Minutes of the 2023 Shanghai Elite Game Summit
Report Release – Analysis of the Reasons for Shanghai Online Game Sales Revenue Growth and Insights into Development Trends
Wang Xu/Co-founder and Chief Analyst of Gamma Data
How has the gaming industry changed?
The national game market revenue will decline in 2022, which is an overall decline, but there is growth in regions such as Shanghai. Game market revenue is related to corporate revenue and product revenue. As of June 2023, 100+ listed game companies have released 2022 annual report data. Among the listed companies with game business revenue, 58.3% have experienced a decline in game revenue; if the game revenue ratio exceeds 30%, the decline rate is close to 60%.
Reasons for the growth of online game sales revenue in Shanghai
Looking at client games, there has been growth across the country and in Shanghai, which is different from the decline across the country (industry market). If you look at the revenue from the high-end gaming business in corporate financial reports, you may see an increase compared to last year. In this way, the data results of gamma data can be verified, and the impact of PC games on the game market can be eliminated in the research on the mobile game market.
Looking further at the reasons for the decline in the size of the mobile game market, we classified the top 300 games according to the year they were launched. It was found that among the products with a drop of more than 20%, there were no products in 2022; there was no obvious pattern in the distribution of products launched before this. But the basic logic is that when the increase in products launched in 2022 is lower than the decrease in old products, there will be a decline in market size. The product monitoring model of Gamma Data shows that the life cycle of many products is within 40 days, and the R&D content and operational activities of the products cannot keep up with the rhythm of users, resulting in the loss of many users in the later period.
Looking at the top 20 incremental data in Shanghai, we can see that most of the new products will be in 2022, followed by products in 2021 and 2020. Specifically, products are divided by type. It can be seen that the incremental types in 2021 are mostly open world RPG, MMO cards, strategy, and simulation management; in 2022, the types will be more diverse, including action, leisure, tower defense, etc.
The incremental products in the past two years can be summarized as follows:
User-level changes
A survey of developers shows that developers generally believe that users’ needs for game products have changed:
The current user traffic is more dispersed. In terms of resources and delivery rhythm in the early stage, past experience may not apply. Looking at user traffic, we can find that except for the slight increase in game live streaming in the past two years, other categories have not changed much, indicating that users’ time is limited. Cross-promotion that is popular overseas is not so effective in China, probably because the current competition is actually fighting for a small number of changing users.
User changes in the global game market
From the perspective of overseas sales, the decline in overseas revenue is not only due to changes in users, but also due to localization, such as unfamiliarity with overseas promotion platforms and exchange rate issues.
Where will the driving force for future growth come from?
Based on the conflicts in the logic of market supply relationships in the past, we can summarize the substantial growth in history:
From this perspective, Shanghai's growth in 2022 and the growth of the national game market in 1Q23 are both driven by the supply side. There is a high probability that growth will still be driven by the supply side in the future.
In addition, a survey of game companies shows that game manufacturers believe that technology will become a growth factor in the game market. 81% of the respondents chose AI, and others include 5G, VR, etc. Taking AIGC as an example, it opens up new possibilities for future games. AIGC improves the efficiency of game creation and lowers the threshold of game creation. But at the same time, there are shortcomings in technology, copyright, content, etc.
AIGC has had specific applications in many fields such as game planning, development, and operation.
Game industry trend insights
Report data
"2023 Shanghai E-Sports Industry Development Assessment Report"
The hosting of this year's Asian Games may bring some new opportunities, and consumption of offline e-sports events will gradually recover.
"2022-2023 Shanghai Game Publishing Industry Report"
At the macro level, the domestic and overseas sales revenue in 2023 is forecast; domestic game types with sales exceeding RMB 10 million are divided by quantity and proportion to help observe the relationship between game revenue and subdivided categories; for the top 100 mobile phones in 2022 Game IP is divided, etc.
AI technology empowers "World of Sword" – practical exploration of China Mobile Games
Xiao Jian/Executive Director, Chairman and CEO of China Mobile Games
Introduction to mobile games in China
China Mobile Games is a game company that focuses on cooperating with top IP companies to adapt IP mobile games and cross-platform games. It has launched "The Legend of the Condor Heroes: Iron-Blooded Heart", "One Piece" and "Dynasty Warriors". and other popular games.
China Mobile Games has a large presence in Shanghai, with two large R&D teams located in Shanghai:
Challenges facing the gaming industry
In the game market, players’ spending power and time are occupied by short videos. After years of iteration, every player currently hopes to find products in the existing market that can bring an unexpected experience, and gain more participation, freedom, creativity or A more relaxed experience. The iteration of users has also brought adjustments to game development, such as the quality needs to provide attractiveness and expressiveness of graphics, plots, content, and the exhilaration of combat, etc. And there are more and more young users among them, hoping for more innovative gameplay, greater freedom and freshness. Recently, the freedom, participation and creativity brought by games such as "Eggman Party" have been greatly stimulated, and it has become a hot item in the market. And users have more requirements for content quality and require continuous and stable changes in product content development. In larger games, how to integrate UGC gameplay and provide more materials for users to create have brought some challenges to research and development.
