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, September 24, 2013

Netease starts internal Beta for Blizzard's HearthStone

My last NTES related post can be found here:
Last NTES related post

That was part 8 of China's Mobile Messaging war. Netease's YiChat is still doing very well. Netease is concentrating on adding feature to its YiChat product right now. I suspect there will be major YiChat update soon.

But this article is not about YiChat.

Netease got the licensing right to operate Blizzard's (ATVI) Hearthstone. Hearthstone is not a MMORPG game. It is a new card game that is played on the internet on PC or through mobile phone.

I didn't think very much of this game at the beginning. But I start to think I could be wrong.

This game is all the rage in USA right now. Twitch is a pretty good place to find the games that are popular in the USA:

The following is a screenshot taken on 9/22/2013 at about 8 pm Central time:

Note that is the fourth most popular games (in terms of number of viewers). It is about the same level as DOTA2 (licensed by PWRD). It is twice as popular as Blizzard's mega hits World of Warcraft and four times as popular as Starcraft 2. It is about 7 times more popular than another mega hits World of Tanks (licensed by KONG).

While I don't think DOTA2 will be extreme popular in China because it is much more complicated to play than League of Legend (definitely the most popular and most likely the most profitable game in China right now).

But this game fits all the criterions:
1. It is made by Blizzard. Blizzard had a mythical reputation in China.
2. It is designed to be free to play. Thus, it is pirate-proof. Starcraft 2 is very popular in China. But nobody in China pay for Starcraft 2 due to piracy. It won't be the case for Hearthstone.
3. It is designed to be free to play and it is not MMORPG. World of Warcraft is MMORPG and it is fee-based game, it is fading in China right now. Hearthstone is none of that.
4. It is easy to play. Tencent made 1.229 Billion dollars in 2Q2013 from online games (in comparison, NTES got 317 million dollars in 2Q2013). Virtually most of those money comes from three games: League of Legend, Cross Fire, and Dungeon and Fighter. All three games are not MMORPG and extremely easy to play. Hearthstone fit those profile.

5. It is a very social game. Just like all card game, it is a social game. You have to have a lot of social factor to be a hit game in China.

6. It is designed to play on mobile phone (in addition to PC) to start out with. Mobile gaming is the next frontier in China.

7. It is talk of the town in US gamer circles. As the above screenshot showed, gamers in US love this game. If this game is super popular in USA, Chinese gamers will play this game just try to be hip.

From the above reason, this game has a very good chance to be a truly major hit.

I see this game as either hit or miss in China. If it is a hit, it will be a hit so big it will be much bigger than anything Netease has. It will probably be the same type of game as Tencent's three true blockbusters.

But it also could be a complete miss. It is such a different game that Chinese just can't get use to it.

I give it 50/50 chance for either.

Anyway, this game is already in open beta in USA and Europe. Today, this game will also go into beta in China (open to Netease employees). See the following news:


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