miHoYo's commercial myth created by the two phenomenal blockbuster games &#34;Genshin Impact&#34; and &#34;Honkai: Star Rail&#34; (hereinafter referred to as &#34;Star Rail&#34;) has begun to show cracks.
Two weeks ago, the highly anticipated &#34;Absolute Zero&#34; was officially launched. This game broke miHoYo's own record with 46 million reservations during the testing phase, and it topped the free iOS charts in over a hundred countries on the eve of the public beta, already raising players' expectations to the highest. The market widely regarded it as the most likely new game to become the &#34;next Genshin Impact&#34;.
However, after the public beta, the reputation of &#34;Absolute Zero&#34; took a surprising turn. On the first day of its release, related Weibo topics such as &#34;Absolute Zero is boring&#34; trended.
&#34;As an action game, the combat is always basic attacks plus dodging, switching personalities to block and accumulate energy, and the gameplay of walking on grids lacks any fun of exploration and puzzle-solving. I don't even know what I'm playing,&#34; miHoYo veteran player Wu Bo told Time Finance. After experiencing it meticulously for 17 hours, he eventually uninstalled &#34;Absolute Zero&#34; completely and quit the game.
The general dissatisfaction among players led to a rapid decline in the rating of &#34;Absolute Zero&#34; after its release. On the game player community TapTap, the rating of &#34;Absolute Zero&#34; dropped from a high score of 9 before the public beta to a low point of 5.4, and as of the time of writing, the rating of &#34;Absolute Zero&#34; is only 6.3. Its ranking on the iOS bestseller list has also dropped to around 25.
According to the third-party data monitoring agency DotData's estimate, from July 4th to July 18th, within 15 days of the game's release, &#34;Absolute Zero&#34; successfully generated over 118 million yuan in revenue through the iOS channel in China.
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Performance of &#34;Absolute Zero&#34; in revenue within 15 days of its release, compared with other new games and miHoYo's other products during the same period, image source: DotData screenshot
If it were not a miHoYo production, any game achieving such results might not be considered a failure. However, compared to the brilliance created by &#34;Genshin Impact&#34; and &#34;Star Rail&#34; in the past, &#34;Absolute Zero&#34; still falls short. DotData shows that &#34;Star Rail&#34;, launched in April last year, generated over 233 million yuan in revenue within the first 15 days on the iOS platform in China.
For a while, discussions about whether &#34;Absolute Zero&#34; failed or not were heated. While various parties were arguing fiercely on the internet, miHoYo, as always, did not respond or make any adjustments. Regarding negative player feedback, whether the performance of &#34;Absolute Zero&#34; met expectations, and future strategic planning, miHoYo responded to Time Finance, &#34;We are unable to provide a response.&#34;
So, did miHoYo drop the ball this time?
Betting on Art, Gameplay is Biased
Unlike the grand settings of &#34;Genshin Impact&#34; and &#34;Star Rail&#34; with the twin encounters in a different world or the crisis of the universe's star nucleus, and the infinite exploration of an open-world map, &#34;Absolute Zero&#34; tells a smaller-scale story. In the game, players will play as a brother and sister running a video store on a commercial street, living in a near-future world invaded by a supernatural disaster called &#34;Void&#34;
Outside the video store, players play as siblings who also work part-time as guides to lead unofficial individuals into hollow explorations, and engage in combat with monsters in the hollow by controlling avatars to complete various tasks. Therefore, action-packed battles with a &#34;meat pigeon&#34; color have become the core gameplay of &#34;Absolute Area Zero&#34;.
This is a relatively niche gameplay type. Game industry analyst Zhang Shule told Times Finance that action games have always been a less explored area in domestic online games, and players have not yet developed gaming habits. The action games currently on the market are actually just various fancy skills, lacking much room for precise control. Even in esports games, the sense of impact is not strong enough.
However, miHoYo has its own ambitions. The game's producer Li Zhenyu has repeatedly emphasized in media interviews that creating a product that allows a broader range of users to experience the fun of action games is the consistent goal of &#34;Absolute Area Zero&#34;.
But problems have arisen as a result. According to Zhang Shenjin, a game planner with ten years of experience, &#34;Absolute Area Zero&#34; may have a serious problem of being too focused. To enhance the game's appeal, &#34;Absolute Area Zero&#34; has created a set of highly attractive American cartoon retro visual style, with distinct independent modeling and design for daily town designs, graffiti on street corners, and inconspicuous NPCs.
At the same time, compared to the dozens of common action modules in ordinary games, which are interspersed between walking, running, jumping, attacking, and being hit, &#34;Absolute Area Zero&#34; is more meticulous. Each character has hundreds of action modules to ensure smooth and silky character movements during combat.
However, while a large amount of resources are focused on art, the performance of &#34;Absolute Area Zero&#34; in terms of gameplay is not satisfactory.
&#34;This may be related to the background of the producer. In the past, miHoYo's games were more planner-led, but the producer of 'Absolute Area Zero' comes from an artistic background. Therefore, it is very obvious that the game has made many compromises for art, resulting in an unbalanced experience,&#34; Zhang Shenjin told Times Finance.
