Quick thoughts on the Xbox – Riot deal

Xbox announced a Game Pass deal with Riot Games (my previous employer, I left in 2019). The deal covers all of the live service games in Riot’s portfolio, across PC and mobile platforms.

I have a few thoughts in reaction to this news. The first is the surprisingly large value Riot is putting on the table. This is not a small experiment; Riot didn’t go the safe route of starting with one game and deciding to expand or not based on the metrics. And even if it were just one game, say League of Legends, the monetary value of “All champions unlocked” is not trivial. As a quick “valuation” exercise:

  • Buying them all outright (even though few players do this – you can earn soft currency and unlock champions by playing) is easily hundreds of dollars – you can google for various answers, players have done this math before.
  • An alternative comp is to look at Asia, where “all champions unlocked” is a B2B product that PC cafes in Korea and China pay Riot for. If you assume Riot charges a Korean PC cafe $0.2 for every hour of this service, and on average players play 30 hours per month (both of these are like 10-year-old stats in my head), then “all champions unlocked” is by itself a $6/month service.

However you look at it, it seems that Riot is offering a ton of value here – so much so that, if you are a dedicated fan of Riot’s games, you should sign up immediately for Xbox Game Pass just for the Riot benefits alone.

This sparks an interesting offshoot question – instead of working with Microsoft, why didn’t Riot roll out its own “Riot Games Pass” instead? I would imagine this scenario had to have been part of the internal strategizing. And that would feel more in line with the M.O. of the Riot Games I know circa 2015 – doing it alone, desiring total control of the player experience.

I don’t have any inside knowledge, so I can only venture some guesses based on looking at the exchange of value in this deal:

  • From a player acquisition perspective, it seems more likely that Riot is funneling players to Microsoft – League announced 180M MAU last year, although a significant portion are players from China, which Xbox Game Pass doesn’t officially serve; while Xbox Game Pass last announced 25M subscribers. But Riot does also gain a new channel where new players could flow in, and it may be a previously underserved (more console-oriented) player-base. Thus Riot stands to benefit from all future Xbox Game Pass marketing, as a % of future Game Pass subs could convert to Riot players.
  • Based on the above, I would imagine there’s a sizable monetary component to the deal, flowing from Microsoft to Riot. I’m not a BD person, I don’t have a good sense where to start to try to model this component. It could be a fixed per-year amount. It could be calculated based on actual player engagement (some sort of revenue share / pre-defined payout based on metrics). It could be a combination of the two.
  • To Microsoft, I also think there’s a Game Pass content strategy component to this deal as well – having popular live-service games, like Riot’s portfolio, acts as a natural buffer against AAA seasonality, and probably helps with smoothing out churn.

Another interesting part of this deal is the mobile games included. This has the effect of providing an off-platform (iOS / Google Play) way to monetize a mobile game’s content, though in the past this was usually done by the game’s publisher directly, as opposed to another platform like Microsoft here. It will be curious to see if there’s any response from Apple & Google, especially if Microsoft starts rolling up additional mobile games into Game Pass and could threaten to end-run IAP regulations.

From Riot’s perspective, I can also think of a number of risks to this deal that needs to be managed:

  • The monetary math: does the inflow from Microsoft cover the possible loss of all future champion revenue (to use League of Legends as an example)?
  • The game economy and player behavior implications: during my time at Riot, I felt the long-held internal view was that providing all champions for free (which is what DotA 2 does) has negative effects on players’ onboarding flow, matchmaking quality, sense of ownership and progression. This deal seem to override these concerns.

In summary: this deal took me by surprise, but I think it could make sense for both parties. It would be fascinating to follow how this impacts both companies going forward.

Elden Ring (2022)

To write about Elden Ring feels almost as daunting as it is to finish it. My first play-through clocked in at around 135 hours, which is the longest of any FromSoftware game I’ve played, and really, any game I remember ever finishing. And so for a few days after that play-through, I sat around thinking about writing, and instead started a second fresh play-through (as opposed to the NG+ route).

As of this writing, I finished the second play-through at 42 hours, and it took me another 7 hours to breeze through NG+ on that save, and get the Platinum trophy the hard-earned way (instead of manually reloading a save file). For the purposes of this write-up, I’m glad I did these 2 extra play-throughs, as it allows me to see through some of the magic (but also appreciating them more).

In terms of my credentials as a fan of FromSoftware’s works, I’m somewhat of a halfway convert. I’ve finished Bloodborne (2015), which was my introduction, and Sekiro (2019); I played Dark Souls III (2016) for maybe 20-30 hours, but never finished it; and I’ve dabbled 10-20 hours in Dark Souls (remastered) and maybe 10 hours in Demon’s Souls (PS5 remake). Suffice to say, I understand the Soulsborne formula, but I’m not a master of its earlier iterations.

Over the years I’ve written a few times about these other FromSoftware games; I’ll try to build on some of the prior analyses below.

The basic loop

The basic loop of Soulsborne game is familiar enough by now:

  • you begin as a fairly weak character, with some very basic gear. From a checkpoint (Sites of Grace in Elden RIng, Bonfires / Idols / Lamps in other FromSoftware titles), you explore the nearby area, killing enemies and collecting loot, until you unlock the next checkpoint, run out of resources (healing potions, which initially you only have a few bottles of), or (very commonly) die.
  • You can rest at any checkpoint to fully recover your health and your potions; but doing so also revives all the enemies (except those that can only be fought one-time, like bosses), and thus in a sense resetting any partial progress.
  • If you die, you respawn at the most recent checkpoint, having lost all of the currency you had; you can recover them if you successfully reach your corpse – but if you die again before then, the currency is lost forever.
  • You can spend your hard-earned currency at any checkpoint to level up, by gaining a point in one of your attributes (vigor, endurance, strength, dexterity, mind etc., fairly typical labels of fantasy RPGs). The level up cost follows a formula that has stood the test of time – literally, as it is the same math used in the original Dark SoulsBloodborne and Dark Souls III.1
  • Eventually, you will run into some boss fights. Many boss fights are optional – you can simply go explore elsewhere.
  • As you make progress exploring, you will level up, unlock more healing potions and skills, find more and better weapons, and also upgrade those weapons. You are becoming more powerful, but you are also facing harder enemies as you explore deeper; and thus the basic loop perpetuates.

Elden Ring is an attempt to take this basic loop, and stretch and fit it to an open-world game. In their execution, FromSoftware has been able to leverage their traditional strengths in intricate level design, while also adopting design patterns from the open-world genre.

Level design principles

FromSoftware is rightfully renowned for their level design craftsmanship. I’ll try to summarize it in a few principles:

  • Unlockable shortcuts that serve as progression meters. The classic example is a door that is locked from your side, close to a checkpoint. When you eventually reach the other side of the door and open it, the previous checkpoint economically becomes a new “rest point”. Purely from a level layout perspective, this is not the most striking feature, but it ties in heavily with the core loop.
  • Interconnectedness. This was more notable in the original Dark Souls and Bloodborne to a degree. You discover paths that eventually lead you back to a surprising earlier section of the world. These connections serve practical functionality as shortcuts, but they also deliver a strong feeling of awe and immersion in the world.
  • Verticality. Every location seems to be designed with verticality as a cornerstone, with at least 2-3 heights at which gameplay can unfold. For example, a hall where you might first play through the ground level (and find yourself being attacked by enemies on the second floor), and eventually find yourself outside on the roof. And this also becomes a pattern to players – if you are ever in a space with a tall ceiling, odds are that there’s a higher level you can get to, with some secret loot.
  • Economical use of space (and thus assets). A corollary of the above point, but sometimes the designers intentionally flex their spatial prowess – for example a space where you play once normally and then later again upside down.
  • Real world scale. Locations are built to scale, so when you do end up on the top of the castle wall, and look down to the valley of the mountain where you began, you truly appreciate the scale of the design.
  • If the place can spawn an enemy, you can reach it. This invites the player to explore more thoroughly, as levels are filled with secrets, and an “unreachable enemy” is a clue that there are parts you haven’t found yet.
  • Memorable traps. A shiny chest in the middle of the room is often a trap, either with the chest itself (mimics in Dark Souls), or with an enemy waiting in the blindspot of the room. Another example is an enemy with their back towards you, slowly walking away – there is likely another enemy waiting in ambush, again in the blindspot of your 3rd person camera. And then there are the numerous “jump-scare” type ambushes. The thing to note about these patterns is that they can be used very sparingly to great effect – it only takes one good use to make players double-check every time in future 2.

The classic example of all the above is a castle (of which there are many in the Soulsborne universe). In Elden Ring, Stormveil Castle is the first notable example. To illustrate the complexity of the level design in this location, we can simply look at Polygon’s map – this map is hard to read, precisely because it is trying to represent a maze-like 3d space through a number of 2d cross-sections:

Source: Polygon

Open world experience

In Elden Ring, the big question was how FromSoftware would extend its principles to a much bigger scale, and I felt the answer was “same principles, with some patches addressing anything super broken”:

