Value-added service helps to diversify from vertical gaming enterprises

Event background:

October 15, 2012 night, gathering time to the U.S. Securities and Exchange Commission submitted a prospectus, officially on the Nasdaq IPO.

Iris Analysis:

The current operation status of the gathering time:

Core business: Advertising, games, yy value-added services, business is gradually inclined to value-added services

According to the prospectus disclosed in the gathering time, the company's revenue structure found that the era is from advertising revenue-oriented business to provide users with value-added services and online gaming business. 2009 mainly rely on online advertising and online game two main business, respectively accounted for 57.7% and 39.7%, 2010 online games to 67.3% of the share of the era of the most important business, 2011 years later, online games are still more play net flow of the first choice, revenue accounted for nearly 50%. In addition, the gathering era made full use of yy huge user base, the introduction of some series of user value-added services, which YY music rapid growth in 2011 to obtain nearly 50 million of the revenue, in the first half of 2012 more than advertising revenue became the second largest business in the era.

In terms of profitability, the 2012 gathering era of the formal realization of profits, 2011, 2010, 2009 losses reached 80 million yuan, 240 million yuan, 50 million yuan. During the gathering time from the advertising business to the game and YY value-added services need a higher cost of research and development products, according to the prospectus, 2011 research and development costs accounted for 23.5%, 2012 first half rose to nearly 36%. 2010 of the losses reached the highest level, mainly due to the expansion of personnel, Product research and development and part of the patent legal fees, March 2011 YY Music officially launched the mark of the time yy value-added business molding, in the new product before the need to invest in a certain research and development costs, YY Mobile client development, virtual currency, social platform voice and video functions will continue to bring research and development cost pressure. In addition, in terms of the number of employees in 2009, the number of employees was 339, 2010 to 600, 2011 reached 854, as of September 2012, the total number of employees reached 1222, the company's human expansion further increased the cost of expenditure. In terms of financing, the gathering time after a total of 5 financing, 2005 by Angel Investment 1 million U.S. dollars, 2007 Morning Hing Venture investment 4 million U.S. dollars, 2008 steamboat Investment 5 million U.S. dollars, 2009 GGV cast 23 million dollars, The Tiger Fund invested 100 million dollars in January 2011. From the point of view of financing, 2010, 2011 is the financial support, is the gathering era in the expansion of the stage, relative to its investment costs.

The core success factors of the time:

1, high-quality information sites for users, to serve advertisers, the formation of the initial advertising revenue-oriented business model. Multi-Play Network is the first batch into the game vertical information industry website, with the "World of Warcraft" and other popular games to rise, its website provides professional game information initially attracted to the depth of game enthusiasts, in the industry to form a reputation and rapid development, with high-quality video, information and other services gradually formed the industry leader and bring flow. The use of Game information Web site's high flow of further services to advertisers, advertisers favored to form a certain revenue, this is the gathering era by relying on more games information site to obtain revenue from the original source.

2, mining more play network user attributes, make full use of their own traffic to carry out web game business, the formation of the web game through the revenue-driven business model. More play network to meet the demands of users of the game, its site to game users, and these users have a strong desire to play a network of web games with congenital advantages.

3, yy Voice to meet the game user communication demands, the core services to users, improve advertising high bargaining power and high media value. YY Voice to meet the user's communication demands to become the core product users. YY bundled a number of game users and the formation of high viscosity, which makes yy voice of the media value highlighted, improve YY client advertising bargaining power.

4, YY voice business Diversification development strategy, the formation of YY value-added services. According to the prospectus, YY music service has become the company's second business beyond advertising revenue, voice software has a weak relationship, the characteristics of a single transmission, the choice of music, education, video services to meet its product characteristics.

Eric analyzes that summing up the business success factors of the time is not difficult to find, the success of the Times is to serve the game user demand-oriented business, from the initial ads to the web game to YY Voice, are based on the entire game industry service mining, which became the core success of the era.

Income present situation and enterprise strategy trend in the gathering time

Income Status: Multiplayer network coverage tends to be stable, the game advertisers the overall amount of swing fluctuations, advertising, games imagine little space

Eric Consulting organized the Gathering era ads, game revenue, 2012 game revenue reached 150 million yuan, 2011 annual revenue of 170 million yuan, 2010 growth rate of 500%. Advertising, 2010-year advertising revenue for 40 million yuan, 2011 reached 90 million yuan, the overall maintenance of 100 % of the growth rate. Multi-Play Network is one of the core business of the Times, its advertising and web-game transport for the gathering era brought rich income.