Taking the core combat gameplay as an example, Zhang Shenjin pointed out that in order for the vast majority of players to &#34;enjoy the combat&#34;, &#34;Absolute Area Zero&#34; significantly reduces the difficulty of operation. For example, character skills have almost no cooldown time, so newcomers can continuously output without any burden; and the highly difficult action of counterattacking in other hardcore action games has become simple, allowing players to easily interrupt the opponent's attacks and activate cool close-ups and sound effects.
While these practices can help players who have never experienced action games before to easily get started, they also greatly limit the depth of early-game combat. Hardcore players cannot experience the intense combat thrill, and casual players will quickly become bored with the repetitive operation of &#34;clearing levels with basic attacks&#34;.
To the point where some players jokingly told Times Finance that &#34;Absolute Area Zero&#34; truly deserves to be a AAA game (generally referring to a heavyweight blockbuster game with high development costs, long development cycles, and resource consumption), &#34;because its main gameplay experience is 3 characters, constantly using A (i.e., basic attacks) back and forth&#34;.
In Zhang Shenjin's view, unlike miHoYo's previous works, &#34;Absolute Area Zero&#34; itself has a slower pace and is more like an old-fashioned game that requires time to explore and experience. &#34;In the current environment where players are becoming increasingly impatient, many players may not adapt to this slow-paced rhythm, and since the game's excitement curve is gentle, they may find it uninteresting
The Test After Cai Haoyu's Resignation
The imbalance behind &#34;Lost Ark&#34; may be closely related to the adjustment of miHoYo's management structure.
Tianyancha information shows that in September 2023, miHoYo founder Cai Haoyu officially resigned as the chairman and legal representative of Shanghai miHoYo Network Technology Co., Ltd., and was succeeded by another founder and CEO, Liu Wei.
Before this, the three founders of miHoYo had clear divisions of labor. Cai Haoyu was responsible for product direction, art, and technology; Luo Yuhao was in charge of commercialization and numerical growth; and Liu Wei, known for his versatility, mainly handled operations, recruitment, and other company affairs.
An industry veteran in the gaming industry pointed out to Time Finance that Cai Haoyu has always been seen as the soul figure behind the success of &#34;Genshin Impact.&#34; It is precisely because of his almost obsessive pursuit of game quality that miHoYo was able to invest hundreds of millions of dollars in creating &#34;Genshin Impact&#34; in an uncertain future and ultimately achieve a surprising success in the market.
Although this adjustment did not affect Cai Haoyu's position as the largest shareholder of miHoYo, as he still holds 41% of the shares, far exceeding the 22.595% held by the second largest shareholder Liu Wei and the 21.405% held by Luo Yuhao. However, the change of such a pivotal figure still caused a stir in the market.
<img src="https://imageproxy.pbkrs.com/http://img.jrjimg.cn/2024/07/cms_20240720140328735.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="miHoYo Shareholder Information" original-src="https://imageproxy.pbkrs.com/http://img.jrjimg.cn/2024/07/cms_20240720140328735.jpg"/>
At that time, miHoYo responded to the media by stating that in order to meet the company's future development needs, Cai Haoyu would invest more energy in the research and application of cutting-edge technology, new project development, and the connection of domestic and overseas research resources, while CEO Liu Wei would continue to be responsible for the company's management affairs.
In the view of Zhang Shule, the artistic style of this rising star in the gaming industry has begun to change after Cai Haoyu resigned from positions such as legal person and chairman. Moving away from the &#34;Genshin Impact&#34; model of Blizzard's decade-long refinement, miHoYo is returning to the &#34;Honkai&#34; model of multi-pronged attacks, no longer pursuing absolute perfection before releasing a product.
However, miHoYo has also lost its unique advantage in the gaming market as a result. This has already been reflected in &#34;Lost Ark.&#34; As the first new game released by miHoYo after Cai Haoyu's resignation, the market can clearly feel that &#34;Lost Ark&#34; has attempted innovations in various aspects such as theme, style, plot, and gameplay, but the feedback has not met expectations.
And this is not the only game from miHoYo that has been criticized recently. Over the past year, the decline in quality of &#34;Genshin Impact&#34; is visible to the naked eye, whether it's the controversies surrounding in-game characters like Lumine, Nata, Fischl, Zhongli, and Ningguang, or the increasingly obvious phenomenon of text padding, which has left many users feeling dissatisfied.
This user dissatisfaction has directly impacted the game's revenue. According to DianDian data, in the first half of 2024, the estimated revenue of &#34;Genshin Impact&#34; on the iOS platform in China was 930 million RMB, a decrease of over 37% compared to the same period in 2023, when it was 1.49 billion RMB, and a decrease of over 40% compared to the same period in 2022, when it was 1.573 billion RMB
In addition, the feedback on the second expansion pack of &#34;Honkai Impact 3rd&#34;, which was launched earlier this year, is also not optimistic in the market. This key product that once laid the revenue foundation for miHoYo to fund the development of &#34;Genshin Impact&#34; has now dropped to a low score of only 6.6 on TapTap.
