In recent months, the world’s media has lit up in celebration of the tenth anniversary of the App Store. But did anyone stop to notice another app with a 1 billion-plus user base, WeChat, celebrating a milestone of its own, for its arguably less flashy applet store?
WeChat mini-games are getting bigger, in a small (no pun intended!) but significant way. The company has just announced that maximum file size of its in-app microgames will double from 4 MB to 8 MB, and code packages will be upgraded so that users can load the enhanced games with minimal lag time. It’s a hard balancing act to satisfy demands for better quality and deeper content while addressing anti-addiction and data security concerns. But it hasn’t stopped developers diving into content, gameplay, optimization, and releasing new games. Each Monday, game speeds are rejigged and updates released. With mini-games monetizing fast via advertising and in-app purchases, WeChat has announced in-game ad daily transaction volumes of up to RMB 10 million.
WeChat has signed contracts with several mini-game content provider firms, building a product matrix that draws in players who in turn energize the new sector. The recently launched features—mini program toolbar, brand search and product type search, and open applet—and tablet version performance upgrades, include loading support for independent performance packs and optimization. Helping to lower the development threshold for advertising monetization, enhancements include a self-service ad placement app.
100 days after the launch of mini-games, WeChat published its commercialization statistics: daily ad views on its platform were over 10 million, eCPM (earnings on every 1000 ad views) were more than RMB 80. From just 17 mini-games initially (exemplified by the game Tiao Yi Tiao), there are now over 2000 mini-games. Latest statistics released shows that of the top ten mini programs, 6 were mini-games, with top place going to Tiao Yi Tiao. In second place was the massive hit Haidao Laile or Pirates Ahoy! Now with 8 MB to play with, mini-games are even more appealing to developers and investors.
Official figures show there are now more than a million mini programs in circulation. The sector is awash with over 1.5 million developers. Average users open these applications four times a day, showing that mobile users have made checking mini programs as much of a daily habit as checking moments or using voice chat. Given this, how open will mini programs remain going forward?
On July 9, WeChat opened its advertising channel to mini programs (including mini games). Programs with a minimum user volume (UV) of 1000 and no serious violations on their record could apply for advertising space via the mini program backend. In terms of ad sharing, for games with fewer than 100,000 daily users, earnings are split 50:50; for games with more than 100,000 users, they are split 30:70, with the platform taking the lion’s share.
Android users may also make in-game purchases, with WeChat earning 60:40 along the way. An RMB 500k subsidy policy has also been adopted to support games with fewer than 500,000 transactions in 2018. For successful applicants, WeChat promised to waive its 40% cut on in-game purchases. As of the end of June 2018, hundreds of partners have signed up.
Currently, most cash is flowing into banner ads and incentive videos, of which the latter cost more and have a greater impact. According to the mini games team, the next step is to open mini games to select custom ads and integrate ads into game content. McDonalds’ product placement in Tiao Yi Tiao, putting its logo on the springboard, was the first trial.
Taking advantage of WeChat’s open lecture series, we talked one-on-one with the director of WeChat mini-games and developer of the mini program ecosystem,Li Qing.
From his point of view, in terms of business model evolution, games have always been the most mature segment of the commercial web. Besides direct moneymaking options, he feels there are plenty of other untapped opportunities. Take traditional offline chain stores for example: you can play a game while waiting in line and earn a discount coupon to spend in a nearby restaurant. To this end, mini programs have done a great service to traditional commerce, despite having started as being pure “fun”. Zhang Xiaolong’s hope is that mini programs will go on to solve needs in a range of scenarios.
At present, mini-games have deep access points, and users need to use search, WeChat games, or recent apps to find them. Li Qing says that mini-games will decentralize in line with WeChat’s overall strategy. “To become decentralized, it’s best to not have a single entry point.” Currently, mini-games have “friends playing” and “select” functions, legacies of the initial launch, but these may be phased out in the future.
Some mini games are already attracting more than 100 million monthly players. According to data provided by Hortor’s CEO Cao Xiaogang, leading mini game Haidao Laile! has daily users numbering 20 million, and more than 100 million a month. Two leading mini-game companies are competing head-to-head: Beijing Hortor Games and Shanghai Aiwei Games. The former brought out viral hits Haidao Laile!, Fengwan Caitu(Crazy Images), and Tounao Wangzhe (Brain King), and the latter Sunyou Quan (Friend Loss), Kuaile Liubianxing (Happy Hexagon), and Mengquan Bianbianbian (Cute Dog Change). All have had success in H5 games and can leverage this to draw in players interchangeably from both formats.
At the recently concluded TechCrunch summit in Hangzhou, many investors pointed out where the richest mini program investment opportunities lie: O2O, content payments, social e-commerce, and mini-games, with mini-games their overriding favorite at present. Out of all mini programs on the Aladdin Top 100 list, the fastest growing are mini games. A year ago in September 2017, game applets made up just 4% of the Top 100. Now they have risen to 33%.
