08/22 2024 356
Produced by Radar Finance | Written by Meng Shuai | Edited by Deep Sea
On August 20th, the spotlight of the Chinese internet undoubtedly fell on the domestic 3A game masterpiece, "Black Myth: Wukong".
On its first day of release, "Black Myth: Wukong" shattered the record for the highest concurrent online players on the Steam platform, previously held by "Cyberpunk 2077", catapulting it into the spotlight of the single-player game scene. Even among all Steam games, "Black Myth: Wukong" ranked second only to "PlayerUnknown's Battlegrounds" in terms of concurrent online players.
According to the game's producer, Feng Ji, the development cost of "Black Myth: Wukong" was substantial, costing at least 300 to 400 million yuan. Some media outlets estimate that based on the game's price, at least 3 million copies would need to be sold to break even.
However, according to statistics from the best-selling domestic games list, within just one day, the total sales of "Black Myth: Wukong" across multiple platforms exceeded 4.5 million copies, with total sales exceeding 1.5 billion yuan, easily surpassing the break-even point. Goldman Sachs even predicted that the game would sell 20 million copies on Steam, generating over 5 billion yuan in revenue.
Feng Ji, who created the blockbuster game "Black Myth: Wukong", has a story as intriguing as a novel. From once abandoning his graduate school aspirations to become a "gamer" to joining the gaming industry, and eventually becoming a member of Tencent's "Dou Shen Zhan" project team, Feng Ji ultimately chose an unknown entrepreneurial path, leaving Tencent with a few old colleagues to found Game Science.
After establishing Game Science, Feng Ji's team created two games, "Bai Jiang Xing" and "War of Art: Red Tide". It wasn't until August 2020, when the first 13-minute gameplay demo of "Black Myth: Wukong" was released on Bilibili, that Game Science became a star in the gaming community.
Radar Finance notes that during Feng Ji's entrepreneurial journey, Game Science not only gained recognition from cooperative publisher Hero Entertainment but also attracted financial support from Tencent, the former employer, with both becoming shareholders of Game Science at different times.
In fact, the popularity of "Black Myth: Wukong" extends beyond the gaming community and social media platforms, spilling over into the capital market. On August 20th, stocks of Zhejiang Publishing Media Group, which is involved in the game's publishing, as well as CITIC Press, which will publish the game's artbook, and Huayi Brothers, which holds a small indirect stake, all saw significant gains.
Furthermore, brands such as Hisense, Lenovo, JD.com, DiDi Qingju, Zhitai, and Jikos Industry have also increased their visibility through partnerships with "Black Myth: Wukong". As a labor model in collaborations, Luckin Coffee's joint product with "Black Myth: Wukong", "Tengyun Americano," was in high demand.
The traffic and capital frenzy sparked by "Black Myth: Wukong" may just be beginning...
"Black Myth: Wukong" officially launches, igniting the domestic 3A game scene
At 10 am on August 20th, the highly anticipated domestic 3A game masterpiece, "Black Myth: Wukong," officially unlocked and launched. Upon its release, the game attracted a surge of players, causing Steam's servers to crash. Within an hour of its official release, the game surpassed "CS2" to top Steam's most popular games list.
Three hours after its launch, "Black Myth: Wukong" surpassed 1.44 million concurrent online players, ranking fourth on Steam's all-time concurrent player list, surpassing classics like "Elden Ring," "Cyberpunk 2077," and "DOTA2," and setting a new record for concurrent online players in single-player games.
By the evening of August 20th, the number of online players of "Black Myth: Wukong" continued to climb, peaking at over 2.2 million, surpassing "Monster Hunter Rise" released in January this year, ranking second in Steam's all-time peak concurrent player count, behind only "PlayerUnknown's Battlegrounds" with 3.2572 million.
Simultaneously, various memes surrounding "Black Myth: Wukong" swept across social media platforms, with multiple topics related to the game trending on various platforms.
As of press time, the hashtag "#Black Myth Wukong#" alone has attracted over 2 billion views on Weibo, while videos under this hashtag have garnered an astonishing 10 billion+ views on Douyin.
