The 游戏演义 Genshin Impact Series - Part 1: What is Genshin and why should you care?
Tech Otakus slang gacha Waifus
What is Genshin Impact?
Genshin Impact (PC, iOS, Android, Playstation, Switch) is a free to play, open world, third person action RPG that takes place in the world of Teyvat, a land once ruled by a technologically and magically advanced civilization that received its powers from 7 elemental “Archons.” There’s a lot more lore in there but I spent every cutscene furiously mashing the non-existent skip button. You play the Traveler, a laconic boy or girl (your choice) who gets unceremoniously yeet-ed to Teyvat, where you begin your refreshingly original quest to find your kidnapped sibling with your ethereal fairy hanger-on Paimon, a pouty keychain troll version of Cyberpunk 2077’s edgy AVALANCHE founder Keanu Reeves.
You collect “waifus” and “husbandos” in the suspiciously Zelda-like cel-shaded lands of Mondstadt (German for Moon City) and Liyue (璃月) while slaughtering endless hordes of hapless hilichurls in pursuit of - what else - ever more expensive power-ups increasingly gated behind time and $. Solve puzzles, string combos, climb mountains, bake food, and watch idle animations of anatomically overdeveloped adventurers. Genshin Impact is best summarized as a combination of Breath of the Wild, Monster Hunter, and any time-gated mobile free to play RPG with a healthy measure of JRPG fan service sprinkled in.
The name Genshin Impact, which henceforth I’ll call Genshin (Chinese yuan2shen2 原神) translates to “original god” or in-game as “archon.” Impact was clearly added as a nod to our industry’s historic affectation for superfluous gibberish in video game titles. Only in the video game anime genre could a Chinese developer publish a Chinese game with a name that is both Japanese and English and create zero questions for its intended userbase. Fortunately for its confused titling, China, Japan, and America happen to be in order the largest markets by revenue for the game.
Here Comes the Gacha
Genshin has been an incredible commercial success and the undisputed industry unicorn of 2020. The game recouped its reported $100M development and marketing costs (though this is likely significantly underestimated) within 2 weeks of launch. By end of year 2020, Genshin had been downloaded by nearly 40 million unique players across all measurable platforms. The gravy train shows no signs of stopping with a lifetime to date reported revenue of $873M:
As stated in the above graphic, the revenue is significantly underreported due to the proliferation of Chinese third-party Android stores whose data are not captured by mobile app industry amalgamators. Nonetheless - you get the picture - Paimon is printing renminbi.
As the game’s monetization is tied to spending ‘whales’ chasing limited time content using gacha - a gambling system using in-game and real world currency for slot machine “pulls” - revenue has shown few signs of slowing. Revenue spikes are generally tied to the introduction of new characters via limited time event gacha banners:
Additionally, there are limited time event banners for rare weapons, but data shows the ‘limited time’ characters are the lion’s share of gacha pulls.
Assuming ongoing development and marketing costs of $200M per annum and $1B in revenues, that’s an operating profit of $800M per year and a gross margin of an incredible 80% (calculated before Unity and platform take rates). Revenue vs. time appears stable and even rising - a significant feat for a single player content-driven game. Assuming market expansions, IP product branches, and ever-deepening Genshin monetization rigor, miHoYo will enjoy an enviable financial position for the next few years.
miHoYo - Tech Otakus Save the World
miHoYo (米哈游) is a Shanghai-based game studio and publisher founded in 2012 that has grown through successful anime-style mobile game releases into a company of ~3000 personnel and >$1B in annual revenues. In a domestic market unapologetically dominated by Tencent and NetEase, miHoYo’s international success with Genshin has broken the mold. To put in perspective just how historically dominated China’s video game market has been by Tencent and NetEase, take a look at market share by company the year before CNBC and your grandmother you don’t call enough realized gaming was a thing:
Chinese Gaming Market Share 2019 - Seems like very fair competition to me!
That venture-funded miHoYo self-published the biggest ever global launch for a Chinese game speaks to the growing dynamism of a market western competitors have routinely overlooked.