Mini programs are deepening cooperation with the offline retail ecosystem. WeChat applets can lower usage thresholds for plug-ins, especially for smaller weaker businesses. WeChat login, payment, full-page plug-ins, etc., provide developers with services to better support offline retail, including membership points, coupons, and returns on purchases. “The mini program is a perfect membership carrier,” Li Xiang, head of e-commerce at Baiguoyuan, said in a WeChat open lecture. Baiguoyuan used the mini program function to develop its own options, raising the average daily customer flow to more than 20,000, with a nearly 40% secondary conversion rate, and about 15% new users.
Official WeChat press releases have revealed that users now open an average of 4 mini programs daily, of which up to 54% are actively clicked on. It’s clear that the previously misunderstood mini program is already changing the O2O shopping ecosystem.
Is there one particular way to work with mini games (everyone loves playing them)?
With social gameplay worked in, mini games are perfect for our time and capabilities. We have real examples to share. I can recommend two games Haidao Laile! and Board Game, but how to factor this in from an R&D perspective? Mini-games are a sub-category of the gaming industry, but they don’t need a completely new playbook. I’m sure there are innovative gameplays out there, but we’re not at that stage yet.
Looking at the whole gaming industry, are mini-games going to become a major channel for new releases?
I think it’s really up to the developer. In my position, of course I’m going to say they’re really important. My feeling is that if we spoke to a developer, they would use mini games as a tool no matter what their end goal was. They’re a good way of testing new products. We don’t think that’s wrong. Any developer who uses mini games to achieve something is a full member of our ecosystem and deserves the very best service. As for lowering the production threshold, our vision is that any middle school student, any kid even, can put together a mini game. It may just be for their mom, their dad, or a bunch of friends, but if it works, that’s an outcome we’ll celebrate. But whether a game will grow or be sustainable over the long run, it’s not something we can plan, but more a choice everyone makes together.
Has WeChat given the mini-games department internal KPIs?
No, we haven’t had any KPIs set as a department. One point I’ve just mentioned: the advertising flow factor, one side of which is having someone willing to supply traffic, and the other is having someone willing to buy with real money. The incentive videos I mentioned are a good source of supply because all developers need to use this to make a numerical analysis of gameplay, and many developers are willing to access and use it for supplying traffic.
The essence of mini games is that they are “small”, something well suited to the “small is beautiful” camp of development. Do you think new giants will emerge in this field?
Whether or not new giants emerge I don’t know, but I do know that games require a degree of expertise, and with the research that goes into career game developers’ work on gameplay, they can more easily break into the market and experience a fast growth curve amid strong competition.
If I have a good idea, I can implement it and have room to grow on my own. One situation like this is with the developer of Rexue Guanlan (The Dunk of Death). I remember there were four or five people in the company. They made a good product, and thus its market positioning and scale were set in motion. In other words, as long as you have a clear understanding of your market positioning, no matter how large your existing team, it will not affect the success of your next product. This is what is meant by giving mini game developers more opportunities.
Have any foreign gaming developers or world-renowned gaming developers taken part? As for custom mini-game products, could this encourage more developers to enter the ecosystem?
We are doing some translation work on development guidelines and have a few case studies already. On the side of development tools, our R&D team is also doing some things relative to the layer of development tools, so we feel that for overseas developers, there is a place to find public information. We can develop testing grounds, but we will still have to comply with national laws and regulations because games are cultural products. In addition, there are some things we will not customize. We won’t be using our official voice to tell people what to do, as this doesn’t sit well with our company ethics. So I’ll just emphasize that as long as it is in compliance, the platform belongs to everyone. The less intervention, the better.
After mini programs were launched, there were many naysayers. The change has been huge. What have you had to go through in terms of getting recognition for mini-game products?
We find it greatly encouraging that there are people in the ecosystem who are willing to spend their cash supporting this kind of development. This really keeps our team going. This is quite interesting and we are going to put more effort into this aspect going forward.
You ask what we’ve experienced as a team? I’ll share a story. There was a discussion in the first team to work on mini games, well before the official launch, about how to innovate. What kind of mini games would be offered to consumers? At the time everyone’s mind turned to making money, and that without it, there was no way forward. Games development was all about riding this wave. In the process, it was hard to shift direction on this, so the team started to take it a bit lighter. Maybe anyone can play, and we don’t know how to make money anyway. We were getting a bit lost, so in mid to late April and May, I got everyone together again. What was it we wanted to do? To my surprise, everyone was completely open. We knew one thing: that the commercialization of game content was directly proportional to the strength of the platform. In the current situation, advertising revenue would support the survival of a small team. They would only need to work on the innovation of the content itself. I started thinking there was a big chance here, and that a flourishing ecosystem would drive good game content by itself.
–This article originally appeared on Technode.