Tencent’s DNF is no longer on the shelves of some Android stores, causing high channel costs for game companies

　　Domestic Android channel pairThe issue of high product share has attracted attention again.

　　The reason is that Tencent’s recent hit mobile game "Dungeons and Warriors: Origins" announced that from June 20, some Android platform app stores will no longer be listed. The industry believes that Tencent’s move is related to the long-standing high proportion of Android app stores.

　　Head Drop Android Channel

　　"Dungeon and Warrior: Origin" (hereinafter referred to as "DNF") is a popular mobile game recently launched by Tencent. As a work derived from the classic IP of "Dungeon and Warrior", "DNF" has performed well since its launch.

　　According to seven wheat data, "DNF" since late May online, long-term top the chart of major games. Point data, "DNF" contributed more than two-thirds of the domestic new game market in May, less than two weeks in May, "DNF" download more than 45 million, estimated revenue of $51.29 million (about RMB 371 million).

　　At the beginning of the launch of "DNF", it was normally available in major app stores including Android channels. However, on the afternoon of June 19, the game operation team issued an announcement that from June 20, "DNF" mobile games will no longer be available in some Android platform app stores. The reason given by the team is: the contract expires.

　　However, Tencent Games’ move is believed to be related to the high proportion of the Android app store channel. The app store is a core channel for game distribution, but it is also a costly channel.

　　At present, many domestic game products use a joint operation model between game manufacturers and channel providers such as mobile end point manufacturers and third-party app platforms. Game manufacturers are responsible for game development and testing, launch, and channel providers are responsible for providing game display promotion, download and installation, and billing services. When players complete the payment, the channel provider will pay the game developer a revenue share.

　　The app store generally takes 30% for applications including games. The Android app store channel that makes manufacturers "love it or hate it" takes a higher proportion, and the general proportion is 50%, that is, after deducting relevant costs and expenses, the game flow and the game manufacturer each get 50%.

　　Although leading game companies have some room for gaming, the data previously disclosed by many class A share game companies shows that the app store should also divide at least 40% of the game flow. Under the high proportion of the draw, in recent years, many game manufacturers have chosen to give up the release of Android app stores, especially some well-known game products with high flow.

　　A few years ago, the two major game makers, miHoYo and Lilith, announced that due to "failure to reach an agreed terms of cooperation", miHoYo’s blockbuster products "Yuan Shen" and Lilith’s products "The Awakening of Nations" could not be downloaded from Xiaomi and Huawei app stores during the public beta.

　　Last August 23rd,When the public beta of its key game "All-Star Streetball Party" was released, the official announcement did not put any Android channels on the shelves, and decided to take out the 1.50 billion yuan divided into channels and give rebates to players present on all major platforms. Other products under Tencent Games are currently on the shelves of major Android app stores, but DNF, a key product, will no longer be on the Android app store, which will still have a profound impact.

　　Game company channels are expensive

　　The Android app store has long been criticized by the industry. Although game makers have taken occasional measures such as delisting, they have not changed the industry landscape.

　　The product manager of an app store of a domestic mobile phone manufacturerTimes E Company reporters analyzed that for app stores, games and other applications are the most important source of revenue. In addition to directly receiving game revenue, there are also advertising and bidding ranking revenue from game manufacturers. Games occupy an important position in the app store ecosystem.

　　Shi Jiangang, the co-founder of Liangjianghu, also said in an interview with the Times reporter that the current share ratio is determined by the location of the channel provider, which naturally has the ability to negotiate prices. The reason why the app store is strong is mainly because it can push game products to users at almost zero cost, and the value created for the game is huge, which cannot be replaced by other methods.

　　In this context, except for some relatively strong game products that can be released through their own channels and generate good revenue, most games are still difficult to leave the app store channel.

　　From the data disclosed by many game companies, channel costs are indeed an important part of the operating costs of game companies. Such as class A sharing companyThe financial report shows that the company’s joint operators will deduct the actual recharge amount of game players from the relevant channel fees, and calculate the share according to the proportion agreed upon in the agreement. After the two parties check the data and confirm that it is correct, the company confirms the operating income.

　　In 2022 and 2023, the channel cost in the operating cost will be 257 million yuan and 214 million yuan respectively, accounting for 45% and 52% of the operating cost respectively, which is much higher than the cost of game sharing, labor, copyright, and production fee amortization in the same period.

　　Hong Kong Stock CompanyAccording to the financial report, in 2023, the company’s channel cost was 595 million yuan, an increase of 35% year-on-year, accounting for more than 70% of the company’s cost of sales. In 2023, the gross profit margin fell from 64.4% in the previous year to 59.8%. The company said that the decline in gross profit margin was mainly due to the decline in related game revenue and the increase in channel costs.

　　Another Hong Kong-listed game companyThe financial report shows that in 2023, the company’s sales revenue will increase, but the company’s payment channel cost and distribution platform share will also increase by 23.8% to 523 million yuan, which is also the "big part" of the sales cost in 2023.