To allow employees to experience the game firsthand, several companies even declared a holiday for the launch of "Black Myth: Wukong." The game's popularity has also spread overseas, as its story is based on the well-known Chinese classic "Journey to the West," prompting foreign netizens to quickly catch up on the backstory of this "monkey."
According to Feng Ji, the producer of the game, the hourly development cost of "Black Myth: Wukong" exceeds 20 million yuan. The team estimates the overall game length to be over 20 hours, requiring a development cost of at least 300 to 400 million yuan.
Radar Finance understands that "Black Myth: Wukong" comes in four versions: a digital standard edition priced at 268 yuan, a digital deluxe edition priced at 328 yuan, a physical deluxe edition priced at 820 yuan, and a physical collector's edition priced at 1998 yuan. Some media outlets estimate that based on these prices, Game Science needs to sell at least 3 million copies to break even.
However, Game Science can now rest easy about the break-even point for "Black Myth: Wukong." Data shows that a month before the game's official release, pre-sales exceeded 1.2 million copies, generating pre-sales revenue of over 400 million yuan.
According to statistics from the best-selling domestic games list, as of August 20th evening, sales of "Black Myth: Wukong" on Steam alone exceeded 3 million copies, with total sales across WeGame, EPIC, and PS platforms surpassing 4.5 million copies and total sales exceeding 1.5 billion yuan.
For perspective, the first half of 2024 saw domestic console game market sales of 797 million yuan, highlighting the remarkable performance of "Black Myth: Wukong."
In a recent report, Goldman Sachs noted that the popularity of "Black Myth: Wukong" represents a significant turning point for the Chinese console game industry and a crucial step towards globalization for Chinese games, potentially stimulating investment in the sector, particularly in 3A games.
Regarding sales projections for this blockbuster game, Goldman Sachs estimates that using a conservative 7x conversion ratio (from Steam PCCU to PC sales), under a base scenario, "Black Myth: Wukong" could sell over 12 million copies on Steam, generating over 3 billion yuan in revenue. In an optimistic scenario, sales could reach 20 million copies, generating over 5 billion yuan in revenue, excluding sales on WeGame and PlayStation platforms.
Where did this game-shaking "monkey" come from?
The high level of attention garnered by "Black Myth: Wukong" is due to its status as the first true 3A game (referring to games with high development costs, long development cycles, and excellent production values) in China.
So, who created this blockbuster single-player game? Radar Finance learned that the game was developed by Game Science, with its founder Feng Ji overseeing the game's journey from inception to its official release.
According to the official website of "Black Myth: Wukong," the game's copyright is owned by Youke Interactive Technology Co., Ltd. Tianyancha shows that there are three mainland-registered companies with the name Youke Interactive Technology, established in 2014 (Shenzhen), 2018 (Hangzhou), and 2021 (Tianjin), respectively.
Radar Finance notes that all three companies are legally represented by Feng Ji. Hangzhou Youke Interactive is a wholly-owned subsidiary of Tianjin Youke Interactive, which in turn is wholly owned by Shenzhen Youke Interactive. Feng Ji is the beneficial owner and actual controller of Shenzhen Youke Interactive, holding a final beneficial shareholding ratio of 44.1%.
Feng Ji, the founder and CEO of Game Science, graduated from Huazhong University of Science and Technology with a degree in Biomedical Engineering. A young "gamer" with a strong interest in games, Feng Ji reportedly abandoned his graduate school aspirations due to his obsession with "World of Warcraft."
However, reality called, and in 2005, Feng Ji joined a small game company before transitioning to Tencent's "Dou Shen Zhan" project team as the lead planner three years later.
"Dou Shen Zhan" was a West Journey-themed online game developed by Tencent. The team spent five years crafting the game, inviting renowned online novelist "Jin He zai" to construct its worldview and even investing heavily in a pre-rendered CG trailer produced by the Avatar team.
Although the game achieved a 99.7% activation rate and 90% user satisfaction during its closed beta in 2012, considered one of the most promising games at the time, it failed to generate substantial returns, eventually falling into mediocrity.