  • The 6 key destinations of the world (with intricate labyrinths, loot and bosses) – the proper terminology is Legacy Dungeons – are self-contained components that follow the proven design principles above, and executed to FromSoftware’s usual quality.
  • Ruins, caves, catacombs, smaller castles and various other smaller locations (which are one-and-done consumable content) populate the “open” part of the world. While the majority offer combat challenges, there are a small amount of puzzles.
    • Some of the later catacombs are particularly memorable in how the designer creates a puzzle by re-using the same level layout in different layers of the tomb, inflicting confusion on the player – “I thought I’ve been here already? But why is there a different enemy?”
  • The verticality principle is taken to a grander level – in Elden Ring there are enormous areas of the world that are directly on top of each other, shown in 2 layers of the map. And there are bits of the map where you can only reach by traversing through a section of the other layer first.
  • Restrained handholding. Much has been said online about the map and navigational UI (in comparison to, say, Ubisoft open world games). I think the point is not that Elden Ring offers no directional handholding, but rather, it does the bare minimum and expects players to be able to understand:
    • For example, the actual map is hidden until players collect the map fragment, but in the hidden view there is an icon for the location of the map fragment, which serves as a natural priority destination for the player to work towards.
    • The big pointers on the sites of grace offer a heavy-handed nudge in terms of bigger objectives.
    • While the map does not offer comprehensive UI to highlight the points of interest, the map is quite readable and you can easily spot the places you’d probably want to visit.
  • The gradual unfolding of the map’s true scale was a neat trick that awed players (the map zoomed out as you explored beyond its boundaries), and is contrary to typical open-world map designs which are eager to show you “look how big it is!”.
  • To break up the natural pace of map exploration, there are numerous portals and even a teleport trap that jump you ahead a bit or transplant you to a different part of the world altogether. Once triggered, the logical thing for players to do is to explore the new area until they reach a site of grace, which unlocks future fast travel. There is also a notable “4 bell towers” location mid-game, with several of the towers teleporting you to places adjacent to late/end game zones, greatly foreshadowing what is to come.
  • As a patch against frustrations of travel, the game is much more liberal with providing the sites of grace checkpoints, sometimes comically so. On the whole I think this is a welcome change, but it also does mean going back to older titles will be harder.
  • The mount. As a necessary and proven solution to overcome open world traversal, Elden Ring’s mount is a bit janky but gets the job done. It even has a double-jump to reduce frustration. Mounted combat is restrictive (you have a much limited moveset), while also encouraging cheese – I defeated many tough bosses in the open-world areas by abusing the mount’s speed with hit-and-run attacks. There’s also a weird i-frame when you mount/dismount. Overall I see it as a practical but not elegant patch.
  • Another (perhaps unnecessary) patch are the potion refill mechanic in the open-world, where if you defeat a complete group of enemies, you will gain a few potions back, extending your run before you need to rest. It has some utility, but I dislike this mechanic simply because it’s yet another rule (along with the mount) that only exists in the open-world, but not in Legacy Dungeons and any interior location, which adds to the cognitive overhead of making sense of the laws of physics in this world.

The sum of the above is an experience that feels immediately familiar to Souls veterans, but with an unprecedented volume of content in an unfathomably large map. It is worth noting that a good amount of the content depth is illusory, or at least, opted-in by the player: it is not required (with no practical rewards) to fight the very first Tree Sentinel patrolling the beginning area, and yet, many players will spend their first few hours just fighting and dying to this mini-boss. And generally, there is little value in fighting the enemies roaming the open world, and it is more efficient to just ride past them (or fight the minimal number guarding loot you want), but many a player will probably fight all of them, simply because they are there.

Difficulty and opt-in challenge

It is easy to sink a hundred hours in your first Elden Ring play-through, due to the combination of content volume and progression scaling. The conventional wisdom is that “progression” in Soulsborne games is less about power scaling, and more about player mastery of mechanics (knowledge and execution). This is still a core tenet in this game, but the expanded content scope has meant that enemies are spread against a wider power distribution. A quick proof here is to compare the player level at end-game (especially given the level-up formula is the same): in Bloodborne, it is common to finish the game at around level 70; in Elden Ring, level 120+ would be more common.

It is still possible to complete the game without ever leveling up – just “git gud” – but that is not the typical player experience. To revisit the “difficulty” topic, I feel the optimal (maybe design-intended?) difficulty is where it takes regular enemies 5-7 hits to kill you (and for bosses, 3-5 hits), while you kill regular enemies in 1-3 hits (and bosses in 10-20 hits). Outside of these ranges and the game feels either too easy or too hard/grindy from a numerical standpoint.

From a mechanics standpoint, the game has a wide range of tools (weapons, skills, spells, consumables) for you to approach any challenge. There is a wide range of builds, though organically discovering builds would take a lot of time, and thus reading community guides outside the game are a core part of gameplay. And with each balance update, the community is motivated to discover the latest “meta”, further extending the game’s playtime.

Given the open world nature, Elden Ring is far more generous than previous FromSoftware titles in presenting opt-in challenges. (Indeed, the shortest path to completing the game only takes up maybe 10% of the entire map.) My favorite story here is my experience in a small cave in the dreaded Caelid region. The cave had something I wanted – ironically, now I can’t remember what -but it was filled with scarlet rot swamps, and if you stood in them for too long, you are afflicted with a long debuff that constantly drained your health.

I had a number of options to tackle this terrain: to remove the debuff, I could use a consumable item, but I couldn’t be bothered to farm the crafting materials for it (indeed, crafting seems to be a largely forgettable system in the game). Alternatively I could use a spell, but I would need to get a few more levels to meet the attribute requirements; again, something I didn’t want to wait for. Another path was to try to minimize the time in the swamp, by equipping a quick-step skill – I was greedy and impatient, so this is what I chose.

A few minutes later, I had successfully reached the boss fight area of the cave, and died, dropping a tidy sum of Runes for my level at the time. I remember laughing at the time – do I want to go through this BS again? Or come back when I’m more powerful? I decided to try one more time – since if I died again before reaching my corpse, the Runes would be forever lost, and thus I would have little reason to bash my head against this wall here. Alas, I ended up defeating the boss in this next attempt, and that triumphant feeling of overcoming an unreasonable challenge (while not fully believing in myself) was addictive.

This is very much a core philosophy of Hidetaka Miyazaki – as he said in the excellent New Yorker profile, “hardship is what gives meaning to the experience.”

The world becomes smaller, as you get wiser

I mentioned earlier that in subsequent play-throughs I could see through some of the magic. Specifically, it was much more apparent that I should skip as much content as possible until I got to the level where I could play the build I had in mind. This means largely just riding through the lands and picking up items, while avoiding combat. I also took a shortcut with some “meta’ power-farming tricks, although they became way too mind-numbing for me after 10-15 minutes.

A friend of mine regretted acquiring this knowledge early (after watching some power-leveling guides), as he felt robbed of the early-game exploration. I understand the sentiment, but I also think the early game is part of the portion of content that has little replay value, and I’d rather “just get to the good part” which is mostly about experiencing different builds. I’ve played almost 200 hours, and really I’ve only played 4-5 builds. At end-game, builds revolve around very specific combinations of weapons and skills/spells, and given the game’s vast amount of weapons/skills/spells, there is a lot of depth here. So much so, it’s easy to lose the bigger picture – we are talking about just the single-player experience easily offering hundreds of hours of gameplay.

Closing thoughts

I wanted to end with some quick notes about production. Let’s start with some quick headcount comparisons from browsing the credits of FromSoftware games since 2015. As a lazy effort, I only did a subtotal tally of programmers, designers and artists – there are lots of many other folks in other role (audio, QA, localization, the management layer etc.), and this is not to diminish their contributions. Without insider knowledge, this also doesn’t reflect how outsourcing or other significant workflow adjustments impact production capabilities.

Source: game credits

Caveats aside, I do feel that these numbers support 1) my previous sentiment that Sekiro was done on a tighter scope, and 2) Elden Ring was a bigger production, but maybe surprisingly not by that much – the bigger growth was in art and design, perhaps with a focus on authoring content using mostly mature internal toolchains. Continuing my quick-and-dirty comparison (from my Sekiro review) of regular enemies count, the list of enemies in Bloodborne vs Sekiro vs Elden Ring stands at 68:45:150 – maybe indicative of good returns on content volume with the additional headcount.

At 13.4M copies sold in the first month, Elden Ring crushed the publisher’s internal forecasts of 4M. This is the nature of the business – in hindsight it’s easy to rationalize, but no one can confidently predict outsized hits. With Elden Ring as a breakout title in terms of mainstream adoption, FromSoftware is now in rarefied air – one of the few elite studios which players will buy upcoming games solely based on trust in the studio brand. This status is attained after over a decade of hard work in a genre of their own creation.

  1. The formula is y = 0.02x^3 + 3.06x^2 + 105.6x – 895, for those curious.
  2. For example the chest teleport trap in the beginning area in Elden Ring, that mischievously takes players to a much harder area with no easy way back.

2021 year in review

Previous yearly reviews: 20202019201820172015.

Industry stuff

If 2020 was a year where the global games industry got drunk on pandemic growth, 2021 was the hangover. Consumption growth stalled, as expected. Supply chain disruptions have meant a difficult transition for the new console generation. And developers also wrestled with production delays and ongoing uncertainties of office re-openings.

In China, there was even less to cheer for. Game license approvals have again been stalled since August, and thus there were only 755 games approved for the whole year – a 46% decrease from 2020. And there were only 76 imported titles – it’s important to note that any game that’s based on a foreign IP is typically treated as an import title (e.g. Netease making a MOBA with Marvel characters), so the number of licenses issued to games made by developers outside China is even smaller. In comparison, NPD reported over 2,000 premium games released across consoles and Steam in the US in 2021; and there’s about 10k games released on Steam every year, and certainly a lot more on mobile free-to-play. So the license approval in China has become this ironclad gate, where the vast majority of games produced globally every year are not allowed legal entry. It’s not hard to imagine the rent-seeking behavior this creates.

And then there were the newer and stricter regulations. Minors are now limited to a total of 3 hours of gaming a week, designated at specific hours from Friday to Sunday. (If you work in server operations, these kinds of schedules create the worst traffic spikes during your peak hours – and indeed Honor of Kings suffered server outages when millions of youngsters wanted to login at the same time Friday night.) Tencent also voluntarily introduced time restrictions for adults, and thus it’s now a common sight to see streamers swapping accounts to extend their playtime while on air.

And thus Chinese game companies continued their international expansion, looking for greener pastures elsewhere. miHoYo opened a studio in Montreal, following a series of studio openings across North America by Tencent. But there’s also regulatory headwinds, with the US government scrutinizing Chinese services. This is partly what prompted Tencent to unveil a new publishing entity, Level Infinite, headquartered in Amsterdam and Singapore; and likewise miHoYo transferring Genshin Impact’s publishing to its Singapore entity Cognosphere. It’s unclear to me that such attempts to create a legal separation between China onshore and offshore entities would appease regulators outside of China, and the legal gymnastics could eventually become untenable.

