Summary of Key Points
Alibaba's sale of Lingxi Huyu and ByteDance's sale of Mutong Technology indicate that most major domestic platform-based internet companies (such as Alibaba, ByteDance, Kuaishou, Bilibili, etc.) have either withdrawn from or scaled back their gaming businesses. Currently, only Tencent is still able to manage both its platform business and gaming operations effectively, while NetEase has transformed into a pure gaming company. The reason behind this is the significant conflict in business logic between platforms and gaming, as well as the high difficulty of managing them. Large companies sell their profitable gaming subsidiaries to free up funds for investment in more capital-intensive areas like AI. Tencent's relatively "laissez-faire" organizational culture and its early entry into the industry have made it an exception. However, the development of AIGC (Artificial Intelligence Generated Content) brings new hope to the gaming sector.
I. Collective Withdrawal of Platform Companies from Gaming: Only Tencent Remains in the Dual Front
Today's major domestic internet platforms (companies with vast user bases like Alibaba, ByteDance, Kuaishou, and Bilibili) have largely abandoned their efforts in developing games. Alibaba sold Lingxi Huyu, ByteDance sold Mutong Technology (the remaining projects of Chaoxi Guangnian may also be sold), Kuaishou's self-developed games show no promise, and Bilibili's gaming business has stagnated. Only Tencent is still able to make both its platforms (WeChat, QQ) and its games ("Honor of Kings," "Peace Elite") highly successful. Although NetEase is officially a large company, it has long become a pure gaming company—its revenue and market value come almost entirely from gaming, with non-gaming businesses (such as education, music) having been spun off.
II. Platforms and Games: Two Businesses with Incompatible Logics
Why do platform companies struggle with gaming? The reason is that their business models are fundamentally different:
- Platforms are "fast-moving companies": They focus on efficiency and quick response. For example, an app can be launched first and then improved; if a button color doesn't match the design, it can be changed, and functions can be refined over time.
- Games are "slow-moving companies": Their success relies on creativity, and even a small flaw can be detrimental. If the plot, graphics, or gameplay of a game are compromised, players may not buy it, and once a bad impression is formed, it's hard to recover.
If large companies want to succeed in gaming, they need to support teams with cultures that differ significantly from their own. These teams require freedom to create, but senior management often interferes (given the strategic importance of gaming), which can stifle creativity. Lingxi Huyu was able to perform well precisely because Alibaba gave it enough autonomy to make its own decisions and generate revenue through games like "Romance of the Three Kingdoms: Strategic Edition" without relying on the parent company.
III. Why Are Profitable Gaming Companies Sold? The Blame Lies with AI's High Costs
Lingxi Huyu and Mutong Technology were both profitable businesses, but their parent companies still decided to sell them. The reason is simple: large companies need to invest in capital-intensive areas like AI. AI research and development require substantial funding, and selling these profitable subsidiaries allows them to quickly reallocate cash to support new initiatives. The buyers (such as Saudi PIF, Xincheng Capital) generally do not interfere with the company's internal decisions, allowing Lingxi Huyu and Mutong Technology to continue developing.
IV. Why Is Tencent an Exception? A "Laissez-Faire" Culture and Early Opportunities Are Key
Tencent is the only major company that can manage both its platform and gaming businesses effectively due to two key factors:
- A "laissez-faire" organizational culture: Although it's often criticized for being decentralized, this structure actually benefits its gaming division. Gaming teams can operate independently, and acquired companies (like Riot Games, Supercell) can work according to their own methods without being constrained by the parent company.
- Early entry into the industry: Tencent entered the gaming sector in the 2000s when competition was less intense, allowing it to accumulate valuable experience and resources. Later entrants (like ByteDance and Alibaba) faced a more competitive market and found it harder to establish a foothold.
V. The Gaming Industry's Future Is Bright: AIGC Brings New Opportunities
Despite the withdrawal of large companies, the gaming industry still has a promising future. AIGC is creating new possibilities, such as video and world models that can enhance game content. Interactive narrative games have become popular this year, demonstrating the potential of AI to lower the barriers to creativity for developers. For those in the gaming industry—whether at Lingxi Huyu, Mutong Technology, or other companies—continuing to pursue their passions will lead to new opportunities.
The article concludes with a song lyric that offers encouragement to gaming professionals: whether they choose to leave or stay, the days spent chasing their dreams are worth remembering, and there are ample opportunities ahead.