2020 has seen the rise of Chinese game studios to international prominence with AAA hits Call of Duty Mobile and Genshin Impact developed by Chinese studios and enjoying both critical acclaim and global commercial success. With AAA trailers like Soulsborne-inspired Black Myth: Wukong unexpectedly dropping on YouTube to millions of views, rumors of various in-the-works projects like an Honor of Kings MMORPG, and an additional $20B investment in international game development by Tencent, Chinese developers seem poised to take their place as leading producers of high-end content capable of competing with established Japanese, American, and European incumbents in their own right.
Common dismissals of Genshin and why these opinions are Nitpicking and Biased
Before I introduce the 6 innovation categories I want to explore in this blog series, I would like to address 3 common lines of dismissal of Genshin from coworkers and friends. While everyone is entitled to their opinion on how they enjoy any game they play, I do believe that some opinions I hear are factually incorrect or would benefit from product/cultural context. Even if my arguments fail to sway folks on the merits of Genshin, I still believe it is absolutely necessary for game industry professionals to understand the commercial, gameplay, and design innovations of this game and implications for games as a service going forward.
Nitpicking and Biased Opinion 1: It’s a Zelda: Breath of the Wild Copycat
Within a week of the game’s release this had become the dominant narrative surrounding Genshin’s design and gameplay. This 100% has merit as an observation. No one at miHoYo is likely to deny that nearly all of the ways the player character interacts with the open world and most of the gameplay systems are straight rips from the beloved Nintendo entry. For many game industry professionals, Genshin represents just one more contemptible entry in the long line of game developers who have shamelessly stolen the creative energies of more talented forebears for commercial gain.
Unfortunately for the scores of environment artists lovingly crafting the worlds of Teyvat and Hyrule, users will only notice the anxiety-inducing stamina bars.
My Response to Opinion 1
First of all, so what? Even if this game were a complete rip of Nintendo’s tour de force, iterative innovation on proven concepts has been a fundamental strategy of video game developers since the days of Pong. Just considering the copyright law perspective, it is incredibly rare for major video game titles to successfully sue competitors for stealing concepts, such as the ill-fated Bluehole suit against Epic Games over gameplay similarities.
Indeed, a common rule of thumb in the video game concept phase of production is that 70-80% of gameplay should derive from proven, successful concepts and 20-30% of gameplay should be open to iteration. I believe that Genshin has certainly passed the 20-30% bar on gameplay and design innovation.
Genshin is a deep-progression RPG with live services guaranteed for the coming years. It’s more or less a single-player MMORPG take on the fundamental systems that make up Breath of the Wild, and if current content cadence remains in place, Genshin will have ~10 times the in-game content (by hours of free to play content) of Breath of the Wild when this version sunsets free of charge. This doesn’t include the new systems and features continually introduced, such as the Theater Mechanicus tower defense mode.
Nitpicking and Biased Opinion 2: It’s Icky Fan Service
Ok, folks may have a point with this one. Genshin for me represents the perennial problem I have faced whenever I have enjoyed anime-based art: you can’t introduce normie friends to anime. No matter how many times you explain how Naruto is an allegory on the value of perseverance or how Cowboy Bebop has the GOAT soundtrack, you’re going to feel that small shame when your normie friends notice the amazing attention to detail miHoYo developers invested in Beidou’s pirate boob physics:
In sexual preference fairness, there is no shortage of memes praising earth (and stonk) god Zhongli’s sculpted-from-stone butt:
Though I believe the sexualization of some characters is generally overplayed in media, the upcoming introduction of a dating sim questline is gonna rustle my gamer jimmies. As every activity introduced in Genshin provides power-up materials for completion, I will suffer through the stifling kawaii.
Genshin character artists and narrative writers have seemingly scoured the anime landscape for every character trope they could possibly include and thrown in the kitchen sink. The overuse of the eyepatch, made famous by Space Pirate Captain Harlock, is my singular annoyance in this regard:
Unsatisfied with the ocularly-challenged lineup to date, miHoYo has 2 more visually impaired characters in the pipe (La Signora and Dansleif). You would think the propensity of Genshin characters to get their eyes put out would create demand for good eye-pro, but you can see even the accident-prone Bennett is relaxing his steampunk goggles.