Speaking of Genshin Impact, it continues to impress on the global stage, not just in terms of its business performance, but also cultural impact. I think it’s doing a lot to elevate the stature of Chinese games with players globally. Another mobile game worth mentioning is Harry Potter: Magic Awakened, developed by the Netease team that created Onmyoji. This game has set a new bar for launch live-ops in China: players were allowed to download the game, log in to create their characters, and socialize with other players in-game a few days before the official launch date; combined with a creative marketing campaign (a “back to magic school” theme that coincided with the real-life back-to-school season), the game was a viral sensation.

On a separate note, one positive development was the formal end to “996” at most large tech companies in China. Partly spurred by regulatory scrutiny, and partly perhaps due to an attitudinal shift in the new generation of talent, this is one more sign that the hyper-growth years are over.

Oh, and there was the Bubble – metaverse, web3, NFTs, play-to-earn… Even to a disinterested observer like myself, these concepts seemed to have sucked all the air out of public discourse. In China, discourse around NFTs and crypto-gaming have been much more muted, thanks to the ongoing government crackdown against crypto. But the “metaverse” hype cycle was in full force. It’s hard not to be skeptical, when you hear about some blue-blood VC eager to fund a team (which has never made a game before) pitching a cross-platform metaverse MMO. But for now, the music hasn’t stopped playing, and so the game continues.

Finally, Wild Rift – the game I worked on for 2.5 years from late 2016 to mid 2019, and where I was one of the first 3 people on the team – finally launched in China, as the more straightforwardly (and better, IMO) named League of Legends Mobile. Early data seemed to have been very good, at least good enough for the project team to win the prestigious “major business breakthrough” award within Tencent. But of course the jury is still out on whether the game can sustain. In any case, I’m just happy that Chinese players can enjoy it (or unite in complaining about the matchmaking – but that should a post for another day).

Work stuff

2021 was the second full calendar year I worked at Supercell Shanghai. The office was open year round, except for a couple weeks when one colleague was quarantined by the Shanghai government in a contact tracing effort. (In my colleague’s case, apparently the Didi ride they took had transported someone flagged as a close contact of a suspected case, and so my colleague was flagged as well – this is one anecdotal example of how contact tracing had been enforced locally.

It was still far from a normal year for work, since it was a massive undertaking to enter or leave China. So we really missed out on cultural exchanges and collaborations with other Supercell offices. And it also took a heavy toll on our recruiting strategy, since it was practically impossible to hire from overseas.

It’s hard to develop new games and build new teams and establish a new studio’s culture all at once. (Duh!) And thus it was an exciting milestone (and a big sigh of relief?) when my coworkers soft-launched Clash Mini towards the end of the year. I didn’t work on the game, but given how small our studio is, I’ve had a great front-row seat to its trials and tribulations. There’s a Chinese idiom that says a bystander sees more clearly than the person directly involved; I certainly felt this way in the numerous peer 1-1s I’ve had with Mini’s game lead.

As to my own project, there’s not much to talk about publicly, yet.

One book that had a significant influence on how I worked was Noise: A Flaw in Human Judgment. Whatever its flaws (reviews online are fairly mixed), the discussions of how to run better recruiting and performance evaluation processes prompted me to change my approach on these topics.

Personal stuff

As a family, we still didn’t do much travel in 2021. A large part of this is thanks to the tight travel policies of local schools, which implemented extra restrictions on top of city-wide policies. For example – if my son left Shanghai, at the minimum he will have to submit a negative PCR test result and self quarantine for 48 hours before he can return to school.

For many Chinese families, such requirements haven’t dampened their interest for travel. And some have gotten quite creative at beating the system – for example, if you have multiple mobile lines (which many Chinese do, partly due to the low cost and the restrictive carrier lock-ins), you can leave one SIM inactive at home, and use that number to generate a green report (based on carrier location tracking) that says you have not left the city.

But anyhow, in my family’s case we played it safe. That has meant opportunities to pick up new hobbies. During the pandemic, my son became a huge fan of American Ninja Warrior, so I’ve tried to gently nudge his athletic interests. (He’s definitely starting from behind in this regard, since my wife and I both lack good exercise habits or play any sports still.) I couldn’t find a Ninja Warrior style gym in Shanghai – so we picked up rock climbing (in gyms) instead.

Anecdotally, rock climbing feels like an up-and-coming sport in China. There’s not a huge list of facilities in Shanghai, but it’s been a mini adventure taking my son to a handful of gyms over the past year. There’s usually 2 distinct groups of customers at these venues. The first is kids – parents paying for private lessons for their children, perhaps hoping to get some certifications that help towards high school applications. The second is young people in their early twenties, skewing slightly more female than male. And if I had to guess, I’d say the first group overall outnumber the second – so you could say that the job-to-be-done of climbing gyms in Shanghai is primarily to address the education-system anxieties of Chinese parents.

There are a few lessons I’ve observed from all these trips to climbing gyms. The first is how people overcome their natural instincts through practice. All beginner routes at these gyms use auto-belay devices for safety: they respond to your weight and will lower you at a controlled pace when you fall. So the first thing all new climbers need to learn is to let go of the wall to safely descend. This can be a lot harder than it sounds – I’ve lost track of how many kids I’ve seen that are “stuck” at the top of the wall because they can’t let go. It’s a counter-intuitive move that requires a leap of faith initially. With enough repetition though, you can overcome your natural survival instincts.

Another small lesson is how first-time customers (especially parents taking their kids to try out climbing) misjudge the relative difficulty of bouldering (3-5 meters tall) versus wall climbing (12-15 meters tall). They assume that the taller wall, which requires protective gear, must be harder; whereas gym staff will almost unanimously tell them that bouldering is more technical and harder, especially compared to the beginner climbing wall routes that are effectively ladders. I guess this is another example of how subject-matter literacy is required for informed debates (yes, I’m alluding to the NFT discourse on Twitter that is driving game devs mad).

Media consumed

I played a lot of Hades in the beginning of the year. I was quite hooked, so much so that I was carrying my PS5 controller with me when I traveled for work. Besides getting platinum in achievements (alas, I have almost no friends on Epic Game Store to brag to), I even attempted speed-running and was very proud of myself for setting a personal best of a sub 9-minute run (which is ranked about 300ish on speedrun.com).

Towards the end of the year I binged Wild Rift a lot on China server, probably more than I would have expected. I can now see it’s a bit of an acquired taste – it’s the most competitive and serious real-time PVP game I’ve played on mobile, and the intensity of the experience is a notch higher than pretty much any other mobile game. The literal $B “product-market-fit” question is how many players there are in the world that want this intense an experience on this particular platform. In China it’s a lot – quite a bit smaller than Honor of Kings, for sure, but we are still talking about tens of millions of players at least.

The rest of the year I can’t really recollect what I played. I sampled a bunch of games on Xbox Game Pass, but didn’t play anything deeply. On the indie/AA side of things, I enjoyed Death’s Door and F.I.S.T. enough to write about them, and I was impressed with the latter as a very competent first outing for a Chinese studio.

For film and TV that I watched for the first time last year, Dune (2021), Samurai Rebellion (1967) and Free Solo (2018) were my top 3 feature films; Generation Kill (2008) was my favorite TV series, though the latest seasons of Succession and Ted Lasso are also very close to my heart. Squid Game – by far the biggest surprise hit of the year – was in my opinion another reminder of how fruitless it is to make ex-ante forecasts; we can only make ex-post rationalizations of the show’s success.

Photo by Jonathan J. Castellon on Unsplash

Communications as gameplay

I recently watched the 2008 HBO mini-series Generation Kill for the first time. Focusing on realistically portraying the grunt’s perspective of war, it’s a great modern combat rendition of themes previously explored in works such as PlatoonBand of Brothers and Saving Private Ryan. I quite recommend it.

Aside from the brutal horrors of war (and the senseless of it – a core theme of the series), Generation Kill also effectively showcases how the modern US military communicate, and the limitations of their advanced systems. Radios are extensively used – as the primary comms within a platoon, with their upper command, and calling in air strikes & artillery support etc. There also is a version of a BFT system shown, where a digital battlefield map can be seen with near real-time data of tracked friendly and enemy units (similar to the mini-map in RTS games).

Despite these sophisticated systems, the marines featured in Generation Kill often find themselves in states of confusion: at night, they receive friendly fire from a nearby friendly unit passing by; after reconning a town without identifying enemies, they see it bombed, with no idea where the order came from; they see an aerial unit attack a nearby location, but have no immediate way to communicate with the friendly aircraft; and in one ironic scene, they jam their own radio channels so that an incompetent leader cannot send out a wrong (and dangerous) command.

This sparked a thought – what video games employ communications as a central gameplay mechanic? A few different examples came to mind:

  • The fun party game Spaceteam used speech as a primary mechanic. And last year’s phenomenon Among Usobviously leans on speech for a majority of its gameplay content as well.
  • Any team-based multiplayer game that emphasizes real-time coordination as a vector of mastery – whether PVP (like MOBAs or shooters), or PVE such as MMO raids. And in a military shooter like PUBG, the communication have many direct similarities to the military in real life.
  • 4X games (“SLG” in Chinese gaming terms), by virtue of their large and hierarchical guild social structures, create strong needs for layers of communications, not unlike the military chain of command. The senior leaders of a guild will have a private chat channel for strategy formulation and decision making; lower level grunts may only receive commands on a need-to-know basis. And social manipulation / influence is a key part of the gameplay (e.g. trying to bribe an enemy guild’s senior leader to defect, or backstabbing an ally).

Obviously, placing a premium on communications can create nasty negative effects. Toxic communities – in short players being assholes to strangers online – can drive many players away, especially targeted minorities (for example female players in shooters that often encounter a lot of abuse in voice-chat). So there’s also a counter trend of games taking away communication means in-game, and thus pushing players who want these features back to 3rd party tools.

F.I.S.T.: Forged in Shadow Torch (2021)

F.I.S.T.: Forged in Shadow Torch is a Metroidvania game made by Shanghai developer TiGames, and released first on PlayStation recently (coming to PC in future). The team is about 20 people.

