Text | Lujiu Business Review
On the 26th day after the pre-order was opened, the number of pre-orders for “Ru Yuan” exceeded 8 million.
Although it cannot be compared with domestic games that have over 10 million reservations, as an otome game with a niche theme, which has been focusing on overseas in the early stages and has no official promotion in China, the current performance of “Ru Yuan” can be considered satisfactory.
A year ago, Lingxi Interactive Entertainment launched the Three Kingdoms-themed otome game “Codename Kite” overseas. Within a few days of its launch, the game became popular among domestic otome game players with its R18 love interaction and court intrigue as the main plot. For a time, social platforms such as Xiaohongshu, Douyin, and Weibo were full of installation packages and accelerator tutorials. Baidu Index shows that within a few weeks of “Codename Kite”‘s launch, its search index was more than 4 times that of Tencent’s “Light and Night Love”.
Obviously, the players who played the game have made the overseas version of “Codename Kite” popular. With the real money support of the players, the arrival of the Chinese version of “Codename Kite” seems inevitable. After all, the game structure is basically set up, the user base is relatively stable, and the version number has been successfully obtained. As long as the server is set up, it is a fact that you can make money without doing anything.
It is not difficult to draw such a conclusion. Within 8 hours after the pre-order for “Ru Yuan” was opened, the number of reservations exceeded 3 million.
The reverse overseas expansion of “Codename Kite” seems to have become Lingxi Interactive Entertainment’s new overseas expansion strategy: build a name overseas, and then return to China to make money. Operating servers on both sides at the same time not only expands the user base, but also brings in more revenue.
Overseas gilding has become another way for game companies to expand overseas.
The long road back home
The erotic plot and attractive male beauty are almost the first impression that “Codename Kite” leaves on players after it goes online.
In contrast to the bland plots of domestic otome games, the R18 love story and the main plot full of backstabbing and intrigue in Codename Kite can be called a “carnivore’s heaven”. Even across the sea, domestic otome players are willing to set up a server and download a few dozen minutes to enjoy the “sexy” of Codename Kite.
This group of “hungry” players even once pushed the game accelerator biubiu launched by Lingxi to the top of the popular application list, not to mention the game itself. Even though the in-game krypton gold needs to be exchanged for US dollars, and the real-time changing exchange rate causes players to lose some, players have never stopped krypton gold.
Sensor Tower shows that in May 2023, the second month after the launch of “Codename Kite”, its cumulative revenue on the Hong Kong and Taiwan servers of IOS reached 880,000 US dollars. During the same period, the only domestic otome game with higher data than this was “Light of the Night and Love”, which was 1 million US dollars.
It can be said that compared to other otome games, “Codename Kite” is doing quite well overseas.
However, when Lingxi decided to bring “Codename Yuan” back to China and transform it into “Ru Yuan”, it was unanimously boycotted by players.
Yu Lan, 24, is a new player of Codename Yuan. She has spent nearly 1,000 yuan on the game so far. After hearing the news that Codename Yuan was about to be launched, she felt like she was “stabbed in the back.”
“Who will compensate me for the exchange rate loss!” Yu Lan said, “The price in the game is fixed, but the exchange rate changes every day. Some people even monitor the exchange rate and exchange dollars for everyone else just to play the game. If they suddenly say that the game will be launched in China, then what will the money and time we spent before mean?”
The loss of money and energy is one of the main areas of complaint for players, and on the other hand, players are concerned about changes to game content.
27-year-old Zhang Ying is a typical otome game enthusiast. In addition to “Codename Kite”, she has played 4-5 domestic otome games. Among them, she even spent nearly 10,000 yuan on “Time and Space Painted Traveler” launched by NetEase. As a loyal krypton gold player, she is more worried about whether Lingxi will give up the construction of overseas servers after “Ru Yuan” is launched, and her krypton gold will go down the drain. Secondly, if “Codename Kite” is deleted and modified according to the standards of domestic games, it will have a significant impact on the characters and plot.
“‘Codename Kite’ is originally set in the Three Kingdoms period, and many of the characters in it do not match the historical prototypes. In order to avoid subsequent troubles, the characters may have to be changed, and that would be the end of the show,” said Zhang Ying.
Some players also expressed the view that “Codename Kite” will be a “bastard” in the future. After all, the benefit of “Ru Yuan” currently having “make an appointment to get calls from the male lead” has never been enjoyed in “Codename Kite”.
Amidst various concerns and anger, some players chose to delete or sell their accounts, and reported Ru Yuan on a large scale. Ru Yuan’s official Weibo account also responded to this, and as of press time, the number of comments under the Weibo post is still increasing.
Although this “export to domestic sales” approach is normal in the eyes of professionals, Liu Qing, who has been engaged in overseas game development for nearly five years, believes that an important aspect of the launch of “Ru Yuan” is to make money. On the other hand, she speculates that perhaps the positioning and content of the game itself in the early stage were not suitable for domestic distribution, so it chose to test the waters in overseas markets and then slowly return to the domestic market.
“The Three Kingdoms theme of “Codename Yuan” is destined to have a domestic market. Otherwise, why did it choose the Hong Kong and Macau servers? Think about it carefully.” Liu Qing said.
Returning to China for development is imperative
Even though players are dissatisfied, the publicity and promotion of “Ru Yuan” has already spread on the Internet.