My Response to Opinion 2
Core users’ preferred characters are generally not the most egregiously fan servicey types, and simping seems most correlated with performance level (with the exception of the lovable but useless Amber). Additionally, money talks, and Genshin and plenty of other fan servicey AAA content make lots of it. I assume that competitors will eventually introduce products with art styles that appeal more to western normie sensibilities.
Also, did I mention the game has one of the highest female userbase percentages in AAA RPGs?
Nitpicking and Biased Opinion 3: Gacha ruins the game!
I’m going to immediately respond to this opinion and explain it throughout. Western gamer historical arguments against pay-to-win monetization is generally predicated on two assumptions, neither of which are satisfied in the case of Genshin. The two assumptions are best exemplified by the most infamous money grab in video game history - Star Wars Battlefront 2. Essentially none of the core cast of characters showcased in trailers and advertisements were available to free to play users at launch, meaning customers who wanted to play Darth Vader had to shell out extra cash after buying a $59.99 game. Additionally, users who purchased character access had a competitive advantage over their free to play counterparts. These two factors combined to create the most downvoted Reddit comment in history:
Assumption 1 - It is a content gate
Nope. Genshin’s 50+ hours of launch content are entirely free and completable for free to play users. The majority of players do not spend money in-game. That being said, spending money certainly gives the user a gameplay advantage in the form of character and weapon power-ups as well as time-gate skipping.
Assumption 2 - It provides a competitive advantage
So far, there are no player vs. player features in Genshin. Were miHoYo to introduce player vs. player, it would be reasonable to assume there would either be a bifurcation of the population into paid and free to play users for said feature, or power levels would be homogenized among participants.
I win, bye bye
The 游戏演义 Genshin Impact Series
Hopefully, I have persuaded you that Genshin is worthy of study for anyone working in the gaming industry or who wants to understand trends that will define the future of game development and culture. If so, I would like to present to you the content you can expect from me over the coming weeks in this ~7 part series deep-dive of Genshin.
Part 2: Monetization Systems and Innovations
This article will explain all facets of Genshin’s various monetization systems, economic models that explain user behavior, innovations introduced by the developer over rival titles, and ideas for continual improvement.
Part 3: Development and Developer
This article will investigate the development of Genshin (to the extent public sources permit), the history and aspirations of miHoYo, and implications for western developers of the rise of global AAA Chinese game development.
Part 4: Publishing and Live Ops
This article will timeline the publishing decisions of Genshin, critique publishing and marketing performance, explain and analyze live ops to date, forecast live ops for the foreseeable future, and offer some recommendations on live ops direction moving forward.
Part 5: Content-driven Games as a Service as a Platform
This article will elaborate on what I believe to be the most important innovation of Genshin - the transformation of a single player content-driven game into a games as a service/platform with monetization potential that significantly outstrips AAA titles with greater development budgets and brand recognition. Product strategy models will be used to describe what I believe is a paradigm shift in content-driven game development and publishing.
Part 6: Art Style, Combat, Engine, and Performance
This article will look into the art style and influences of Genshin (beyond just Breath of the Wild), a breakdown of the game’s compelling combat system, the capabilities and limitations of the Unity engine on the game’s development, and technical performance of the game on market devices.
Part 7: Story and Cultural Influences
This article will explain the story of Genshin to date and the industry antecedents that likely influenced the story direction. I will also elaborate on Japanese, western, and Chinese cultural influences on the product. I will explore the coming influence of Chinese culture on future international game development product decisions.
Thanks for reading my post! Please feel free to subscribe and follow me along this journey through Teyvat and beyond =)
You gotta up your SEO it was impossible to find this thing without a direct link to it. Great stuff!
Very cool -- as someone who loved in China for a while, I'm excited to see content like this. Especially looking forward to part 7!