About this Blog

The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.

Tuesday, May 29, 2007

Sohu – TL – Reasons I think TL is popular

This is the 3nd part of 4 part series. The 2nd part is here:

Reason 1: iResearch said so
See the link: http://www.iresearch.com.cn/html/online_game/detail_views_id_44137.html
It is the cumulative number of downloads between 5/14 and 5/20 as compiled by Xunlei. There are 571k downloads of TL. TL is ranked 3rd behind two casual games. Thus, it is number 1 in MMORPG games. Netease’s XYQ is number 4, Zhengtu is number 5, WOW is number 6 and NCTY’s SUN is number 8.

Reason 2: Xunlei’s download ranking said so
See the following for Xunlei game download ranking for the previous day:
TL is number 1 with 36688. SUN is number 4 with 9292. XYQ is number 7 with 6240.

Reason 3: Xunlei’s search ranking said so
See the following for Xunlei game search ranking:
TL is number 3 behind two casual games.XYQ is number 4, Zhengtu is number 6, WOW is number 7, and SUN is number 14.

Reason 4: Baidu Game ranking said so
See the following for Baidu’s top 50 game search ranking:
TL is number 2 and is sandwiched between the two casual games. WOW is number 4 and SUN is number 5.

Note that Xunlei is a download accelerator and a P2P program. Sohu’s biggest focus now is P2P video (with download accelerator function provided for free). Thus, they are direct competitors.

In addition, Xunlei is allied with Google. Google is Sohu’s direct competitor because Sogou is Sohu’s property. For the same reason, Baidu is direct competitor to Sohu also. There is no reason that Xunlei and Baidu will do TL’s bidding by hyping TL’s popularity.

In addition, this is not something you can fake. We are talking about half of millions of downloads or searches. If all these downloads or searches are coming from a few thousands IP addresses from a few cities, alarm bells in Xuelei and Baidu would ring of possible fraud. I am sure Xuelei and Baidu would lick their chops in sticking it to Sohu without mercy if that is the case.

Reason 5: It (faking server numbers) could kill the game
To me, this is the biggest reason why I think TL is popular. There are 159 servers. TL can’t fake it. If there are phantom servers, players would know since they can’t get into these servers, nor can they register with these servers. Assuming Sohu is faking it, Sohu could annouce that these servers are in maintenance or full. But how can they be full or in maintenance all the time. Players will get awfully suspicious if any server becomes full on 4am every day.

Similarly, if there are very few players in the servers, players will notice also. A server can handle 5200 players. If there are only 500 players during peak time, players will notice and complain because it would be no fun to play in a sparsely populated game. It would be awfully easy to spot in various game forums.

But there is a possibility that the sever only have one or two thousand players during peak time. Players might not complain and TL gives people the impression that they are 2 or 3 time more popular than they really are.

But I don’t think it is the case. By doing that, they could kill the game completely.

The reason they potentially want to inflate the server number is to create hype to attract players. But if they start to adds new servers when the old servers (in the same geographic location) only has 1000 or 2000 players, they will start to create ghost servers.

Ghost servers are naturally created event for MMORPG. Netease’s XYQ, XY2, and DaTang consolidate servers to get rid of these ghost servers. Zhengtu consolidates ghost servers almost every two weeks.

There is a threshold on the server that when the number of player goes below that, that server starts to lose players quickly. As more players leave, it becomes less fun for existing players. It then becomes a vicious cycle.

This is not something game companies would do. They would do anything to get rid of ghost servers. They definitely won’t do anything to help create many ghost servers.

Tomorrow I will conclude this series by providing my calculation for TL’s PCU.

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