The research and development costs of high-quality games have increased significantly. In 2021, the research and development expenses of major listed game companies will increase by 30%. There are also some challenges in the global distribution of games, such as changes in customer acquisition methods and rising customer acquisition costs, which also bring more investment in refined and long-term operations. There is also an urgent need to improve output quality and efficiency in terms of distribution. Currently, the game industry is facing the challenge of rising costs, but input and output are not necessarily proportional. AI methods are needed to break the situation and better improve the efficiency of R&D and distribution.
AI layout of China Mobile Games
At the end of 2022 and early 2023, mobile games have actively deployed AI, and have established partnerships with some of the world's top AI companies, including Baidu Wenxinyiyan, Huawei, Microsoft, etc., to discuss how to better develop and publish games. for AI exploration. However, currently no company’s AI solution can perfectly solve the needs of game companies. China Mobile Games will cooperate with third-party AI teams. The company has also established a dedicated AI technology team within the company to understand large external AI models to meet specific needs and control costs.
After more than half a year of hard work, the company has integrated AI tools into R&D industrialization and operational refinement, and has also made some explorations in intelligent NPCs. The results will be seen in subsequent versions of "World of Sword". And the simplified integration of UGC development tools into the game. The company’s goal is to introduce AI technology in copywriting, 2D art, translation and dubbing in the first phase on June 30, to achieve the goal of increasing output efficiency by 20~30% and reducing outsourcing costs by 30~40%. Currently, it has Some expected phased effects have been achieved. By the end of the year, the company hopes that AI can be applied in more fields, and ultimately achieve the goal of reducing outsourcing costs by 50 to 60% and overall personnel expenses by 10 to 20%.
In terms of research and development, the company hopes to promote the research and development application of AI in other games of the company through "World of Sword and Fairy".
The above are the AIGC application areas that the company is currently focusing on researching and are expected to achieve breakthroughs before the end of this year. Once it breaks through, it will be the largest digital asset library stylized in the gaming field and Xianxia IP in China.
Intelligent NPCs are a definite trend, but the current cost and effectiveness of training still require breakthroughs. NVIDIA released the ACE solution some time ago, but it currently looks like it may not be available to companies for experience, application, and optimization until the end of this year. It is possible that real intelligent NPCs can be experienced by everyone next year. What the company is doing in the first phase is intelligent dialogue. On the other hand is a simple smart game assistant that can help users solve various problems in the game.
Distribution area
Including art videos, training, translation, refined data analysis, etc., it has been quickly applied to various distribution companies, and everyone can feel the improvement in efficiency. In terms of high-frequency video production, the company's efficiency increased by 40%; in dubbing, the company's cost was saved by 40%. Translation and copywriting efficiency increased by more than 50%.
Challenges and risks of AI technology
3D applications are a difficult point for research and development, while 2D (Vensen diagrams) are relatively easy to solve. China Mobile Games is solving the problem of 3D digital assets in another way (that is, trying to scan existing Chinese-style objects). We hope that the industry will have more ways to solve it, and solve it better and more conveniently. The company also hopes that AIGC can help with research and development in terms of programming, but there will be data security issues. Local deployment may be better, but there are still problems to overcome.
Looking to the future: AI-powered games
AIGC will significantly reduce outsourcing costs and improve the intelligence of games. Ultimately, it is hoped that the game industry will achieve a reduction in development and distribution costs, giving companies more space to develop products that better meet user needs. There are already some AI-based products on the market, and products native to AI experience may also be a major trend in the future. AI empowering games and combining games are the clear direction.
The AIGC wave is coming, real-time cloud rendering helps games expand new boundaries
Guo Kuangye/Deputy General Manager of Alibaba Cloud Gaming Division and CTO of Yuanjing
Yuanjing is a technical service platform based on real-time cloud rendering and oriented towards cloud games and the metaverse.
AI is a very familiar topic to the game industry, and previous AI technology has been integrated into the game production process. The significant differences in the past six months come from: 1) GPT led by "big language models that work wonders"; 2) led by NeRF to break through issues such as generation accuracy; 3) led by NeRF to achieve new breakthroughs through neural network spectra, etc…
As a technology company serving the game industry, the company believes that game content will usher in a major explosion under the AIGC wave. First, for production costs, we generate through copywriting, code, voice, 2D, 3D, etc. Copywriting and 2D are relatively mature, using AI to simplify costs and improve operating efficiency; second, the new capabilities emerging from AI support new gameplay, such as AI accompanying games It can well solve the "user collapse effect", AI NPC provides variable differentiation for the game, and player UGC generates diversified content with the assistance of AI.