With a Metacritic score of 81, this game is in my opinion a good example of a new breed of Chinese games that are successfully establishing a beachhead in the premium console space. And now it’s not so far-fetched to envision a future where Chinese developers can ship successful $70 AAA titles cross-platform, competing with the biggest console franchises.

I’m not heavy into this genre, and during my first hour with F.I.S.T. I was not too impressed. I didn’t like the grimy dieselpunk art style, and the starting weapon, the eponymous giant fist felt too slow. At this particular moment, I felt I was playing the game more due to professional curiosity (and a natural desire to support a Chinese title).

But the game does open up over the next few hours, as you unlock new abilities, including traversal abilities like double jump and wall jump that are staples of the genre. (I would argue that perhaps these abilities can be unlocked even earlier – at the cost of a more accelerated learning curve for players new to the genre.) And once you acquire the second weapon (out of 3 total), the game’s combat system fully reveals its deep combo-chaining potential (seemingly inspired by action games and fighting games).

Probably around the 10 hour mark of my playthrough, I was fully hooked on the game. I felt compelled to explore every corner of the map, and practiced every boss fight like how I would approach a Soulsbourne game. The game is quite hard – there were few boss fights that I completed in 1-3 tries, and many took me practicing up to an hour to crack.

I ended my first playthrough at the 26 hour mark. I still didn’t care much about the game’s narrative – but I was completely sold on the combat and level design. There are some really fun and intuitive puzzle elements to the levels – an area focused on puzzle gameplay that unlocks very late in the game is especially memorable – and I was impressed by the mileage that the level design got out of a single mechanic.

What’s most impressive about the game – and I’m paraphrasing a line from a Chinese review I had read – is that I don’t need to go out of my way to hype up this game because it’s made by Chinese devs. The game’s quality speaks for itself, and while it’s maybe not at the very peak of the Metroidvania genre, it is a very competent entry with a super-rich combat system. The production feels very mature and there doesn’t seem to be many rookie mistakes (I will complain about the font-size feeling too small for couch-play).

Death’s Door (2021)

Death's Door

I played through Death’s Door on Steam this past week. It’s a highly enjoyable action adventure that lasts about 10 hours, and to my surprise it was made by a 2-person studio (Acid Nerve – the full game credits list 8 people).

To me, the game is heavily inspired by Soulsborne and Zelda games, presented in an isometric camera view. The eponymous doors (there’s lots of them) function quite similarly to bonfires, resetting the game world whenever you go through them, and also acts as a teleportation device to switch you to different locations / levels. (The doors also reminded me of Pixar’s Monsters, Inc. franchise.)

Like Dark Souls, the level design has a strong emphasis on “connectivity” – as you explore a new area for the first time, you’ll repeatedly unlock shortcuts that take you back to the beginning area (and close to a strategically placed door). The levels are intentionally maze-like, with lots of winding pathways and verticality – for example, to access the cliff on top of you (where there’s a collectible), you might need to walk around a large section of the level. In addition, sections of the level are completely inaccessible (usually, rooms with juicy secrets) until you’ve unlocked some later abilities to your character – this is clearly meant to make the levels have repeat exploration value, as you come back to hunt for specific collectibles.

With these elements in unison, the game could feel like a chore sometimes – you could be lost (“how do I get there again?”), or just frustratingly trying to figure out how to access a secret area you’ve spotted, with no feedback of whether that goal is currently achievable or not. But these are minor gripes, especially considering that it is trivial to search online the solutions to the game’s secrets & puzzles – indeed, it took great restraint for me to not open YouTube during the majority of my playthrough (at my age, if I can’t figure out the solution to something in a game in 5 minutes, I usually start searching online, as I feel I’m “wasting time”.)

The game’s combat is simple (in mechanics complexity) but quite robust:

  • You have a light and heavy melee attack (the heavy attack can be charged up to be even stronger).
  • Melee attacks charge up your energy bar, which can be consumed as ammo for your 4 ranged abilities (unlocked over the course of the game – you start out with a basic bow / arrow).
  • You have a dodge with invulnerability-frames.
  • You have 4 health (initially, can be upgraded to 6 through collectibles) – each enemy hit always cost 1 health. There’s very limited health regen available in the levels, so there’s the Souls-like tension of trying to push to the next “break” in the level (usually unlocking a shortcut back to the nearest door).
  • Enemies can hurt each other – AOE explosions and projectiles can be utilized against other enemies. You can knock-back projectiles (e.g. a fire bolt aimed at you), and the ping-ponged projectile will damage other enemies. You can also trick enemies into environmental deaths (rolling off a ledge; walking into a laser). This creates a fun mini-game.

There’s about 10-20 types of regular enemies (your usual mix of melee / ranged / elite enemies), and perhaps 6 boss fights. Combat is about learning and reading the telegraphed movesets of each enemy, and taking advantage of their vulnerability windows. Interestingly, the game does not have HP bars for enemies (most enemies die in 1-3 light attacks anyway), but rather communicates damage state visually (blood stains on the ground, red VFX cracks in the enemies’ bodies). This ups the tension in boss-fights as you don’t have full insight on how many additional hits you need to land.

I would say the combat is not difficult (the windows of opportunity are overall quite generous), but they require discipline. I also liked some clever bits of the moveset AI – for example, there’s one fight where the enemy will always use a leap attack when you try to aim a ranged attack. I was a bit frustrated at the final boss fight (not the “True Ending” fight, the boss-fight that leads to the credits scene), I felt it was a tad overlong and felt repetitive (I hadn’t unlocked any health upgrades at the time, and I felt it was a bit punishing on 4 health). It reminded me of an extended platforming sequence in Ori and the Blind Forest (which to be fair was much more rage inducing).

In all, I felt this was a great game made by a surprisingly small team, especially considering how polished the game feels, and how good it looks. It is a good reflection of the state of the industry, where small teams through smart creative decisions (stylized art, re-usable design) and tight scope control can deliver such quality experiences.

Hades (2020)

I’ve had an interesting relationship with Hades. I purchased in Early Access in late 2019, on the Epic Games Store, when I felt it was already very hyped. I played about 20-30 runs (no clears) on 2 different saves (1 at work and 1 at home – this was before they integrated Epic Game Services for cloud saves), and moved on to other games.

When the game moved out of Early Access in 2020 – I was quite surprised at the big reception it had, perhaps even more so amongst game developers (at least those that show up in my Twitter timeline). This revealed a bias I had developed: I had subconsciously discounted the marketing opportunities of the “real launch” and the subsequent (well-deserved) critical acclaim.

I would though, love to see an updated sales figure, which would help better quantify what portion of lifetime sales are from “Early Access”.

Somewhat related: as of Mar 10, Valheim has sold 5.7M copies in 5 weeks of Early Access on Steam; what are the odds that it will have another massive adoption bump when it removes the “Early Access” label?

In any case – I got back into Hades back in January, with another fresh save. And I was truly hooked. As of this writing, I’ve spent roughly 200 hours, and have completed all achievements (it’s been a long time since I cared about doing that in any game – the last game I aimed for 100% was Red Dead Redemption a decade ago). I’m still doing 1-2 runs per day, mostly trying to beat my speedrun personal best – which, as of Mar 17, is 9m35s (the world record is 5m57s; my very first clear was over 40m).

My personal best time in Hades

Design systems

Let’s talk about the design systems that Hades employs to deliver a 200h gaming experience.

Within a “run” – leveraging randomization to create a unique experience every time:

  • A full “run” consists of 30+ rooms across 4 biomes1, with 4 boss fights.
  • Randomized room types – a “run” is constructed of a random collection of rooms (with some assembly parameters) :
    • Majority of rooms are combat oriented, with some variation in enemies composition: standard enemies rooms, mini-boss rooms, boss rooms. There are also some special objectives that can be applied, for example “survive 45s” or “compete with Thanatos to see who has more kills”.
    • Non-combat rooms: shops, fountains, story rooms (one per biome in the first 3 biome), Chaos Gates (which gives players the chance to take on some additional risk for some reward).
    • Parameters: typically, biome 1 has 14 rooms; biome 2 is 10 rooms; biome 3 is 12 rooms; the last room per biome is the boss room, while the preceding one is a shop.
  • Crafted room layouts and runtime enemy spawn behavior:
    • Rooms are picked from a handcrafted pool (not procedurally generated).
    • There are a (large) number of spawn points from which enemies can spawn; enemies spawn in waves; and spawn location is influenced by the player’s location.
    • The result is that even when the same room is played repeatedly, the flow of combat is rarely exactly the same.
  • Randomized room rewards – after the player completes a typical room, they are presented with 1-3 choices for the next room, with the corresponding reward (and sometimes indication of room type) displayed:
    • “Boons” are usually the most sought-after, and directly shapes a player’s build each run. There are 8 “standard” Gods that offer roughly 150 Boons in total, including 28 “Duo Boons” (which require any 2 of the 8 Gods as prerequisites, 8*7/2=28). There are also 2 special Gods, Hermes (with a set of Boons unrelated to other Gods), and Chaos (from Chaos Gates, who grants bonuses after inflicting debuffs).
    • “Hammer upgrades” significantly alter your weapon’s effects, providing another layer of build customization.
    • Other items that impact the run: “Poms”, which level up your Boons; gold, which can be spent at the shops in the run; “Centaur Heart” which grants bonus HP.
    • 4 meta-game currencies for permanent progression (which can impact a run, after certain meta upgrades).
  • Heat system – as a significant end-game system, the Heat system offers players a variety of choices to increase the difficulty and modify a run’s experience, for example:
    • Quantity of enemies, their HP, damage, attack speed.
    • Armored enemies have special additional effects.
    • Boss fights are modified and upgraded.