According to iresearch Eric's introduction of the continuous user behavior Research system iusertracker the latest data show that In the 2011.8-2012.8 China Game Information Web site monthly coverage of the number of TOP5, the end of 2011, Tencent game channel beyond more games to become the industry's leading group, and more games to increase the growth of a smooth second group.

According to the latest data from the Iadtracker network advertising monitoring system, China's online game advertisers are the total amount of money in the stable fluctuation rise, the peak in 2012 Q3 reached 240 million yuan, the valley value in 2008 Q1 amounted to 130 million yuan.

Iris analysis, according to the Iadtracker monitoring data show that online game advertisers overall budget gradually stable, in the overall industry environment tends to stabilize the background, in advertising to achieve high growth income is not high. According to the Iusertracker monitoring data show, more play network in the game information industry flow also tends to stabilize, in the domestic web game in the context of high-speed growth period, the gathering era of online game business revenue growth will be flat in the industry growth rate. Therefore, Eric believes that the gathering era of advertising, gaming business revenue growth will gradually slow down.

Strategic development: YY Voice strategic transformation, music, video, education and other value-added services to help YY voice to the multi-interactive entertainment concept of community

Voice software is a simple Exchange service products, in addition to some of the membership of the business model can not directly bring the realization, so with other instant messaging software similar, yy through the provision of value-added services to achieve profitability. According to the prospectus, YY voice service has become the company's second largest business and maintain a high growth rate.

Iris analysis that, yy value-added services will help gather time in the capital market to get more expectations, the reasons are the following, first, in advertising, the game is the bottleneck of the situation, with the help of YY value-added services can improve the profit growth point of the times. Second, YY value-added services can share business risks and achieve a healthier business structure. Third, yy value-added services will yy voice from a purely game-related services to an interactive entertainment, community concept business, so that the capital market for it has a higher desire to first space.

Competitive risks in the future of the Gathering Age:

According to iresearch, the Internet User Behavior Research system iusertracker the latest data show that in the instant messaging software industry, the number of YY monthly coverage continues to grow, Tencent's QT voice has been renewed since last year, its monthly coverage of the number of stable growth. More play yy and Tencent QT Voice is the main market for the game's voice aids, its business characteristics are more similar, from the data we found that more play yy growth trend has not been affected by Qtalk, voice software brand building visibility in the industry will form a certain threshold.

Iris analysis that the key advantage of the gathering time is that they fully dug YY voice platform characteristics and the use of YY huge user scale, to provide users with weak social characteristics of entertainment, education services, the right positioning to become YY value-added services to the success of one of the important factors. But compared to other instant messaging software, YY product genes attached to the development of network games, mainly game users, how better to attract players other than the game to become more play must be considered one of the problems, and how to consistently implement a good bundle of user strategy and the use of value-added services to realize the realization becomes more play next development focus.

Business opportunity and crisis: yy and game penetration advantage is obvious, qt voice break yy mature brand difficulty quite big

Eric Consulting selected the current market for different types of representative games, through the analysis of YY and QT voice and game user permeability to determine the current two software in the market influence, we found that each section of the game yy user penetration rate is much higher than QT voice, even the "League of Heroes", "through the FireWire", "QQ speed", " Dungeons and Warriors "Tencent's network game, YY is also in absolute advantage."

analysis that voice software is accompanied by the development of online games add-on products, yy after years of operation, has established a mature brand image, on the current yy and QT voice status, yy in the game penetration advantage is obvious, but Tencent sits on the top of China's network game, and has a user desktop portal, If continued to exert voice business, will be YY future development of the biggest competitor.

Comprehensive analysis, Eric said: The game is the growth of the era of the cornerstone, YY business to gather from the vertical industry to diversified industries.

1) Advertising, games, yy value-added will continue to pillars the situation, the game is still the main channel of the time to become a party, play and yy media attributes determine the time to run online games game has a congenital advantage. Advertising, more play to its own flow, the user is relatively high quality, easier to achieve accurate advertising, through advertising will flow out of the pressure is not. YY value-added services will become one of the company's important strategic objectives, by virtue of services will be YY business from the vertical industry to a diversified industry.

2 yy Voice is based on game-assisted service development products, voice products is a weak social relationship characteristics, the time to choose music, education and other services to accurately control the voice business single transmission of the main characteristics.

3) from the YY voice users, the current product has a similar nature of QT Voice has not yet become a threat to it, the user has a greater advantage. Tencent has begun to use its game business to promote QT voice, from the data, Tencent's game Qt voice permeability is also far weaker than yy voice, the current YY voice industry position is relatively stable, but Tencent has not been the focus of QT voice business, if Tencent set mature flow products into QT voice, YY will pose a certain threat.