The information flow of Moments, Baidu web pages, Weibo opening screen, Xiaohongshu opening screen… “Codename Yuan” failed to have the promotional effects, but “Ru Yuan” not only achieved them one by one, but also almost achieved the maximum value that a game can achieve.
For “Ru Yuan”, Lingxi is willing to spend time and money.
Obviously, regardless of whether players pay for it or not, for Lingxi, the launch of “Ruyuan” is a premeditated data migration.
This is not unrelated to the industry environment.
At the beginning of 2024, a melee of otome games quietly started in January. Not only did “Love and Deep Space” and “Beyond the World” open servers on the same day, but they also rolled up player benefits. One gave players 100 draws, and the other immediately followed up with 101 draws. According to Diandian data, the turnover of “Beyond the World” and “Love and Deep Space” from January 20 to January 26 was 119 million and 123.6 million yuan respectively, which is higher than “Genshin Impact”.
At the same time, the battle between otome games and the hip-hop circle a few days ago not only gave the outside world a clearer understanding of otome games, but also made people more aware of the money-making ability of this market and the loyalty of otome game players.
In short, although it is a niche market, its conversion rate is extremely high.
These attributes give otome games higher commercial value. In 2024 alone, “Light and Night Romance” co-branded with many leading brands such as Heytea, Holiland, and Pop Mart, “Beyond the World” officially announced 8 endorsements in one day, and KFC also chose “Love and Deep Space” and “Beyond the World” and other otome games for co-branding.
Although there is no data to evaluate the effectiveness of these collaborations, the answer is already obvious given their high prices in second-hand markets such as Xianyu.
At the same time, the overseas market for otome games has developed relatively maturely, especially in the Japanese game market, which makes the competitive pressure relatively high. According to the “2024 Japanese Mobile Game Market Insight Report” released by Sensor Tower, in the first half of 2024, the number of downloads in the Japanese mobile game market increased by 2.5% year-on-year to 320 million times. At the same time, due to exchange rate fluctuations, in-app purchase revenue fell by 17% year-on-year to US$5.3 billion.
The size of the domestic otome game market has shown an extremely high growth rate. According to the “2024-2029 China Female Game Industry Market In-depth Research and Development Trend Report” released by China Research Institute, otome games have grown significantly thanks to the increase in the number of female players and the improvement in their spending power. Among them, the size of the domestic female game market reached 16.62 billion yuan in 2022, a year-on-year increase of 12.8%. This growth trend is expected to continue in the next few years.
How could Lingxi not be envious of such a big cake?
From the perspective of the game itself, Codename Kite has cultivated enough loyal players in the past year of overseas operation, and it is time to return to China to allow the game to develop in the long term and accelerate the efficiency of attracting players. They know that even if they return to China, these loyal players will find it difficult to give up the game easily. In this way, they can not only hold on to highly loyal players, but also develop new markets, which is not a loss in any way.
An employee who has been engaged in overseas business for four years at a game company in Guangzhou revealed that Lingxi has now shifted its recruitment focus to the direction of “domestic female-oriented game operations”, and the scale of recruitment is not small, which is enough to show the importance and confidence in “Ru Yuan”.
No matter what, this is an inevitable journey back home for Lingxi.
Going overseas and then returning to China, does Lingxi’s “reverse overseas expansion” work?
First gain fame overseas and then return to China to make money. This reverse overseas expansion model seems to have become a new methodology that Lingxi has found in its game overseas expansion strategy.
Following a similar pattern, Lingxi launched a mobile game called “The Eve of Forgetting” at the end of last year. This mobile game is currently only available on Hong Kong and Taiwan servers, and domestic players still need to use an accelerator to play it. However, in August this year, “The Eve of Forgetting” was officially launched on the Steam platform, and the “Wishlist Joining Plan” was launched a month in advance. Although it has not been substantially launched on the national server, the distance between it and the national server has been greatly shortened. In the eyes of some players, “it has already stepped half a foot into the national server, which is confirmed to be a bottoming behavior.”
However, players still have doubts about whether “The Eve of Forgetting” can really be launched on the Chinese server. They think that because its theme is Cthulhu mythology, it may not be able to be launched on the Chinese server due to scale reasons. But with the example of “Like a Kite” in the past, no one can give a definite answer.
It is not difficult to see that the “Codename Kite” model has become a trend in Lingxi.
Alibaba’s latest financial report mentioned that Lingxi Interactive Entertainment’s operating performance has improved significantly this quarter. As early as last year, professionals pointed out that although Lingxi’s main product “Romance of the Three Kingdoms: Strategic Edition” had a 20% annual revenue decline, it had already made multiple layouts, which could not only offset the decline in the performance of “Romance of the Three Kingdoms: Strategic Edition”, but could even drive performance growth, and “Codename Kite” was one of the layouts.
Now it seems that those speculations have been confirmed.
In the view of some analysts, “Ru Yuan” may be the main growth point for Lingxi in the next quarter.
Of course, all this depends on how Lingxi can stabilize the opening of “Ru Yuan” while protecting the interests of overseas “Codename Yuan” players so that the latter will not counterattack the game again. In the final analysis, whether this “reverse overseas expansion” model is Lingxi’s new antidote still needs to wait for the direct feedback from players after “Ru Yuan” goes online on September 26.
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