Outside a “run” / permanent progression systems:

  • “Mirror of Night” – this is the main permanent power progression system, with 12 passive ability slots, and 2 choices per slot. These passives unlock a lot of power very early on – for example the 3rd ability Death Defiance grants 1 extra revive per upgrade.
  • “Fated List of Minor Prophecies” – this is a quest system with 50+ unique quests. A typical quest is to acquire each Boon of a God at least once, and as such, quite directly encourages exploration.
  • Weapons and Weapon Aspects – starting out with one weapon, players eventually unlock 6 different weapons, and each weapon has 4 “aspects” (variants with different passives or movesets).
  • Keepsakes and Companions – “Keepsakes” are items that grant passives during a run (for example, the first keepsake listed grants bonus HP). “Companions” are a special type of keepsakes that grant a consumable active (e.g. 5 charges of an big AOE damage spell). Both are gradually unlocked by meeting with the game’s vast cast of NPCs, and progressing the narrative. In the end-game, keepsakes are integral to players crafting their desired builds in a run, as after each biome you can change your equipped keepsake, so there’s a light min-max game with keepsake management.
  • Achievements – this is the distribution platform (Steam / Epic etc.) achievements system. Functionally it overlaps with the quest system above, but provides a different set of goals. In my experience this list was easier to finish than the quest system.

I realize this is a pretty dry list to read through. But there are a few things that jumped out. The first is that these systems are quite independent, and as a result multiplicative in their impact on replayability. The second is that each system is scalable in isolation, and once scaled up in content, gives a nice boost to overall replayability. I suspect this pattern is partly a reflection of the game’s public development in Early Access: new systems were layered on over time, and content per system were also added over time. (I haven’t gone back to check the patch notes to validate this guess.) In any case, this is an elegant set of systems, and collectively the game feels surprisingly content-rich given the small size of the dev team.

Experiential recap

Recapping my 200 hours with Hades so far, the game has consistently given me a smooth experience with clear progression goals to pursue.

In the very beginning, the game is primarily about exploration: pushing deeper into the biomes, overcoming the major bosses for the first time; seeing new Gods and their Boons; trying out different weapons. At the same time, the early meta progression was generous and directly lifting the player’s power, which meant the player was making deeper runs even without necessarily growth in skill (but usually the 2 were organically intertwined).

At some point, I ran into the final boss Hades for the first time (and beat him!). This significantly moves the narrative forward – without giving away too much, this is why I embedded the soundtrack at the top. The narrative momentum compelled me to keep playing – I needed to find out what happens next, and with every full clear, I learnt a bit more. I can’t emphasize enough how surprisingly strong the narrative hook was during this phase.

After beating Hades enough times, the main narrative concluded. At this point, I kept playing because there were still more gameplay content to experience – weapon aspects to unlock and upgrade; and the Heat system which rewarded the rare currencies needed for weapons. There was also a narrative epilogue, that essentially required grinding more conversations with NPCs and increasing the relationship with them.

There were also still quests and achievements to chase, and interestingly, chasing these quests often meant playing sub-optimally, for example picking a Boon option I never played before (to move towards completing a quest), even though there’s a more powerful option.

As an aside, after about 50-100 hours with the game, I switched my input device from keyboard+mouse to ps5 gamepad. I was motivated to do so because I was seriously hurting my wrists playing this game (the game’s frantic spamming is quite excessive). One lesson of this switch-up: at least in my case, understanding of game state mattered a lot more than execution ability, as I did a full clear in my very first gamepad run, despite noticeably fighting the controls as I tried to retrain muscle memory.

Up to this point, I hadn’t really done any theory-crafting, and was not thoughtful about builds. After venturing into some Youtube content, I found myself accidentally diving into speed-running. The 2nd 100 hours was thus spent on a mix of farming Heat levels, pushing high Heat to accomplish a challenge, and dabbling in speed-running. I found that I liked the game enough to always give myself a new immediate goal, just as I was getting tired of the grind.


A section about speedruns specifically. Hades has an active speedrun community, and the game seems aware of the fact that speedrunning is a key source of community content (UGC). There are some nice nods in-game towards this: for example, right after beating your own fastest time, your character will say “I bet I can go even faster”.

As an aside, I’m the type of player that never theory-crafts builds, and rely on “netdecking” (to borrow a CCG genre term), i.e. referencing the community-discovered meta builds and strategies. So my venture into speedrunning was accidental, out of a desire to understand the meta. Once I tried executing some meta builds, I got some very addictive positive feedback as I saw my clear times dramatically decrease. At least for me, this was a very enjoyable loop, and I see it as a type of engagement lever for a pure PVE experience.

More broadly, I’ve found it interesting how the Hades speedrun community has kept engagement up, by constantly adopting new speedrun formats. What do I mean here? The main Hades speedrun leaderboard is the “Unseeded AnyHeat”, which translated to plain English is a competition to see who has the fastest time for a single clear (based on the in-game clock), at any difficulty, without manipulating the run’s RNG seeding. However, this leaderboard has gotten quite stale, as the meta has largely been solved (there is one particular weapon that is clearly the fastest), and the current best record has already been set to under 6 minutes.

If you are a speedrunner / video content creator, trying to improve your standings on this leaderboard is an effort in diminishing returns. Instead, you could switch your attention to the other leaderboards, for example, the high Heat leaderboards, or “Fresh File” (fastest time to beating Hades for the first time, from a brand new save), or 3 Weapons (3 consecutive clears, with 3 different weapons). These different leaderboards spawn their own unique metas. And it’s not hard to imagine new formats being invented – as long as there is a common interest in playing the game, and competition based on it, the community can make up new rules to play by.

In the grand scheme of things, this community is quite niche. The amount of people who are good enough, and care enough to record and submit their speedrun videos for this game is probably just a few hundred to thousand. But I think there are some useful insights here for game developers making PVE experiences and worried about long-term engagement.

  1. For those familiar with the game, I’m cheating a bit as I’m mentally treating each of the branches in Styx as 1 “room”.

2020 year in review

My recap posts on 2019, 2018, 2017, 2015. I don’t remember writing with such consistency (my son was born Jan 2016, I guess that explains the gap?). Skimming these prior posts, I do see I’m repeating myself an awful lot, but it’s still rewarding to see how the same themes (and my attempts at framing them) have evolved over time, and quite gratifying when some predictions I’ve made turn out to be on the money.

As usual, I’ll write about a few topics that I personally found fascinating.

Genshin Impact and the coming “Industrial Age”

At the end of my 2019 post, I called Genshin Impact an aspiring blockbuster, which was not that bold a claim given the viral hype (and controversy) it already enjoyed in China at the time. It has easily surpassed my expectations, even more so in western markets.

I’ve already written a long post about the game. In the aftermath of the game’s explosive launch, much of the Chinese industry chatter was about “industrialization”. I’ve not seen a clear definition of the term in this context (it seems taken for granted), but loosely, the logic is that as consumers demand higher fidelity games (rivaling PC/console AAA in quality) and ever more content, Chinese developers will have to embrace the flywheel of “bigger teams (and more specialization of talent), more sophisticated production pipelines, and more advanced technologies and tools”.

In other words, Genshin Impact is seen as a landmark game, one that has permanently shifted consumer expectations higher, and subsequently started a new industry-wide arms race in China. In my view this is quite overblown – the dominant market leaders Tencent and Netease have for years chased higher budget productions made by “armies of developers” – but Genshin captured the zeitgeist with the audacity of its vision.

What’s next? A lot of UE4 projects, for one thing. To name a few: Tencent Quantum Studios’ Dawn: Awakening is an open-world survival game (with 3rd-person shooter gameplay) made in UE4. Lilith Games recently announced Farlight 84, another UE4 project with a post-apocalyptic theme, Battle Royale PVP gameplay (perhaps amongst other game modes) and mobile-PC cross play. (I don’t know if either of these will take off – their themes lack the easy viral appeal that Genshin Impact had.) Meanwhile, Tencent Timi Studios recently posted job ads for a “AAA-grade” realistic racing simulation, built in UE4 for mobile; and miHoYo has been recruiting UE4 developers as well.

When China meets the world

Chinese game developers have for years studied and learnt from their global industry peers – whether it’s GDC talks, studio visits, academic studies or direct talent acquisition. There still doesn’t seem like a lot of information flowing the other direction – language and culture are big barriers (for Chinese developers to share outwards – the “supply” side), but lack of interest on the “demand” side has been a deterrent as well.

In this aspect, the games industry seems a step behind the broader tech sector, where Silicon Valley now clearly pays a lot of attention to trends in China. When there is more interest, and deeper exchange of knowledge about China’s game development practices, I suspect there will be a good amount of bemusement and shock from the outside.

I’m reminded of an ancient news piece – when the first MacBook Air was announced in 2008 (by Steve Jobs memorably pulling it out of a manila envelope), a group of Japanese engineers did a teardown and expressed surprise at the “wasteful” and “expensive” internal design:

“If I proposed such a design, our company would never approve it,” said one of the engineers. “I can’t find anything that is technically superior. We can make the same computer at a lower cost,” said another.

In hindsight this was obviously missing the forest for the trees – the Japanese experts weren’t necessarily wrong, but their points were irrelevant in the big picture. Game developers should avoid making the same mistake when they examine Chinese game development – the sausage might be made in an ugly and wasteful way based on your perspective, but don’t neglect the end results or their growth trajectory.

Chinese developers have been self-reflective about the gaps. For instance, in this recent interview (in Chinese, but the Google translate is well worth a read) with the head of Timi J3 (the team behind Call of Duty: Mobile), he called out investment in tooling as one area where China still has much to learn:

姚远:… 再就是欧美厂商对工具化的实践比我们强太多。之前和《幽灵行动:荒野》的团队聊,他们说花5年时间做了个编辑器。这个编辑器强到什么程度呢?基本上随便拉一下,所有村庄、道路、人物、动物、植被全都出来。这就是育碧的工业化能力。



Yao Yuan (head of Timi-J3): …Furthermore, European and American manufacturers’ practice of tooling is much stronger than ours. I talked to the team of “Ghost Recon: Wilderness” before, and they said it took 5 years to make an editor. How strong is this editor? Basically do some drag & drops, and all the villages, roads, people, animals, and vegetation will come out. This is Ubisoft’s industrialization capability.

Interviewer: Domestic manufacturers may not do similar things.

