest scattered users for "Honor of Kings", but also evoke the memories of old users, enhance the gaming emotions of existing users, and increase user stickiness with high density.
The second is the influence of the international version of TikTok overseas. This is a very critical point and meets the rigid demand of "Honor of Kings" to expand its overseas territory.
When the growth rate of the domestic market approaches stability, "Honor of Kings" has already targeted overseas growth.
Data captured through SensorTower on the AppStore and Google Play shows that in November 2022, the global revenue of "Honor of Kings" was more than US$200 million, with domestic iOS market revenue accounting for 95.5% and overseas market revenue accounting for 4.5%; in 2022 In December, the global revenue of "Honor of Kings" was US$200 million, with domestic iOS market revenue accounting for 94.4% and overseas revenue accounting for 5.6%; in January 2023, "Honor of Kings" global revenue was US$250 million, with domestic iOS market revenue accounting for 94.1% and overseas market revenue accounting for 5.9%. In comparison, overseas markets showed slight growth month by month.
In March 2023, "Honor of Kings" dropped a blockbuster in overseas markets - the international server of "Honor of Kings" ("HoK") was launched in Brazil. This is the first overseas market that Tencent Games will land in after announcing the launch of "HoK" in 2022.
In view of the previous announcement and warm-up, "HoK" performed very well at the launch of the server. After it was launched, it quickly topped the free list, ranking above the most popular battle royale game "FreeFire" in Brazil.
Previously, "Honor of Kings" had launched an overseas special version of "Arena of Valor" ("AoV"), but it failed to receive widespread attention globally, and the main users were concentrated in Southeast Asia.
In order to further develop overseas markets and accelerate the globalization of the IP value of "Honor of Kings", Tencent Games specially developed "HoK". Combined with activities such as the "Honor of Kings" global competition and the continued promotion of "AoV", it can be seen that Tencent Games is using "Honor of Kings" as its flagship and increasing its horsepower to carry out global "navigation" operations.
Judging from the data, the effect of the action is significant. SensorTower data shows that "Honor of Kings" revenue in November 2023 was US$193 million, with domestic iOS market revenue accounting for 45.6% and overseas market revenue accounting for 54.4%. This shows that the overseas market has surpassed the domestic market and has become the main revenue component of "Honor of Kings".
To sum up, at this time, "Honor of Kings" is taking advantage of Douyin and TikTok to simultaneously boost domestic demand and overseas markets. It is a good deal no matter how you look at it. Even in comparison, in this "ice-breaking" journey, perhaps "Honor of Kings" has even more revenue than Douyin.
Ideas must come before actions, and Tencent Games, which has a high sense of risk, will not do anything without foreshadowing. This Douyin live broadcast of "Honor of Kings" is actually not the beginning of "Touteng Reconciliation", everything seems to be a matter of course.
Before the official announcement of the cooperation between "Honor of Kings" and Douyin, Tencent Games had been testing the waters for two years: it launched some advertisements in 2021; and launched larger-scale cooperation in 2022. For example, "Dark Zone Breakout" cooperated with hundreds of bloggers including Douyin platform, "Tencent Princess", and "QQ Dance" series virtual spokesperson Xing Tong parachuted into Douyin live broadcast room, and the franchise platform created the "Stars Project" around virtual live broadcast.
The results of the water test are obviously satisfactory to both companies, otherwise the upgrade will not continue in 2023. Therefore, with the benefit of the Douyin live broadcast of "High Energy Heroes" and "Yuanmeng Star", "Glory of the King" is here.
We can make a bold guess. Based on two years of testing the waters, it is likely that Tencent first offered an olive branch to ByteDance, prompting ByteDance to abandon its self-developed game business. However, the relevant process is no longer important. The two leading Internet companies decided to join hands and refine their "nirvana", which is highly beneficial to both parties and the industry.
After all, only by knowing the way to advance from retreat can a arrogant general become a strategizing commander. Also, 1VS1battle is not as good as "1+1>2".