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Tencent vs Huawei, I support Tencent, but also understand Huawei

via:博客园     time:2021/1/2 23:42:05     readed:109


I understand, Godfather. It's all business.

Wen / Pei Pei

Source: Internet Troll group (ID: tmtphantom)

On the first day of 2021, all Internet practitioners, investors and game players were brushed by an explosive news: Huawei game center announced that all Tencent game products would be taken off the shelves. It is said that this is because Tencent asked Huawei to reduce the proportion of channel account sharing, but Huawei refused.

The protracted war between domestic game manufacturers and Android mobile phone channels has reached the third stage. The previous war has been very fierce, but the influence is still limited to a small scope; now it's completely playing big, and it's hot searched by major social media and search engines. First of all, let's review the historical war situation

In July 2019, it was reported that Tencent was negotiating with Huawei and other Android mobile channels to reduce the channel split ratio (from 5.5 to 3.7), and new games such as "Jianwang 3's fingertips" were included in the negotiation. This matter was settled later, and it seems that no result has been reached.


Game R & D refers to the game development process, from planning to art to program. For example, Tencent Tianmei studio group developed "call of duty mobile game", so Tencent is the R & D side of "call of duty mobile game".

Game channel refers to the way in which players finally get the game, download and install the game. For example, some domestic users of call of duty mobile game download it directly from wechat game center and QQ game center, while others download it from android app stores such as Huawei and Xiaomi. Tencent itself is an important channel, and Huawei and Xiaomi are also important channels.

So the question is: Tencent itself has the two most powerful channels, wechat / QQ. Why should it cooperate with Huawei? The number of wechat users in China is certainly more than that of Huawei, and more than that of any Android mobile phone manufacturer. The vast majority of wechat / QQ users first learned about the existence of a game through the built-in game push function of wechat / QQ. In this case, why let Huawei and Xiaomi make up to 50% of the channel share ratio?

In other words, since Huawei is not willing to reduce the channel to account ratio, why didn't Tencent break up with it as soon as possible? It had to wait until now to break up, and Huawei took the initiative to break up? It seems that this is not quite in line with business logic. After all, if we break up early, Tencent games will all go through wechat / QQ channel, and the gross profit rate can be increased by a large part, and the total flow plate may not drop much (I'm afraid there are not many people without wechat / QQ in China).

The reason is very simple: domestic Android mobile phone manufacturers have mastered the bottom of the system and have almost endless means to control app manufacturers. Even companies like Tencent dare not fall out with them.

The crux of the problem is that there are too many domestic android channels. Apple's App Store accounts for only 30% of its channels, overseas Google play accounts for only 30%, and steam accounts for only 30% of its PC terminals. Many developers / publishers think this proportion is too high. Domestic android channel is not good, the industry rule is 50%. In any major country or game market in the world, this kind of channel has the highest share ratio, and there is no one.

To be fair, Huawei's app store is already very high-quality in the domestic android channel. After all, it has a large number of high-end users and high user loyalty. If we switch to other Android channels (the name will not be changed), the game manufacturers will suffer more. It's just enough to work for the channel, and they won't get any benefits.

Huawei and other domestic Android mobile phone manufacturers' dilemma is: the gross profit rate of Android mobile phone is too low, the hardware does not make money, and they have to rely on the game to earn back. To put it bluntly, gamers are subsidizing the whole domestic mobile phone industry. It seems very simple to reduce the split ratio, but it may shake the foundation of the domestic mobile phone industry chain, leading to a series of chain reactions.

Huawei, oppo and vivo are not listed. Let's take a look at Xiaomi's financial report: in 2019, the gross profit margin of Xiaomi's smartphone business was only 7.2%; in the recent quarter, with the strong growth of sales, the gross profit margin of the business was only 8.4%. There is no doubt that this is a very low gross profit rate, even lower than the most bitter traditional manufacturing industry in our minds. Huawei's gross profit rate may be a little higher (because of its slightly higher brand positioning), but it is certainly not much higher.

I am an apple mobile phone user, but I also admit that the cost performance of domestic Android mobile phones is higher than that of apple. A new Apple flagship with a price of more than 7000 yuan is probably comparable to a domestic android flagship with a price of more than 4000 yuan only in terms of configuration and running points. Domestic android manufacturers suffer from extremely low (even negative) gross profit margin in exchange for huge market share. Imagine, if the price of domestic Android phones is at the same level as that of apple, who will buy them? Isn't that clear at a glance?


We are not charity, we all want to make money

Now the contradiction between Tencent and Huawei has become public and white hot. What I am more concerned about is what will happen next. Tencent has not yet made its position, and Huawei has only made a preliminary statement, which may not be reversed in the future. According to our estimation, what will happen next is nothing more than one of the following three roads:

Tencent and Huawei took a step back and reached a new agreement around products such as call of duty mobile games, adjusting the split ratio in exchange for products to be put on the shelves again. It's the least influential outcome, and frankly, it's unlikely.

Tencent and Huawei have suspended cooperation in the game business, but Tencent still cooperates with mobile phone manufacturers such as oppo, vivo and Xiaomi, and other game manufacturers will not follow up. We will continue to watch the changes, and the changes in the industry situation are limited to a small scope.

In your opinion, which of the three paths mentioned above is more likely to become a reality? Which path would you rather see come true?

I hope everything can be solved in a way beneficial to the content side. In the final analysis, what is good for the content side is good for the user.

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