In November 2022, the third-party data agency data ai released the revenue list of Chinese game manufacturers and applications in October. Its statistical caliber comes from the iOS App Store and Google Play platforms. The list shows that 37 Interactive Entertainment surpassed Tencent, miHoYo and other game manufacturers for the first time, and jumped to the top of the list of Chinese game manufacturers’ overseas revenue in October. It is worth noting that 37 Interactive Entertainment achieved overseas operating revenue of 3.033 billion yuan in the first half of this year, a year-on-year increase of 48.33%, accounting for nearly 40% of the total revenue.
37 Interactive Entertainment has started to lay out its overseas market since ten years ago. However, after years of development, before 2018, 37 Interactive Entertainment’s financial report data showed that the scale of overseas business income was less than 1 billion yuan, accounting for less than 15% of the total revenue, which was far below the standard of the first echelon in the international market. In 2018, the company adjusted its overseas layout from the initial strategy of “following the products” to the strategy of “adapting to local conditions”, that is, focusing on different types of games in different regions according to different market characteristics. At the same time, at the distribution level, in view of different game markets and the characteristics of local users, make differentiation in game content and promotion materials.
In 2019, due to the change of overseas development concept, the company achieved rapid development in terms of revenue, gradually rose to the first tier, and remained in the fifth place. In 2022, 37 Interactive Entertainment has successfully jumped to the top of the list of China’s game manufacturers’ overseas revenue in October.
Games Covered in Top 30 Revenue List
In addition to being at the top of the publisher’s overseas revenue ranking, 37 Interactive Entertainment also made the three games rank in the top 30 in October’s overseas revenue ranking.
Puzzles & Survival, launched in 2020, won the leading position and became the fourth. As the first game with outstanding performance after the change of development concept in 2018, Puzzles & Survival takes the lead in covering the European, American and Japanese markets by matching 3 and SLG with zombie themes. This game was listed on the top 50 bestsellers in Europe and the United States, and then won the first place in the download list in Japan.
The Puzzles & Survival achieved tangible results in the above markets, and in the next two years discovered the development concept of South Korea, Hong Kong, Macao, Taiwan, Southeast Asia and the Middle East. This year’s performance is quite commendable. By the end of October 2022, the global cash flow of the game has reached 5.6 billion yuan, with the highest monthly flow exceeding 330 million yuan. Compared with the accumulated cash flow of 4.2 billion yuan as of June, the game still shows an extremely rapid growth trend.
In addition to Puzzles & Survival, Cloud Song ranks 23rd in the revenue ranking. The game was launched in South Korea in 2021 and won the second place in the top five in February this year. According to the data of SensorTower, the revenue of this game in the first half of 2022 exceeded 60 million dollars, ranking the first in the revenue list. What’s more, its performance in South Korea even exceeded that of Genshin Impact. Later, Cloud Song landed in the Japanese game market and became the top five in the first half of the revenue growth list. So far, this game has performed stably in the top 100 of the best seller list.
The Trading Legend – a rare representative of the analog management category – should not be ignored either. After being launched in markets including Japan, South Korea and Southeast Asia, the game has also been localized according to different markets. Moreover, this set of localization methods is quite effective. There areTrading Legend in Japan, South Korea, Southeast Asia and other places. Once launched, it was listed on the best seller list. At the same time, this game is also available on the Redfinger cloud phone. According to the specific data released by Redfinger, a large number of users may use this platform to enjoy playing games.
There are various games that are not included in the list, but have audio content. Ant Corps – SLG category – launched this year, and this game ranked 11th in the SensorTower revenue growth ranking in May. For more than a year, Doula Continental Soul Master Duel (the card category) still has outstanding performance in Asia.
Publisher’s Top-notch Development Trend
In fact, 37 Interactive Entertainment’s strong momentum this year can be seen as early as the first half of 2022. Under the background of the depression of the whole game industry, the publishers stood out, and the net profit in the first half of the year reached 1.695 billion yuan, an increase of 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 “following the product” and merely relying on localization to put the product into different markets is ineffective. Thus, from 2017 to 2018, its overseas income was less than 1 billion, accounting for less than 15% of the total income.
In 2018, 37 Interactive Entertainment changed its strategy and began to choose the distribution method of products according to local conditions. At the same time of game localization, different types of games can be released to different regions according to the characteristics of different markets. At the distribution level, the firm also differentiated the game content and promotion materials.
In 2019, the company has accumulated distribution experience in Europe, the United States, Japan and other countries. Since 2020, the company is taking the fast train of overseas revenue growth. 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% year on year respectively.
On the other hand, it has further strengthened the capacity of self research and upgraded to diversification and globalization. In addition to developing products in the MMO and ARPG categories, publishers have begun to try other categories, including SLG, Match 3 games, solitaire and simulation management.
Executives of the company 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 should make breakthroughs in SLG category in the next two years.
According to the semi annual report of 2022, 26 games have been disclosed, including 8 self-developed products, all of which are issued domestically and internationally. In addition, a total of 16 new products of MMORPG, SLGs, cards and simulations have also been launched overseas. With its precise overseas development concept, the publishing house may have considerable growth momentum in the future.
Next Goal: Maintain the Leading Edge or What?
Looking back, 37 Interactive Entertainment has made new achievements in transformation this year. However, in the case of miHoYo, Tencent and other companies that have also been rampant abroad in recent years, it is still a big 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 enterprises are gradually going overseas with a steady attitude, rather than a radical attitude. With a large number of products coming soon, 37 Interactive Entertainment’s overseas business line expansion may usher in a good prospect in 2023.