Yao Yuan: Yes, many domestic projects have no time to build tools due to development cycle constraints, but European and American manufacturers are different. Ubisoft’s editorial team will do various military and historical research in the pre-research stage, go to relevant places to collect features, improve tools, and then slowly start the project. This process is very worth learning. If you really want to pursue efficiency, you still have to be prepared from the beginning.

(English via Google translate with light edits.)

Earlier in the interview, Yao made this comment about their production capabilities:


For example, compared with a year ago, we have the same size of two or three hundred people, but our production capacity has increased by 3 to 4 times. By cooperating with an outsourcing team of nearly 300 people, we can now make several game modes and maps, hundreds of weapons and dozens of characters in one month. Although some content requires a relatively long production cycle, for example, it takes 3 months for a character to go from conceptual design to IP-stakeholder approval, but the production process and pipeline are very strong and mature.

(English via Google translate with light edits.)

So the picture here is, this team is consistently churning out vast amounts of live-ops content, despite relatively immature tooling (compared to their western peers), and their efficiency is rapidly improving. And they have stayed on top of the organizational challenges of running such a large team. And there is still a lot of productivity upside if they do seriously tackle tooling – that’s the scary part.

5 years of Honor of Kings

Honor of Kings launched in late 2015. SCMP did a profile recently, and their graphs painted the picture succinctly:

Let’s be clear: the “real” lifetime revenue is a lot higher than this $7.8B figure from Sensor Tower, as it does not include China Android revenue (understandably hard to model), and Honor of Kings has very low revenue outside China. Indeed, I would say you can double that figure to $16B and possibly still be low. Coincidentally, $16B is a cool 100B RMB, a nice round figure for half a decade.

Beyond these eye-popping (and speculative) numbers, it’s hard for me to talk about Honor of Kings without doing some soul searching. Professionally I had a ring-side seat to this spectacle – I was a part of the China team at Riot Games, based in Hong Kong in 2015/16. I played the game when it launched, and was 1) amazed by how it recreated some of the high satisfaction moments of PC MOBAs, but 2) also confident that it was not a major threat to League of Legends as the gameplay was still too shallow for core players. My main takeaway was that Riot should absolutely look into making a mobile MOBA as well.

To show my thinking then: in March of 2016, I wrote a post titled “Are mobile games disruptive?“, and the disruptive game I was talking about was Clash Royale (which took up every second of my day when I wasn’t taking care of my newborn):

I believe mobile games have so far followed the [disruption] theory here:

– They have focused on catering to previous non-gamers / casual gamers, and most of the early successes reflected this (Angry BirdsCandy Crush SagaFlappy Birds)

– These games were simpler to play, and offered less complexity in the gameplay

– These games were generally looked down upon by core gamers

What gets interesting is what happens next. The disruption theory says that from this low market position, the new entrants are able to mount an attack on the establishment thanks to both product evolution (so they catch up in product experience) and their new attributes which the power users (core gamers) previously didn’t care about.

While my memory is fuzzy, I believe I largely stopped playing Honor of Kings for fun after the initial few months. However, by Chinese New Year 2017, it was clear that a disruption was playing out according to Clayton Chistensen’s theory. League of Legends players were being pulled into Honor of Kings en masse: it turns out social ties and bragging rights were more powerful motivations to many (if not most) people than gameplay depth and mastery. But really, the bigger story was how Honor of Kings activated so many non-gamers.

So that’s what it feels like to be disrupted.

I’ve often described Honor of Kings as an attack from below – if you think of the hierarchy of MOBA players as a pyramid, with the very pinnacle being esports players, Honor of Kings successfully activated the bottom tier first. There was little organic endorsement or word-of-mouth from the establishment influencers. (The game did try to piggyback on the popularity of League‘s esports celebrities, with ambush marketing like getting Faker to do a livestream.)

League of Legends: Wild Rift, in contrast, will be an attack from above. I played a modest role in getting this project off the ground (and I’ll shamelessly overstate it on my Linkedin page), so it’s something quite close and dear to me. The existential question for Wild Rift has always been: is there any chance against Honor of Kings?

Sentiments aside, I think the answer is yes, even in China. The League “establishment” that shunned Honor of Kings have been dying to play a League mobile MOBA, and perhaps this echelon of esports pros and streamers can create a big enough beachhead. And there is still a brand premium in my opinion, though that picture is nuanced as Honor of Kings has leaned into Chinese culture – in a way, it’s a bit like Apple versus Huawei in China. At the end of the day, players across all tiers of the pyramid will try Wild Rift – the question is can Riot get them to stay.

As an anecdote, I’ve been lurking in a wechat group of League influencers who have overcome formidable obstacles to play the game on Asian servers. Some of them are already organizing pro teams and recruiting players at the top of the ladder. Their enthusiasm is infectious, and gives me cautious hope about the next chapter in this saga.

Lastly, one other personal reflection from these 5 years is that, even with the personal experience of how Honor of Kings disrupted League of Legends, I was able to repeat the mistake when it came to thinking about PUBG Mobile. I had seen an early build before its launch, and I was impressed. But my gut again told me that it would not satisfy PUBG players, and its input complexity would be overwhelming for casual players. I was definitively wrong on both – I guess that speaks to how strong one’s biases can be.

(Optional extra reading – this piece in Gamesindustry.biz shows Timi leadership’s reflections about Honor of Kings and their views on industry trends.)

China’s dynamism

Taking a step back from games for a moment. I came across this year in review letter by Dan Wang, who is a tech analyst based in Beijing. It is thought-provoking and beautifully written, and honestly I envy his prose. (Seriously, you should stop here and go read that letter instead.)

This small bit particularly resonated with me:

This year made me believe that China is the country with the most can-do spirit in the world. Every segment of society mobilized to contain the pandemic. One manufacturer expressed astonishment to me at how slowly western counterparts moved. US companies had to ask whether making masks aligned with the company’s core competence. Chinese companies simply decided that making money is their core competence, and therefore they should be making masks.

This “can-do spirit” is Chinese game developers’ biggest (and perhaps most overlooked) strength – it’s the rising tide that lifts all boats. While studios elsewhere debated first principles about whether MOBA / FPS were viable on mobile, Chinese studios simply hacked away at it. When the Chinese government tightened the publishing license process, companies rapidly pivoted to overseas expansion. And with this “industrialization” wave, Chinese developers are again just diving head-first.

Having recently lived in the US for almost a decade, I feel the stark contrast. As I was writing this, a mob of Trump supporters stormed the Capitol building. (It may well have been a scene from a dystopian video game like The Division 2.) There are bitter divides and deep social justice issues. It feels trivial, and perhaps disrespectful even, to be discussing game development against such a backdrop – but I feel the need to argue that Americans must find a way to rekindle a similar can-do spirit, and just build stuff. Build institutions, social welfare, infrastructure, housing, startups… Whatever it is that motivates you, which hopefully for some would be video games.

This is obviously a huge topic that was discussed in the US in 2020, when Marc Andreessen wrote his “It’s time to build” post. I didn’t follow the rest of the discourse closely, but I enjoyed reading this essay “On cultures that build.” I’m not well equipped to really add more to the conversation, but I will say this: China faces huge (if not bigger) societal challenges as well, but part of the dynamism is rooted in people’s belief that they can (and must) improve their livelihood via hard work. They have the lived experience of the dizzying growth – the building of everything – of the past 40 years. For Americans, more cultural exchange and economic ties with China – not less – may have a nice side-benefit in combating the complacency.

M1 Macs

In my 2018 post, I briefly speculated on “the beginning of the end of the PC (x86) platform”. With the arrival of the M1 ARM-based Macs (finally), I’d like to raise my bet.

I haven’t used a M1 Mac yet, but from everything I’ve read so far, it sounds like a generational leap in objective performance as well as subjective user experience. Now the question becomes, is this strategy and capability unique to Apple, or will others attempt to follow suit? I’d argue yes, if not simply because of the gravitational force of the mobile ecosystem. In particular, if Nvidia’s acquisition of Arm is cleared, Nvidia will be in an enviable position to attempt some big integration plays here.

If there is such a foundational migration on the Windows side of PCs, one clear worry is app inter-operability during the transition. It’s hard to imagine the Windows side offering as smooth a transition as Apple is doing with Rosetta 2, thanks to the much more fragmented hardware stack. And games as a special category of applications may suffer the worst of any transition. Again – a gaming-focused company such as Nvidia could be particularly motivated to navigate a path through this.

There is some irony, to me, if at the end of this, it’s consoles (due to their long generational cycles, and current commitment to backwards compatibility) that become the laggards that stick with x86.

Personal stuff

2020 was the first full year I’ve lived in mainland China for over a decade, and the first time I’ve lived in Shanghai. My timing was pretty good, in retrospect. When the strict lockdown started in late January, we thought we had the worst luck, but by May, life was mostly back to normal (even masks were mostly gone, except where mandated such as in public transit).

In the summer, many friends went vacation traveling again; we didn’t as we had very young children. But we couldn’t resist booking a short vacation trip for December. Alas, the weather in Xishuangbanna wasn’t warm enough to take advantage of the private pool we had in our villa, but it was still a pleasant trip.

Shanghai is a very livable city. I say that as a proud Beijinger. The summer is still too hot and humid for my liking, but the city has a good balance of culture (with a dash of western influence), urban planning, and pace of life. Beijing feels too bureaucratic, and it takes too long to get anywhere. Shenzhen feels too rushed, and the hot humidity is just as bad as nearby Hong Kong. Los Angeles – I love the climate, and the parks, but I don’t miss the driving.

The pandemic also gave me some new perspectives about effective governance. The US response has been appalling to see from afar. I wonder how much of it is uniquely the failings of the Trump administration, and how much is reflective of the general state of decay and complacency in US institutions. To be clear, I’m not looking at this from a lens of US versus China as superpowers, or other sorts of macro-economic debate. I’m much more concerned with the micro-economic life decisions we make as a family – where we should spend our precious years together, and can offer us the best mix of professional fulfillment, income, education, and life experiences. And for me the US fell a lot in the rankings this past year.