In 2014, Feng Ji left Tencent to establish Game Science. Before founding the company, the team felt that the gaming industry in China was far from being a science (analogous to the telecommunications or computer industries) but rather rife with success stories reverse-engineered from current successes.
However, the Game Science team believed that gaming, like other industries, was a rigorous discipline requiring 99% hard work and 1% inspiration, rather than a gamble based on trends. With this belief, Game Science was born, with the name embodying the fusion of gaming's fun and playfulness with scientific rigor and precision.
Before embarking on the "Black Myth: Wukong" project, Game Science created games like "Bai Jiang Xing" and "War of Art: Red Tide." While these games paled in comparison to the popularity of "Black Myth: Wukong," their quick revenue generation laid a solid foundation for the company's sustained operations.
In May 2017, Hero Entertainment (now Hero Games), the publisher of "War of Art: Red Tide," invested 60 million yuan through its wholly-owned subsidiary Hero Financial Holdings to acquire a 20% stake in Game Science, valuing the company at approximately 300 million yuan at the time.
When discussing "Black Myth: Wukong," Feng Ji's enthusiasm is palpable. He believes that if a player has no prior experience with action-adventure games, "Black Myth: Wukong" will be their first love, captivating them with its genre. Feng Ji revealed in an interview that he launched the project eight years ago, convinced that a domestic single-player game market would not only exist but thrive in China.
According to Feng Ji, in 2016, the US single-player game market was worth $10 billion, Japan's was $5 billion, while China's was less than $100 million. He predicted that within 10 to 15 years, China's single-player game market would reach or exceed Japan's size.
Driven by the team's aspiration to create a true single-player game, "Black Myth: Wukong," code-named "B1," embarked on its journey. In August 2020, the game released its first 13-minute gameplay demo on Bilibili, instantly capturing the attention of the gaming community. Within two hours, the video soared to the top of Bilibili's trending list and has since amassed over 58 million views.
Interestingly, the demo video's original intent was to recruit talent and promote the game, but it unexpectedly garnered widespread attention. Originally anticipated to reach 500,000 views, the video ultimately surpassed that target by over 100 times, prompting Feng Ji to call it a "lucky accident."
Feng Ji recalled that day as passing exceptionally quickly, with unread messages piling up on his WeChat. To maintain the stability of the official website, he even topped up the server three times.
Feng Ji also disclosed that following the release of the "Black Myth: Wukong" demo video, his former employer, Tencent, quickly organized a team to visit Game Science, and both parties reached a cooperation agreement. During the game's development in 2021, Tencent acquired a 5% stake in Game Science through capital increases, while Game Science maintained its independent operations.
As time passed, anticipation for the official release of "Black Myth: Wukong" grew among players. While the excitement delighted Feng Ji, it also brought greater pressure. He feared that the game's final quality would not meet expectations, acknowledging that "Black Myth: Wukong" was fortunate to have a high starting point but also faced a steep drop.
To live up to expectations, the team worked tirelessly to refine the game. According to Game Science's recruitment page, its founding team members all came from Tencent Interactive Entertainment's in-house studios, averaging 13 years of industry experience and over 10 years of collaboration. Currently, Game Science has studios in Shenzhen and Hangzhou.
Over the years leading up to its official release, "Black Myth: Wukong" continued to build momentum, culminating in an internet sensation upon its August 20th launch, igniting a celebration across the industry.
"Black Myth: Wukong" sparks a capital frenzy; who will share in this feast?
Behind the dazzling success of "Black Myth: Wukong," who will share in this capital feast?
In addition to Game Science, the game's producer and copyright owner, benefiting handsomely, several listed companies have also reaped the rewards of this game. Since the official launch of "Black Myth: Wukong" on August 20th, Zhejiang Publishing Media Group saw two consecutive trading days of limit-up gains on August 20th and 21st.
Zhejiang Publishing Media Group's connection to "Black Myth: Wukong" stems from its subsidiary, Zhejiang Publishing Group Digital Media Co., Ltd., which serves as the game's publisher. On August 16th, Zhejiang Publishing Media Group stated on an investor interaction platform that its subsidiary is responsible for content review, publishing declarations, and ISBN acquisition for "Black Myth: Wukong."
