Make development platform with game engine and realize long-term profit

Early this morning, the game "fishing Tatsu people" developers "touch Technology" formally to the U.S. Securities and Exchange Commission (SEC) submitted an IPO prospectus, to the highest financing of 150 million U.S. dollars. The touch-control technology program is listed on the Nasdaq stock Exchange, with the underwriters being Morgan Stanley, Deutsche Bank and Chinese renaissance, which have yet to disclose stock trading codes or circulation.

Touch technology was founded in 2010 by Chenhao and Liu Guanqun, initially by the largest Apple developer community in the country Cocoachina, and then joined the mobile gaming development and distribution business, representing the game's "Catch People" series and the famous game development engine cocos2d-x. In addition, the recent touch also launched an advertising platform, including the application of the integration wall, recommended wall, Banner, plaque and other forms of advertising.

Before the listing, touch technology completed four rounds of financing, cumulative financing of 83 million U.S. dollars, including: a round of 1.2 million U.S. dollars (2010); b round in August 2011 received the investment of the 14 million dollars, the C round in April 2013 received GGV enities investment of 18 million dollars The D round was awarded 50 million dollars in August 2013 by the new Newhorizoncapital capital.

According to the prospectus, in terms of finance, the 2013 revenue for Touch technology was 555 million yuan, compared with 76.5 million and 8.7 million in 2012 and 2011 respectively. The 2013 mobile game revenue accounted for 547 million yuan, online advertising revenue of 8.15 million yuan. But in fact, touch technology is still at a loss, with a net loss of 88.306 million yuan in 2013, according to generally Accepted Accounting Principles (GAAP), and an increase of about 69.5% from last year. If not in accordance with the generally Accepted accounting principles (NON-GAAP), the net loss of 2013 years is 49.753 million yuan, which is about 2% less than 50.82 million yuan last year, and the loss is narrowed.

Analysts believe that the loss of touch technology mainly stems from r&d input: In 2011 to 2013, respectively, for scientific research inputs 1206.5, 3892.2 and 105.193 million Yuan, is 3 times times growth, 2012 r&d investment growth or even more than the total operating cost growth.

In terms of equity, the CEO and Chairman of the board, Chenhao, holds 22.5 million common shares, accounting for more than 15.5%, and chief operating Officer Liu Guanqun holds 22.5 million shares, accounting for 15.5%, and two of Northern Lights to 3426 share 23.7% as the biggest shareholder in touch. The remaining shares include Steamboat Ventures V, L.P (12.6%), GGV datastore (12.5%), Sequoia Capital (8.9%) and brighfish Investment (7.7%).

The prospectus also mentions that, as of now, Touch has invested a lot of money in a game development platform based on the open Source Engine (cocos2d-x), but it has not started to make a real profit. But then touch technology will continue to work together with engines, forums (Cocoachina) and Cocostudio to build a state-of-the-art platform for game developers to provide services and solutions in terms of operations, billing, content localization, data analysis, technical support and advertising operations, and to provide users with a more attractive mobile entertainment experience, and finally hope that in the game distribution and mobile advertising in both the realization of monetization.

For the success of the touch, most of the reason comes from the team's grasp of the market, Chenhao has mentioned two principles at the Gmic Conference:

First, understand the market, understand the market growth rate and development momentum. I have 02 years to do the electricity business, 99 to do excellence, excellence in the acquisition of the time is also 300 million yuan annual income, but today a three-stream network of electric dealers also reached the annual revenue of 300 million yuan. 2011 to 2012 do not make a movie, make money in 2013, Micro Bo even have a joke that the 2013 movie can make you pay for the past 10 years to earn back. So, the time point of doing things is very important.

The second is to understand the composition of the user and the source of the user. In many cases, we have serious information asymmetry in the market and need to deepen our understanding of the market. Grasp these two points, you have the opportunity to get opportunities in the market.