Investing: some years ago, there was a popular startup catchphrase about seizing the big trends, coined by Xiaomi founder Lei Jun: “even a pig can fly if it is in the middle of a whirlwind.” (Jack Ma, who’s living through some interesting times himself recently, apparently had a witty response: “when the wind stops blowing, it’s the pigs who fall to their deaths.”) The stock markets certainly made me feel like a pig facing a hurricane, torn between FOMO and having a nasty fall. It was quite surreal to see the market movements in contrast to pandemic life.

Remote work was a much discussed concept, and a collectively forced experiment. In my case, with 2 young kids running around the apartment, working from home simply did not work. When my older son’s kindergarten re-opened, it was marginally better. I’d probably need a private office away from the office to make remote work viable.

To wrap up with the games I played in 2020. I played various mobile games due to professional interest, but the one that stuck with me, surprisingly, is Merge Mansion. (Disclosure: my current employer, Supercell, invested in the developers.) I’m not a puzzle game player, and this is a game that’s still very early in development with a lot of rough edges. But it became the perfect time-killer game, and I’ve averaged 20 minutes of play every day for several months now.

On PC/console, I played Hades more during early access in 2019 than I did in 2020, but I should go back and play it some more to experience the complete game. During the depths of the spring lockdown, I occupied myself with Ghost Recon Wildlands and The Division 2. Fall Guys probably brought the most joy and laughter, and it was eye-opening to see how much it resonated with my 4 year-old. Later in the year, Ghost of Tsushima was an easy crowd-pleaser, which I spent more time on than I should have.

The game that resonated the most with me though, without a doubt was The Last of Us Part II. Its harrowing discussion of trauma, empathy and perspective-taking was particularly fitting for these times we live in. And the toxic fandom around the game felt like an inadvertent meta commentary that echoed the game’s core themes. Months after my playthrough, I still think about my experience with the characters. Perhaps it’s time to pop the disc into that new PS5…

Genshin Impact (2020)

Genshin Impact has had a great global launch – indeed, I struggled to come up with some good comps on Sensor Tower as it has really stormed out of the gates. In terms of launch revenue, I actually couldn’t recall a better game than Pokemon Go. See below launch-aligned revenue graph:

If we just look at China, where it’s easier to compare apples-apples (at least for iOS only, since Sensor Tower doesn’t track China Android), we have an early 3-way tie across AFK Arena, Brawl Stars and Genshin Impact – as some of the best launches of 2020:

As a side note – AFK Arena’s $60M launch month on iOS in China (in January before Chinese New Year), is the best new mobile game domestic launch this year as far as I can tell. (The usual caveats about lack of China Android estimates apply…)

But, Genshin is not just a mobile game – in China, it launched on PC first on Sep 15, a full two weeks of early access. I still find this an unusual choice – the most affluent, hardcore gamers rushed in on day 11, but the negative reviews came in almost instantly. Snobby PC/console gamers mocked the game’s lack of polish and lower graphics fidelity compared to premium AAA titles; whereas mobile gamers looking for a progression head-start via PC immediately raged at the poor gacha loot table. They didn’t hold back their emotions on Taptap:

The poor reviews didn’t seem to impact sales much (and the Taptap crowd is hard to please). It’s also interesting to contrast this reception with the western audience reception – there seems to be a lot of voices expressing surprise that the game offers so much content and is free.

In any case – it’s very early days yet as we are barely two weeks into the official launch, but all things considered it’s a great start for Genshin Impact. It will be fascinating to see how the game trends over the next few months.

Core gameplay

The game is quite well-reviewed on Metacritic (though a small sample size), and deservedly so. The scope of the open world, the combat system, and the character roster (and their visual presentation) are impressive.

The game is most fun (I’m currently Adventure Rank 27) when you are doing the dependable open-world loop: you start out with a particular objective (maybe a quest, or just a point-of-interest you spotted in the horizon), and along the way you get side-tracked by numerous side content. There is a lot of side content: collectibles, side quests / daily missions, environmental puzzles, loot chests that respawn periodically… You get the picture.

Genshin Impact certainly takes a lot of inspiration from Zelda: Breath of the Wild‘s open-world formula, but ventures far enough to end up in its own place. The biggest departure is combat: Genshin referenced the elemental interactions from BOTW, and converted it into a catchy combo system that still feels intuitive enough. It can get repetitive, but it’s still satisfying to set up an explosive fire-lightning combo (for example), and there are hints in the equipment system (I haven’t gotten far enough yet) of intriguing build possibilities.

Personally, I’m not too concerned with the graphics fidelity on PC – I’ll always take smooth frame-rate over graphics quality, and this is where Genshin does not fully deliver. On mobile, I can’t run reliably run 60fps on an iPhone XS Max (even when I toggle everything down); and the game’s min-spec on iOS is iPhone 8 Plus, which suggests dev challenges with performance optimization (in comparison – PUBG Mobile‘s min-spec is iPhone 6s).

I do want to talk a bit about gameplay feel and polish, where Genshin is behind its PC/console peers in some areas. As a player, I found myself often wrestling with the game’s character, camera and controls (the “3Cs”), on mobile (more egregious) as well as on PC. Some examples of jank:

  • Ranged aiming feels finicky in general, even on PC with mouse; sensitivity settings are too coarse in my opinion. And for mobile / PS4 there should have been some aim-assist support (even if they can be turned off).
  • The camera has janky movement at times – as a tiny example, when you fall and roll forward, the camera takes too long to recover from facing downwards, and requires a manual adjustment2.
  • Some characters have attacks that dash through the enemy, which would require you to rotate the camera 180 degrees to see the enemy again. This is in my opinion dangerous design space for a 3rd-person mobile game with virtual joysticks.
  • Similarly, the Traveler’s ability that creates a giant rock is also dangerous design space in combat: this is a climbable rock that can cause unintended player interactions; and it often displaces enemies to the top of the rock, where they don’t seem to know how to get down (and thus severely disrupting combat pacing). The fact that the ability is aim-able is also stress-inducing on mobile.
  • Enemies who are displaced from the combat area (for example, falling off a cliff) get reset (with full health), which is often frustrating.

I’ve also found the game’s boss fights tend to have more jank and annoyances. For example, the first major boss fight below:

There’s a bunch of things here that irritated me (and yes, my skills are probably below-average…):

  • The level requirement stated upfront was a bit of a misdirection, as you are given a trial character with their own level, and the whole fight is primarily designed for that character.
  • Unskippable cut-scenes, which is a pretty big no-no if players have a chance of having to replay this fight several times (which I did…).
  • The flight combat sequence starting around 1:30 has readability issues, with the backdrop that is quite static and the boss always center-screen – the first 2 times I played this fight, I didn’t understand I could actually fly towards the pick-ups (I tried maneuvering and felt I couldn’t change direction).
  • The final phase has a custom camera angle (side-scrolling), which is a bit jarring as most of the game you are not driving your character’s movement primarily with left/right input. Combined with the ledges, this created a level where I fell off quite a few times – while not lethal, it was very annoying for combat pacing.

Over time, the player learns to work around these problems, but there’s clearly a gap in terms of the developer’s capabilities, sensibilities, and/or priorities – these are the 20% issues that can take 80% of the time to solve to get that AAA polish.

Progression and monetization

When it comes to progression and monetization, Genshin at a high level shares a lot of the generic Chinese mobile RPG template (of which AFK Arena, mentioned earlier, is the current best-in-class example).

The basic formula of such games is a deep progression system (with layer upon layer of different stats to chase), with stringent upgrade gates interlaced with periods of relatively smooth leveling. The stringent upgrade gates provide heavy incentive to do the daily/weekly grind for resources (certain key resources can only be farmed on specific days of week). And the sheer amount of dimensions to progress (amount of characters + depth of each character) converts into aggressive monetization design, where ultimately cash can be turned into characters (through gacha), upgrade resources (directly purchased), stamina for grinding resources and so on.

This is the rinse-and-repeat formula that hundreds of Chinese games have used – Soul Hunters, Naruto, Honkai Impact 3rd, Onmyoji, Arknights, AFK Arena, to name just a few of the biggest over the past decade.

The marriage of such a formula to the open-world gameplay in Genshin is at first jarring – the early leveling experience of a player who immediately spends several hundred dollars on gacha is going to be very different (and arguably for the worse – as all sense of early pacing is out the window) from a non-spender. I know such a gamer – he is trained to plunking down a few “648”s (by convention the most expensive SKU in the cash shop, roughly $100) any time he starts a Chinese mobile game – and were it not for social peer pressure, he would have churned several times by now (despite spending almost $1k already…).

After 20 hours in, when I’ve largely picked up the various complex systems and are somewhat invested in some characters, the disconnect starts to go away. It becomes very clear that access to a lot of fun gameplay is gated behind monetization – the 5-star characters that everyone is enamored with are not going to come easily (and even if you unlocked them – you need so many duplicate copies to fully level up their powers). You can still have a good time – but you will be missing out on a lot of gameplay possibilities.

Regardless of whether you monetize or not (or how much), the grind is still somewhat egalitarian3. That’s the other funny part of this RPG formula – it demands both money and time.

Usability pains

One part I’d like to complain loudly about is the game’s UI/UX and usability issues – not only because I suffered lots of irritations here, but also I feel there’s a hard-to-measure (but perhaps material) impact on the game’s engagement. Genshin is already overloaded with design complexity (as is typical with Chinese RPGs), and the usability issues amplify the cognitive load.

I already discussed some issues in the gameplay section above, but here are a couple of examples specifically about the UI. This part of the discussion is quite tactical.

First, I found it baffling that the map and quests UI were not integrated. They are activated via separate buttons on HUD, and don’t link to each other.

On the world map, you actually can’t see available quests (with the exception of the 4 daily quests). You have to “track” a quest in the Quests UI for it show up in the map. This would be much less of a problem if the Quests UI were available as a pop-up / side-bar in the Map UI. But currently, you have to jump back and forth across 3 UI screens to complete a simple action of “select a quest and find nearest teleport point”.