According to data from Point Data, in the first half of 2024, the estimated revenue of &#34;Honkai Impact 3rd&#34; on the iOS platform in China was only 48.2012 million RMB, a 50% decrease from the same period in 2023 of 96.9232 million RMB, and a 60% decrease from the same period in 2022 of 123 million RMB.
Dealing with the series of issues brought about by the departure of key figure Cai Haoyu and ensuring the continuous output of high-quality games are still testing miHoYo.
However, an insider from a gaming company commented to Time Finance, &#34;The revenue of 'Absolute Zero' is actually not bad, it's just that the market's expectations for miHoYo are too high.&#34;
miHoYo Criticized for Being Distant from Players
In fact, miHoYo is facing more than one problem. Negative reviews of &#34;Absolute Zero&#34; on social media by players, as well as the mediocre revenue of the game, are sounding the alarm for miHoYo: the problems that were overshadowed by rapid growth are now beginning to surface.
On one hand, this game company, which was once known for its founding team's familiarity with subculture and close communication with users, has become increasingly distant from players. This is particularly evident in the operation of &#34;Genshin Impact&#34;.
In January of this year, &#34;Genshin Impact&#34; caused dissatisfaction among many players due to the perfunctory Spring Festival benefits of the three &#34;Entwined Fates&#34;, leading to a drop in the official Douyin account's followers from over 11 million to over 8 million in just one week, losing over 2 million followers, and has not recovered to this day.
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Image Source: Douyin screenshot
Wu Bo pointed out to Time Finance that in recent years, the impression most players have of miHoYo has become one of being indifferent to external voices and not caring much about the voices within the player community. &#34;The relationship with miHoYo no longer has that strong emotional connection as it did in the past,&#34; Wu Bo said.
At the same time, with more and more companies entering the subculture game market, the race has become somewhat crowded and saturated, and miHoYo's absolute advantage is gradually being eroded. In this market that is transitioning from growth to stability, it is difficult for miHoYo to find more room for development.
This was already evident after the release of &#34;Star Rail&#34; last year. It is widely believed in the industry that while &#34;Star Rail&#34; demonstrated astonishing revenue-generating capabilities, it also diverted players' enthusiasm and spending budgets from &#34;Genshin Impact&#34;. As a result, these two games under miHoYo have been more of a zero-sum game over the past year, failing to create new growth for the company.
According to analyst Harshal Karvande from market research firm Naavik, in the first quarter of 2024, the total revenue of &#34;Genshin Impact&#34; and &#34;Star Rail&#34; on mobile platforms was 284 million USD, while in the same period last year, a single game of &#34;Genshin Impact&#34; alone contributed 302 million USD in revenue
Game producer Wang Qiong believes that this is currently the biggest problem plaguing miHoYo. During the rapid growth phase in the past few years, miHoYo has already reached the core second-game players, the potential audience of the second dimension, and female users in the traditional second-game market who are rarely actively engaged through games like &#34;Genshin Impact&#34; and &#34;Honkai Impact&#34;. The domestic second-dimension game market no longer has room for growth.
&#34;From this perspective, miHoYo only has two paths ahead: expanding product types and continuing to explore overseas markets. The latter, against the backdrop of current geopolitical issues, is becoming increasingly constrained. Therefore, breaking free from the constraints of the second dimension and seeking new breakthroughs in product categories will inevitably become miHoYo's key focus,&#34; Wang Qiong told Times Finance.
MiHoYo may have already sensed this and started exploring. According to Tech Planet, miHoYo is developing a new life simulation and management game called &#34;Starry Corridor&#34;. Unlike previous second-dimension categories, this game features a cute cartoon style suitable for all ages, similar to the globally popular &#34;Animal Crossing: New Horizons&#34;.
&#34;Absolute Zero&#34;, which aimed to innovate but couldn't escape the limitations of the second-dimension category, didn't kick off miHoYo's new exploration on a good note. However, Zhang Shule believes this may not be a bad thing: &#34;Online games require trial and error, rather than the extreme single product approach of standalone games. Therefore, miHoYo's change in strategy is in line with the trends in the gaming industry and is not contradictory to game refinement. After all, miHoYo is not mass-producing games recklessly but is simply accelerating the pace of trial and error.&#34;
(Upon request by interviewees, Wu Bo, Shen Miao, Wang Qiong, and Zhang Shenjin are pseudonyms)

miHoYo

miHoYo's new game "Absolute Zero" launched for 15 days, successfully generating over 118 million RMB in revenue on the iOS platform in China, with a rating of only 6.3. Compared to "Genshin Impact" and "Honkai Impact", its performance is relatively lackluster

China Finance Online

miHoYo's new product failed? "Genshin Impact" only generated over 100 million in revenue on the iOS platform in the first 15 days, key figure Cai Haoyu stepped down last year