However, Zhejiang Publishing Media Group also disclosed on the investor interaction platform that it provides game review and publishing services for "Black Myth: Wukong" but does not participate in revenue sharing or the game's merchandise.
When asked about potential future collaborations with Game Science, Zhejiang Publishing Media Group responded that its subsidiary, relying on its game review and publishing qualifications, aims to deepen cooperation with game developers and enhance the quality of game publications.
Not only Zhejiang Publishing Media Group's share price was impacted positively by the launch of "Black Myth: Wukong." On August 20th, CITIC Press shares surged 20.02% from the previous trading day, potentially linked to rumors that CITIC Press would participate in publishing the "Black Myth: Wukong" artbook.
In response, staff from CITIC Publishing's Securities Department stated that CITIC Publishing is one of the companies producing merchandise for "Black Myth: Wukong" and will publish a collection of settings for the game. The collection is tentatively scheduled for release around November. The company has signed relevant contracts, but there is currently no more information to disclose. Further updates will be based on company announcements.
Due to the popularity of "Black Myth: Wukong", many investors have inquired about whether the company has collaborated with the game. In response, CITIC Publishing also stated on the investor interaction platform that please refer to the information disclosed on the company's official channels.
In addition to the two aforementioned listed companies, Huayi Brothers, whose performance and share price have not been ideal in recent years, has also joined the capital feast by taking a stake in Yingxiong Interactive. According to public equity information, Game Science received an investment from Yingxiong Interactive in 2017, holding a 19% stake.
According to Yingxiong Interactive's 2022 financial report, it sold all its 19% stake in Game Science in 2022 for a transfer price of 480 million yuan. Of this, 280 million yuan was received and completed the transaction that year, and the remaining 200 million yuan will be paid no earlier than April 1, 2025.
However, due to no change in the shareholding information, Yingxiong Interactive remains the nominal shareholder of Game Science. On Yingxiong Interactive's official website, Game Science is still listed as one of its top three star investment projects, alongside Kuro Games and VSPN.
Currently, Huayi Brothers holds approximately 74.1836 million shares of Yingxiong Interactive, accounting for approximately 5.17% of Yingxiong Interactive's total share capital. If calculated based on Yingxiong Interactive's 19% shareholding, Huayi Brothers indirectly holds only about 1% of Game Science's equity. Nevertheless, due to the impact of the launch of "Black Myth: Wukong", Huayi Brothers' share price increased by 19.9% and 19.03% on August 19 and 20, respectively.
Based on "Black Myth: Wukong"'s impressive performance in the market, many investors have bombarded Huayi Brothers with questions on the investor interaction platform, such as "Will the success of 'Black Myth: Wukong' positively impact your company's performance?" and "Will the company's stake in Yingxiong Interactive significantly impact its earnings after the launch of 'Black Myth: Wukong'?" However, as of press time, Huayi Brothers has not provided a clear response.
Moreover, Luckin Coffee, which has been enthusiastic about collaborations in recent years, also joined in the "Black Myth: Wukong" craze promptly. On August 19, the day before "Black Myth: Wukong"'s launch, Luckin Coffee and "Black Myth: Wukong" jointly launched the drink "Tengyun Americano", which quickly sold out along with its 3D poster bundle.
That afternoon, Luckin Coffee issued a "Restock Notice" stating that consumer enthusiasm far exceeded team expectations, and limited-edition posters had quickly been added to the restock plan. The next batch would take 15 days to produce. Seeing the overwhelming response to the "Tengyun Americano" collaboration, Luckin Coffee's Chief Growth Officer (CGO) Yang Fei remarked on social media, "The merchandise sold out instantly nationwide, almost crashing the system. Men's purchasing power this morning blew our team's mind," adding in the comments, "More reliable than 10 Father's Days."
According to incomplete statistics, multiple brands, including Hisense, Lenovo, JD.com, Didi Qingju, Zhitai, and Jikousi Industry, have also established collaborations with "Black Myth: Wukong" across different business or product levels.
What further adventures will this already famous "monkey" embark on in the gaming world? Radar Finance will continue to keep a close eye on it.