The Map UI is also lacking functionality in some other basic areas. For instance, you can place custom nodes on the map to keep track of points-of-interest (players use it to tally the important collectibles, for example). But you can’t “navigate” to a custom node, which feels like a pretty useful interaction.

For an open-world game, the Map feature should be something that really emphasizes ease of use – help you make decisions about what to do next, and get out of the way as fast as possible, so you stay immersed in the world. But in Genshin it currently is subpar compared to most contemporary open-world games (e.g. Ghost of Tsushima for a very recent example). I honestly can’t remember the last time I was so confused at the map feature of a game in this genre.

The second UI issue I’d like to talk about is the various screens related to character and team management – I did a quick navigation flow to help illustrate my point:

Broadly speaking there are 2 distinct needs: roster selection and character management (leveling, gear management, skills upgrades etc.). So having separate menu entry points for “Team setup” vs “Character” does make sense, even though they could be combined in an alternative flow. But I find the “Characters” vs. “Character” flows puzzling – they are largely made up of same/similar screens (just with reversed navigation), but there are some weird UI inconsistencies:

  • The ordering of characters is inexplicably different – in “Characters”, sorted by level by default; while in “Character”, the active roster is shown first, then the rest by levels.
  • The “Characters” screen and the “Character selection” pop-up also make for an interesting comparison: these two screens have largely the same layout and high level purpose (view list of characters, select one to navigate to), but have numerous small UI differences (list of 4 in a row vs 3 in a row; blank space vs. right bar of character details; “X” vs “back” navigation buttons…).

I might sound nitpicky here, but these small inconsistencies add up to unnecessary cognitive load (forcing the player to actively think), which begs the question of why do these 2 largely redundant flows exist?

To me, this is a reflection of lack of holistic game polish, and perhaps related to the production culture, which I’ll do some extrapolation and speculation below.

Closing thoughts

I wrote a post last year “Assessing China’s game development capabilities.” I think Genshin Impact is a continuation of the trends I discussed there, but it should also be proudly celebrated by Chinese developers as a product breakthrough in original IP on the global stage.

It succeeds in part due to its sheer audacity in vision and content scope – original IP, open-world, cross-platform (with mobile as the core), and years of live-ops content runway. miHoYo is well positioned to tackle this, having honed its IP creation skills in the Honkai franchise, and with good access to China’s “industrial scale” mobile production capabilities.

I do think it’s a “quantity over quality” approach, as I feel the game clearly prioritized volume of content (and future expansibility) over polishing details. But again, this is the proven formula for Chinese devs – getting the fundamentals barely good enough, then production scaling like crazy. Whereas western devs tend to be wary of the content treadmill (e.g. WoW’s expansion cycles), Chinese devs seem unfazed about embracing it. They don’t enjoy it – but they are more willing to grind it, and for the successful games, the economics seem to pay out well. While we don’t know for sure currently, I expect Genshin to have a stream of major updates planned already (the next one is probably close to completion by now), and the update cadence may again surprise the global audience4.

(UPDATE: the update schedule was actually announced, and it looks like initial reactions from the hardcore community globally was disappointed. See this reddit thread.)

Where Chinese devs should/need to grow further, in my opinion, is the discipline, thoughtfulness, (and frankly) prioritization of better UX5. This is not easy to do – in my personal experience, I’ve found Chinese devs’ strong production-scaling tendencies and general haste to be big barriers for holistic game polish. But as the market, and gamers, get more demanding, I expect higher emphasis here in future, which may force shifts in development models.

Before I forget, a couple of things to highlight that are part of the game’s breakthrough:

  • First is localization: I played the English version for a while before switching back to Chinese, and I thought the English localization had very high production quality, made by a veteran team of writers and VO cast.
  • Second is the music: I love it. It’s clear no expense was spared in music production, and the soundtrack is lovely. However, sometimes the music transition triggers seem a bit ungraceful (again, perhaps one of these polish cases).

At a macro level, I think it’s safe to speculate that Chinese devs are going to have even bigger ambitions post-Genshin, despite significant external headwinds (China-domestic regulations, state of economy, global geopolitics). The NA/EU market is the last frontier geographically. It will also be interesting to contrast East/West approaches to cross-platform: Chinese devs will be grounded in mobile-first (otherwise they leave a lot of money on the table with the China-domestic market), whereas western devs will tend to prioritize PC/console à la Fortnite.

  1. As a sign of Chinese gamers’ constant vying for status (which is a huge part of their motivation for gaming), gamers actually complained loudly that miHoYo opened the servers a couple of hours ahead of schedule – they felt betrayed about missing out on snatching a sexy low-digit UID.
  2. I don’t remember specifically, but this was probably one of the ear flicks that caused me to give up on using a controller on PC.
  3. If you spend for stamina, you earn the privilege to grind more.
  4. While simultaneously being criticized by Chinese players for being too little too slow – such is the diminishing returns.
  5. by UX I’d like to refer to this particular framework here.

Epic vs. App Stores

The ongoing fight between Epic and Apple / Google is one of the biggest tech stories of the year. The situation is very fluid, with a lot of developments since last week, and a ticking time bomb by end of August.

Not surprisingly, there’s been a lot of “takes”, most of which is candidly not too useful, and a small amount that have covered the situation from insightful angles. Instead of regurgitating these insights, I thought I’d just list a few here (most of these are usual suspects if you surf a lot of tech punditry):

The Chinese Android app stores example

I think it’s rather futile to debate the abstract merits of “open” vs “closed,” which at the ideological level is the heart of this fight. Tim Sweeney has been very consistent over the years – his public criticism of UWP is spiritually similar to his stance against Apple / Google, and I believe it’s stemming from not merely a business interest calculation (though he is often accused of such), but a genuine belief in “open.” 1

Instead, I think it’s more useful to discuss the Chinese Android app distribution landscape, as a real example of why Epic’s desired state (open up iOS to 3rd party stores and alternative payments) may not be good for consumers. (The linked Chinese post above is a great read on this, below is my brief summary of the same topic.)

When Google abruptly exited China in 2010 (and along with it, the Google Play store), there was a gold rush to fill in the vacuum left in the Android ecosystem. At a 30,000 ft level, a series of things happened:

  • In the beginning there was a flood of independent stores, with notable ones like Wandoujia (funded by ex-Google China head Kaifu Lee’s Innovation Works) and 91 Assistant.2
  • In a landmark deal at the time, Baidu acquired 91 Wireless (which owned the 91 store) for almost $1.9B in 2013.
  • As of 2013 Tencent also had an Android app store MyApp. After Tencent leveraged WeChat’s popularity to promote MyApp (“if you wanted the latest version of WeChat, go to MyApp”), MyApp gradually became one the most popular stores.
  • In 2014, prominent Chinese Android handset brands (with the exception of Xiaomi) formed a coalition called the “Mobile Hardware Alliance”. A major goal of this coalition was to exert influence in the distribution of games (which was recognized as the key cash-cow in app stores) in the Chinese Android ecosystem.

The current state of stores, at a high level, is this:

  • All the Chinese Android brands have their own stores, and because of the coalition, these stores have significant weight.
  • Tencent MyApp is the biggest non-OEM owned store.
  • The once prominent independent Android stores (without backing of OEM or a major social app like Tencent’s QQ/WeChat) are greatly declined in presence.
  • Collectively there are still dozens of stores.

How about the economics – let’s talk about that 50%?

  • There isn’t a unified rate – everything is negotiated. But indeed, if you are a game publisher not Tencent or Netease, the 50% store cut is the common term you will get.
  • Strictly speaking, this isn’t an “Apple-apple” comparison, as these Chinese Android stores call this “joint operations” of games where in theory they are providing more value-add (funneling more traffic etc.).
  • The prevailing rate for Tencent and Netease have been pushed down to 30%. (And of course Tencent keeps 100% in its own MyApp store.)

To summarize, the Chinese Android app store landscape is very much objectively a worse state than the Apple / Google monopoly Epic is complaining about:

  • Consumers have a confusing user-experience (overwhelming amount of store choices, fraud / security / malware concerns, inconsistent UX of the same app across different stores).
  • Developers are typically giving up a much higher share of revenue.
  • Developers have a lot more development costs / headaches (support dozens of app stores, SDKs, builds).

To be clear, it’s not a certainty that we will see a similar end-state if the Apple / Google “app distribution market” and “payment market” is opened up by regulation. (For one thing, the Hardware Alliance thing is clearly suspect to anti-trust scrutiny.) But it is clearly a possibility with strong factual support.

Problems that Apple should address

Having argued why “the grass isn’t greener” on the other side that Epic desires, let’s briefly talk about issues that Apple should tackle. This part is focused on gaming specifically.

For the 30% rate, I do believe (and clearly I’m biased with a vested interest here…) that this should be pushed lower with how the ecosystem has grown and evolved, even if purely arguing from an economies of scale perspective. Ultimately though, economics are a reflection of “who owns the customer”, so Valve’s model of volume-based tiers (starts at 30%, drops to 20% for sales above $50M) isn’t a bad reference. (This is also the common logic in retailer / wholesaler agreements.)

(Alternatively, Apple can continue to make confidential deals with the biggest partners, offering rev share discounts on a case-by-case basis.)

Apple also should update its strategy (and thus policies) regarding emerging services like cloud gaming. The rejection of Microsoft xCloud on iOS feels short-sighted, and untenable in the long-run if cloud gaming does take off. (It’s also a bit silly that at the same time thousands of HTML5 games are available directly within WeChat, which seems like a much bigger violation; arguably xCloud is offering much better games that would enrich the user-experience of iOS gamers.)

To end on a light-hearted note. Every time I write about Apple and mobile gaming, I will bring up my dream for an Apple-designed controller peripheral. I don’t think that will ever happen, but one can dream…

  1. Conversely, Apple, like Nintendo, like Disney, have been decades-long champions of the “closed” side of the debate. Just for transparency, at at the abstract level I lean closer to this camp, because I idolize seamless user experiences (which are typically easier to realize in a “closed” ecosystem).
  2. As a sign of the times, a popular feature-set back then was a PC client that was a storefront and also a manager for the download and installation to the phone, similar to using iTunes to manage iPhone apps.