USD 245m of revenue in the first month!

Why Genshin Impact is such a hit and the miHoYo may be a gem in the making...

We had been chatting about video gaming for a while. The reason is that the economics of making and monetising a game make a lot of sense. Even if there is no hit, the company can be highly profitable if they can gain a niche.

Look at FriendTime, it is super niche and highly profitable as a company.

The gaming companies we had focused on usually develop games in the RPG space with the reason that we are familiar with this type of game (these are the type of games we played when we are young!).

A successful RPG game requires a

  • good expansive map to explore with good graphics

  • simple to learn gameplay mechanics

  • deep and immersive storyline to draw the player in

For the game to succeed internationally, the company must seek to

  • have quality gameplay that feels and play like a console game

  • be able to scale across multiple platform (develop using unreal engine from Unity helps)

  • build deep progression system which is fair

Genshin Impact is such an important milestone for Chinese developers as Genshin Impact is the first Chinese developed game that fulfil most of the criteria above, both as a game and as a company.

The ideal RPG development company should have the following

  • a quality mindset while creating new IPs

  • has IP that can be extended (think of Final Fantasy…)

  • ability to extend the IP into multiple platforms and formats

miHoYo as a company had been demonstrating such capability. Unlike FriendTime which everyone is trying to gain higher power to battle to become the strongest within a server, miHoYo had turn the table around and sold items based on love… Love for a virtual character.

By changing the impulse to pay, miHoYo had sort of created a fairer game economics.

miHoYo’s founder Liu Wei had stated that their goal is to extend far beyond video games which will include anime, comics and movie. This is the start of the flywheel and it does not starts with movie but with a console, mobile, PC gaming experience set to also dominate the live of the players.

miHoYo pulled their listing when the Chinese government is not happy with the gaming sector. Now as investors, we are anxiously looking forward to the listing of miHoYo if it happens…

As usual, do hit the comment button below to give us your comments!

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