What Yuanjing can already provide is large-scale operation and stable real-time cloud rendering clusters, which can quickly put existing games and games under development on the cloud, and quickly provide services to all players. As a wholly-owned subsidiary of Alibaba, the company has been established for about three years and provides services from the underlying system layer to management and control (supporting common game version update deployment, scheduling and operation and maintenance capabilities), etc.
The integration point with AI is:
1) There are many GPUs that support real-time cloud rendering, providing two directions outside of peak time. First, large-scale production requires a lot of fine-tuning training and deduction capabilities. "Peak multiplexing" cloud rendering can reduce production costs and scale up Producing digital assets consumes computing resources, and companies can assist with this. Second, during the running process of the game, a large number of AI resources will be called, which will form a big bottleneck with the throughput of the AI system itself. Games can form rich interactions with AI systems.
2) Opportunities and challenges: Generative AI brings an explosion of content, and the difficulty of self-discipline of content will also increase.
[Difficult issues still under research]
【challenge】
3) The natural advantage of real-time cloud rendering in content self-discipline
Using real-time cloud rendering can quickly support small-scale sampling products.
The content is on the cloud, so it naturally does not need to be cross-terminal, and management and control updates can be carried out relatively quickly.
AIGC will bring revolutionary technological progress, and cloud native games are about to be born.
The exploration direction and challenges of AI in open world games
Ke Jiani/Senior Vice President of Mini Creation
Mini Creation was founded in 2015, and its product "Mini World" is built around this product to create a full IP ecosystem. In 2021, the brand will be upgraded to Mini Creative, hoping to become the world's leading UGC sandbox creative platform. Currently, there are 200 million users creating and experiencing content on our platform. "Mini World" is trying to finally achieve "generating a map in one sentence" to help young players create generated content. The company has an optimistic but cautious attitude towards AI. The user group is relatively young (mostly teenagers), and they use it with caution and limited exploration.
AIGC has vast space
"Mini World" is trying to use a lower threshold for creation, allowing teenagers to build worlds and create more content on our platform.
AIGC+ games
Costs such as numerical balance and material design account for a relatively high proportion. For example, in terms of game materials, the process of making a 3D character usually includes "concept – model construction – skeleton skinning", etc., which takes half a month to 30 days.
AIGC will become a better way to reduce costs and help game developers improve game production efficiency and shorten development cycles through industrial modeling.
From game AI to AI game – NetEase Fuxi’s exploration in the field of game AI
Li Le/NetEase Fuxi Game AI Product Manager
NetEase Fuxi was established in September 2017. It is China's first game artificial intelligence research institution laboratory. With the purpose of "creating a world-class laboratory at the intersection of artificial intelligence and games", it has extended from the original "Fuxi Laboratory" "NetEase Fuxi" and "Fuxi Robot". Among them, Fuxi Robotics Department is mainly engaged in digital twins and human-machine collaboration.
NetEase Fuxi’s five major research directions:
"Backwater Cold" mobile game
Productization of AI technology – the evolution of the game development pipeline
Luo Yicong/Head of Product Department of Perfect World Technology Center
Perfect World Games began to deploy AI technology in various research and development lines a few years ago. After years of R&D accumulation and recent explosive updates of AI technology, the company has now applied AI technology to multiple links in the R&D pipeline.
The first is the concept and basic material level. With the help of AI, the game schematics and material requirements are more intuitive, and planning can also make the prototype fuller without art support. Through proficient use of various plug-ins, planners can directly output storyboards and storyboard requirements, which greatly improves the efficiency of material output.
Secondly, in terms of production tools, models of different AIGC tools are trained in a targeted manner according to the needs of different types of AIGC tools and different projects. The content production team can directly output various types of more suitable pictures, audio and other materials. AIGC tools are also promoting the reform of existing content production pipelines and accelerating the production process of art assets such as UI, animation, and materials.
At present, the company has developed new game development tools such as plot generation and big world generation based on AI technology to meet the needs of different types of game projects, and assists the R&D team in building a new form of game development pipeline relying on AI technology.
AI deeply participates in the production pipeline, greatly improving production efficiency
The scene also showed a complete case of AI fusion drive, and the composite application AI in that Perfect World Games is developing. In the game, including scene information, character information, plot development, player behavior, dialogue, etc., are all calculated by AI. AI understands user demands and performs performances. Based on the grand world view and story line of the company's products, as the plot progresses, the environment changes, and users communicate and dialogue, the intelligent NPC performs according to the current environment and scenario, providing different players with different senses and gaming experiences.