After nearly a year of focusing on gaming, Chen Rui, CEO of Bilibili, began to make adjustments to the gaming business. Recently, there was news of layoffs and disbandment from the Guangzhou game research and development studio "Xinyuan Interactive" on Bilibili. Ding Qianwei, CEO of Xinyuan Interactive, has resigned. Except for a Japanese anime IP adaptation project "codename QQ13" that was retained due to an external cooperation contract, all other projects have been cut off.
A person close to Bilibili told a reporter from Huaxia Times that the above information is basically true, but the studio has not been disbanded.
As the basis for the listing of Station B, the game business once accounted for more than 80% of the revenue of Station B. After the listing, Station B began to de play. Although it has made some achievements in the anime breakthrough, its profitability is insufficient. The decline of the game status and the pressure of the layout of the country make the profitability and support of the game business fluctuate, which also makes Station B's anime game from a leader to a laggard. Under the goal of breaking even, the top players of Bilibili have started to focus on gaming, and self developed high-quality products have become a key focus of the gaming business.
Guangzhou Game Studio Layoffs
According to the reporter, the adjusted Heart Source Interaction has been included on Bilibili for less than two years. In March 2022, B Station completed the acquisition of Xinyuan Interactive. According to B Station's 2022 financial report, the company entered into a transaction with a game development company in February 2022, signing an agreement to acquire all equity interests in the game business for a total cash consideration of 800 million yuan. After delivery, B Station owns 100% of its game business.
After the acquisition was completed, Xinyuan Interactive became one of the self-developed studios under Bilibili. 21 software works, including the "Legend of the Immortal Sword" IP project, "codename W9", "codename YY16", "Neon Sequence", "My Hero Academy: The Strongest Hero", "Wasp: Abyssal Angel", and the aforementioned surviving project "codename QQ13", were all classified as Bilibili's assets. Ding Qianwei, the founder of Xinyuan Interactive, also joined Bilibili to lead Xinyuan Studio.
Regarding the layoffs at Guangzhou Game Studio, the above-mentioned personnel close to Bilibili stated that Bilibili Games, after being led by Chen Rui, will instead focus on "high-quality self-developed" games and focus on self-developed game projects.
As early as November 2022, Bilibili adjusted its reporting line for gaming business related teams. Specifically, the reporting lines for the B-Station Game Distribution Division, Game Collaboration Division, Game Community Division, Aikosaisi Game Studio, Morningstar Game Studio, Shizhisha Game Studio, and Game Innovation Product Division will be adjusted from Senior Vice President Zhang Feng to CEO Chen Rui, and Zhang Feng will be transferred to other businesses of the company.
Chen Rui stated on the financial report conference call in March this year, "When there is a user dividend, as long as the game content is good, you can definitely make money. However, when the game industry becomes a stock market, there are only two types of games that can make money: the first is the top super game, and the second is becoming the top in the vertical category
B Station will firmly implement the company's game business strategy of 'high-quality self-developed, global distribution'. Only through global distribution can we offset higher game development costs and achieve better profits. Only high-quality games can become long-term operational games and provide better ROI. Chen Rui further stated that in terms of categories, the company will be more focused. Both agency business and self research will focus on areas of expertise, such as anime cards. In terms of self research, the company will also reduce the number of self research projects and devote more energy to the projects with the highest success rate, polishing the high-quality products.
Regarding the layoffs in the Guangzhou studio of Bilibili and the development of Bilibili's gaming business, our reporter interviewed Bilibili. As of the time of publication, the other party has not responded yet.
Tilt towards high-quality self-developed games
According to the reporter, the game business of Bilibili mainly consists of exclusive agents, intermodal transportation, and self-developed games. However, due to the suspension of the version number, the growth of game agency business was limited, and at the same time, game giants brought their own traffic or chose newly emerging top apps. At one point, Bilibili could only cooperate with small and medium-sized game manufacturers.
Correspondingly, from 2020 to 2022, the proportion of mobile game revenue to the total revenue of Bilibili decreased year by year, at 40%, 26%, and 23%, respectively. Under the goal of breaking even, Bilibili leans towards high-quality self-developed games.
Chen Rui further emphasized at the financial report meeting in August this year that the self-developed games on Bilibili will continue to focus on advantageous categories and value the success rate of the game. He also stated that he will straighten out his mindset and take each step forward. Ensuring the success of the B-site game before making the next goal, the success rate of self-developed games is an indicator that I attach great importance to the (game) team now, "said Chen Rui.
Chen Rui also focuses on long-term operations in the gaming business. He said, "In the future, games must achieve long-term operation, otherwise they cannot make money. From my perspective, if B Station's self-developed game project cannot achieve long-term operation, it will not be approved. If B Station cannot achieve long-term operation, game companies will not sign agents
However, the path of high-quality self-developed games is not easy to follow. The blockbuster game "Shine! Youjun Girl" and some self-developed games on Bilibili have been delayed and their revenue has decreased. In the first half of the year, Bilibili's mobile game service revenue was 2.023 billion yuan, a year-on-year decrease of 16%. As of the end of June, gaming revenue has been declining year-on-year for three consecutive quarters, and the proportion of mobile gaming revenue to the total revenue of Bilibili has dropped to 19% in the first half of this year.
At the same time, B Station adjusted its expected net income for the entire year of 2023 to 22.5 billion yuan to 23.5 billion yuan, a decrease from the previous 24 billion yuan to 26 billion yuan, mainly due to delays in the launch of several games and lower than expected revenue contributions from non core businesses such as IP derivatives and others.
Game industry analyst Zhang Shule said in an interview with a reporter from China Times that making games to quickly revive Bilibili is a practical choice and the best choice for Bilibili to support its massive and expensive content architecture. Whether high-quality self-developed games themselves can become popular or not is a process that requires multiple attempts and mistakes, and one out of ten can achieve a big victory. Therefore, sticking to one's teeth is the only thing that B can do in the current situation, "Zhang Shule believes.