We aim to execute the following strategies to further attract increasing numbers of game players to our games and improve monetisation of our games:
Continue to broaden our game portfolio and drive monetisation
We aim to continue developing more fun and exciting browser games and mobile games to players around the world. We seek to diversify our game portfolio by introducing new games in diverse genres to capture broader segments of the game population around the world.
For the years ended 31 December 2013 and 2014, we generated all of our revenue from browser and mobile versions of our Kings & Legends (王者召喚) series, which is a tactical trading card game series designed in a Japanese-styled fantasy setting, featuring artistic-styled graphics with a mix of strategy and combat features. To expand our game portfolio and broaden our revenue bases, in January 2015, we licensed two new series of our self-developed games including the browser version of our Hero’s Crown (英雄皇冠) series and Heroines of Three Kingdoms (姬戰三國) series. Hero’s Crown (英雄皇冠) is a turn-based card driven strategic RPG series with a focus on strategic and multiplayer combat, and Heroines of Three Kingdoms (姬戰三國) is side-scrolling browser based adventure RPG series. Meanwhile, Endless Battles
(無盡爭霸) is an education simulation game series on the mobile platform and Legend of
Fairies (萌仙記) is a tower defense strategic mobile game series which are expected to be commercially launched in the first quarter of 2016.
We believe that by introducing to the market our Hero’s Crown (英雄皇冠) series and Heroines of Three Kingdoms (姬戰三國) series, which are of different genres from our Kings & Legends (王者召喚) series, we are able to expand our presence in the online games industry. During the seven months ended 31 July 2015, our Hero’s Crown (英雄皇冠) series and Heroines of Three Kingdoms (姬戰三國) series achieved an average monthly ARPPU of RMB237 and RMB223, respectively, which were, according to the Analysys Report, significantly higher than the industry average of USD9.6 (equivalent to approximately RMB58.7) in Asia in 2014. For further details of the analysis of the game industry, please refer to the section headed “Industry overview – Overview of the major online games markets” in this prospectus.
We rely on our licensed operators to market our games. During the seven months ended 31 July 2015, our main licensed operators confirmed that our Hero’s Crown (英雄皇冠) series
and Heroines of Three Kingdoms (姬戰三國) series received positive feedback from game
players. Our Directors consider that our Hero’s Crown (英雄皇冠) series and Heroines of Three Kingdoms (姬戰三國) series had achieved their respective maturities towards the end of 2015 which is in line with the industry average. Analysys Consulting notes that once an online game reaches its maturity, upgrades and enhancements to an online game are often introduced to maintain its popularity and slow down its decline. Some game genres, such as card-based online games which require players to collect cards and virtual items, will nevertheless be able to maintain players’ loyalty and experience slower decline than other game types.
We plan to continue to drive monetisation by enhancing player engagement, extending the lifespan of our existing games, and improving our in-game monetisation mechanisms through frequently updating and enhancing our games with new features and content and introducing new, attractive virtual items and premium features based on data collected from our licensed operators.
Further expand into the mobile game market
Given the similarities between the development of browser games and mobile games, we believe we will be able to leverage our in-house game development capabilities and experience to further expand into the mobile game market. For example, leveraging on the success of the
browser version of our Kings & Legends (王者召喚) series, we have since April 2013
developed and launched mobile versions of our Kings & Legends (王者召喚) series in various language versions.
It is expected that the market share of the mobile game market in the entire game market will continue to grow. We aim to allocate more resources and management attention to the development of mobile versions of our self-developed games. Under our current game development schedule, Legend of Fairies (萌仙記), a new series of games on the mobile platform, will be developed and commercially launched in the first quarter of 2016; and Endless Battles (無盡爭霸), a new series of games on the mobile platform, and the mobile version of our Hero’s Crown (英雄皇冠) series will be commercially launched before the end of February 2016. For the details of our games under development, please refer to sub-section headed “Our games – Our game pipeline” below in this section in this prospectus.
Further expand our global presence
During the Track Record Period, we have licensed our games to various well-established game operators as our licensed operators with the right to operate, publish and distribute specific games within an agreed period and designated territories. Leveraging on the extensive game platforms of these licensed operators, our games in different language versions can be accessed by a large number of game players around the world.
We intend to leverage our proven multi-language game development capabilities and well-established business relationships with several reputable game operators to further expand the global presence of our games and broaden our geographic penetration. We aim to continue strengthening our relationships with our existing licensed operators and identify suitable new licensed operators to expand the reach of our games into new regions and territories. In June 2015, the browser version of our Kings & Legends (王者召喚) series in Russian was commercially launched in Russia, a new territory of our games. To deepen our market penetration, we plan to release additional language versions of our browser games and mobile games to target markets which have a large and high income potential player base.
Pursue potential revenue growth opportunities by designing and developing different language versions of games in an efficient manner
We develop our games in-house, which enables us to create new games with multi- language versions in an efficient manner to keep up with global player preferences. In June 2015, the browser version of our Kings & Legends (王者召喚) series in Russian, a new language version of the game series, was commercially launched. If we identify an opportunity to diversify our game portfolio and expand our existing games into new game genres, such as utilising our existing game contents to develop a new action game, we believe our existing game resources combined with our existing game player base will enable us to adapt and design games more rapidly in order to meet game player demand and to capture market share.
Selectively pursue strategic acquisitions and partnerships
We aim to expand our business through organic growth and suitable strategic acquisitions and partnerships. In order to expand our game portfolio and geographic coverage, we intend to selectively invest in or enter into strategic partnerships with complementary game developers or game development teams. Through such investments and/or partnerships, we aim to (i) enhance our game development capabilities and capacity; (ii) reduce the length of our game development cycle; and (iii) attract new licensed operators. As of the Latest Practicable Date, we have not identified any specific suitable target for acquisition.