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EQS-News: How Firerock Holdings Becomes 'An Incredible Player' among All the Giants

EQS-News / 09/04/2021 / 18:24 UTC+8



Like the chaos land that heroes come to in the plot, domestic games are experiencing their own periods of chaos, growing with pains and transition. As an axe hacks, the patterns of different colors flow on each inch of the cross section of the boulder. In this huge market, Tencent and Netease still stand up, and small and medium-sized game manufacturers are also unstoppable to draw the sword.


Of the 278.687 billion yuan of China's game market revenue in 2020, Tencent and Netease took away 15.1 billion yuan, and 54.61 billion yuan respectively, and still almost monopolized the domestic market. But under the shadow of the two giants, the small and medium-sized forces with different styles such as miHoYo, Lilith, verycd, CMGE, Jiaxianghudong, and Firerock Holdings have made great achievements in breaking out of an encirclement.


The phenomenal Genshin Impact has pulled the "Honor of Kings" down the throne, and TapTap that declared war against the traditional distribution channels, as well as FunPlus, Firerock Holdings set sail to the markets abroad and fulfilled their potentials. Each unique play method makes the market new and refreshing, which also dilutes the control of the old brand game producers.


In nature, the bigger body type the animal has, the narrower its perspective will be. The bigger body type the animal has; the more blind spots are there for it. In the field of games, the blind spots of giants are opportunities for latecomers.



Last year, the Genshin Impact of independent game company miHoYo swept the global game market, bringing about $240 million in revenue in its first month of coming out. Global mobile game revenue ranking from the the competition between two giants of "Playerunknown's Battlegrounds" and "Honor of Kings" into "Competition of Three Kingdoms". Just a few months after it was launched, the revenue of "Genshin Impact" in the global multi-platform exceeded that of "Honor of Kings" in the same period of time.


From "Honor of Kings" to "Genshin Impact", it is not only about the rise and decline of the two games, but also the evolution of domestic games from the rough to the fine. The pace of the game industry towards the content-oriented era is irreversible. Under the polishing of refinement, even the segmented vertical track with limited attention from the mainstream market before also broke out an amazing volume. Similarly, the successful Rise of Kingdoms, AFK Arena, Strategic Edition of the Annals of the Three Kingdoms and Arknights have repeatedly confirmed this conclusion.


Driven by the high-quality vertical segmentation content, it is natural for independent game manufacturers to change the traditional traffic channel, and the vertical channel arises at the historic moment. The "zero share" mode of TapTap platform of verycd company provides the distribution channel with the highest CP gross profit rate for game developers. With its fair scoring and high-quality user ecology, verycd company breaks through the shackles of the past resource and flow distribution system, which is more attractive to both game developers and game users. It is inevitable to encroach on the marketing distribution system of old producers


In 2020, the average monthly active users of TapTap's Chinese version of mobile app are 25.7 million, with a year-on-year growth of 43.7%, the number of game downloads is 407.6 million, with a year-on-year growth of 15.8%, and the number of new postings is 5.8 million, with a year-on-year growth of 64.0%. Although there is still a big gap between the user volume and traditional channels, its vigorous community vitality and growth potential are incomparable for traditional channels. IGG, ByteDance, miHoYo, Lilith, Papergames, Bilibilitv and Alibaba, which think highly of the value of TapTap, have successively bought shares. With strange harmony, verycd has realized the deep binding from CPs, publishers to channel players, and obtained the market estimation of over HK $24.4 billion.


In the meantime, the overseas market became the highlight stage of domestic small and medium-sized game enterprises in 2020. According to the data of Qianzan Industry Research Institute, the foreign sales revenue of China's self-developed games in 2020, reached 15.45 billion US dollars for the first time, with a year-on-year growth of 33.2%, realizing a new scale breakthrough. In terms of volume, the further released overseas market has contributed billions of dollars to Lilith and FunPlus, making them surpass Tencent and Netease as "the Kings" in the overseas market. In terms of increment, small and medium-sized enterprises represented by Firerock Holdings have been deeply engaged in overseas market since the beginning. In 2020, ita revenue increases by 71.3% and its net profit increased by 65.9%, far exceeding the average level of the industry.


Compared with the top echelon of small and medium-sized companies, Firerock Holdings' breakthrough strategy may provide reference for the majority of small and medium-sized game manufacturers.


Established in 2011, Firerock Holdings is actually a senior veteran of the game industry, whose predecessor is Shenzhen Domain established in 1997.


Opening "Tencent Biography", the original chapter pertaining to Domain should be ignored. As the first batch of domestic game companies, the Domain occupied the south market, and the number of active users per day of the platform in 1997 can reach 280000 person-times.


Tencent has a close relationship with the Domain, which can be seen from a loan of RMB 73.1 million from Ma Huateng, person in charge of Tencent in 2008 to Zhang Yan, the former CEO of the Domain and now the Chairman of Firerock Holdings for helping him increase his shares in the Domain. In 2010, Tencent formally acquired 100% of the equity in the Domain and e...

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