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Sunday, November 27, 2022

What are the reasons why the game publisher 37 Interactive Entertainment exceeds miHoYo?

Third party data organization data ai recently released the revenue list of chinese game manufacturers and applications in October. The list shows that 37 Interactive Entertainment jumped to the top of the list of Chinese game manufacturers’ overseas revenue in October for the first time. Before that, 37 Interactive Entertainment had been hovering around the fifth place and never entered the first place.

37 Interactive Entertainment released its annual report at the beginning of this year. The report pointed out that 37 Interactive Entertainment’s goal this year is to become the top player, but in fact, it is far more than expected. The first player has won the first place. Looking back on its development over the years, 37 Interactive Entertainment began to deploy overseas and enter the overseas market in 2012. After six or seven years of development, it is still tepid, Overseas revenue accounts for only 15% of the company’s total revenue. We can see the growth trend of 37 Interactive Entertainment in recent years.

Since 2018, 37 Interactive Entertainment has started to adjust its overseas layout strategy according to the actual situation, and the situation has improved significantly and steadily year by year. It has been crowded into the first echelon since it was unknown. All of this comes from 37 Interactive Entertainment’s change in the concept of overseas development. At present, overseas revenue has accounted for 40% of the total revenue of 37 Interactive Entertainment.

Games Covered in Top 30 Revenue List

In addition to the top of the list of manufacturers’ revenue from going to sea, 37 Interactive Entertainment also won three seats in the top 30 list of revenue from going to sea games in October.

Puzzles & Survival, ranked No. 4 on the list, has been online for two years since 2020. As the first “blockbuster” after 37 Interactive Entertainment changed its outbound strategy in 2018, the game took the lead in entering the markets of Europe, America and Japan, where its audiences are targeted, with its three elimination+SLG playing method and zombie theme. Shortly after its launch, it was listed in the top 50 best-selling lists in many European and American regions, and won the first place in the download double list in Japan.

In this product, we can already see the market differentiation of 37 Interactive Entertainment’s propaganda ideas. In the early release, among the various zombie theme SLGs in the American market, 37 Interactive Entertainment’s advertising materials downplayed the common elements of “construction” and “confrontation”, but amplified the elements of “escape” and “pursuit” in theme to attract more potential users, In the Japanese market, localized special events and customized content are adopted to cater to local players.

And Cloud Song, which ranked 23rd in the revenue list, ranked second to Puzzles & Survival. The game went to South Korea in 2021, and successfully entered the second place in the Korean game Top5 in February this year. Sensor Tower once calculated that the revenue of the game in the first half of 2022 exceeded 60 million dollars, ranking first in the top revenue list, and its performance in South Korea even exceeded that of Genshin Impact.

Ant Legion, which was just launched this year, ranked 11th in the revenue growth of Sensor Tower in May. In the card category, there is also the Doula Continental Soul Master Duel platform, which has achieved relatively good results in Asia since it was launched more than a year ago.

Trading legends, a rare proxy for a simulated management category, should not be ignored either. After launching in Japan, South Korea and Southeast Asia, the game was localized for each market. This localization approach is still very effective today, with Trading Legends being promoted in Japan, Korea, and Southeast Asia, etc. is into the top best sellers list upon launch. Meanwhile, the game is available in the Redfinger cloud phone as well. A large number of users are likely to adopt the platform to enjoy playing the game, according to the specific data released by Redfinger.

There are many games that do not appear in the list, but have perfect content. Ant Legion – slg games – launched this year, ranked 11th in the SensorTower revenue growth ranking in May. Doula Continental Soul Master Duel – card class – still has a great performance in Asia for more than a year.

Publisher’s Top-notch Development Trend

The strong momentum of 37 Interactive Entertainment this year can be found as early as the first half of 2022. Against the backdrop of the downturn in the entire game industry, the publisher stood out with a net profit of 1.695 billion yuan in the past six months, up 98.56% over the same period last year. Overseas revenue was 3.033 billion yuan, up 48.33% year on year.

The breakthrough in overseas market comes from the change of overseas development concept in 2018. At the initial stage, the strategy of “follow the product”, which only relies on localization to put the product into different markets, has no effect. Therefore, from 2017 to 2018, its overseas revenue was less than US $1 billion, accounting for less than 15% of the total revenue.

In 2018, 37 Interactive Entertainment changed its strategy and began to choose the distribution mode of products according to local conditions. During game localization, different types of games can be distributed to different regions according to the characteristics of different markets. At the distribution level, the company also distinguishes between game content and promotional materials.

In 2019, after accumulating distribution experience in Europe, America, Japan and other countries, the company embarked on the fast train of overseas revenue growth from 2020. With Puzzles & Survival, Cloud Song, Trading Legend and other different types of games gradually going overseas, the overseas revenue in 2020 and 2021 will increase by 104.34% and 122.94% respectively year on year.

On the other hand, the ability of independent research has been further enhanced and upgraded to the direction of diversification and globalization. In addition to developing products in the MMO and ARPG categories, the publisher also began to try other categories of products, including SLG, three elimination games, cards and simulation management.

The company’s executives said in May this year that the company is currently considering the global distribution plan of the game. The Asian market focuses on strengthening MMO and card games, while the European and American markets will make breakthroughs in SLG category in the next two years.

As per the semi-annual report of 2022, 26 games are disclosed, including 8 self-research products, all of which are selected for two-way distribution at home and abroad. Besides, MMORPG, SLG, card, and simulation categories also have a total of 16 new products aiming to release overseas. With its precise overseas development philosophy, the publisher may have considerable growth momentum in the future.

Next Goal: Maintain the Leading Edge or What?

Looking back, 37 Interactive Entertainment has indeed made new achievements in this year’s transformation. However, taking miHoYo, Tencent and other companies that have also been rampant overseas in recent years as examples, it is still a huge challenge for publishers to maintain their leading edge in this field.

Among many uncertain factors, 37 Interactive Entertainment still has a long way to go. However, publishers still have room for growth. It can be found that the attitude of enterprises going abroad is steady, not aggressive. With the listing of many products, the expansion of 37 Interactive Entertainment’s overseas business line may usher in a good prospect in 2023.

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