Genshin Impact: What It Means for the Gaming Industry
I remember one day I was helping a client make final preparations for a game launch. They had mentioned that Genshin Impact was probably going to launch soon, so they wanted to get their game out before miHoYo’s title went online.
I felt a bit confused. What does some cutesy, open-world anime title have to do with our dark, Diablo-like ARPG? As it turned out, more than I thought. Players in our own Discord channel were talking about this game and debating if ours was just a hold-me-over until Genshin Impact, or if they were planning to put serious time and effort into the world we had built.
While I thought this was an apples to oranges comparison, apparently the players didn’t feel the same way. As it turns out, these gamers weren’t as particular about genres or themes as I was. And as it turns out, my client had a decent reason to worry about our game’s launch coinciding with Genshin Impact.
Everyone in the Chinese gaming scene knew the scale of the project was ambitious. They were also pretty confident this game was going to succeed, though most people didn’t predict the magnitude of what was to come.
So let’s talk about Genshin Impact.
What Genshin Actually Is (From a business perspective)
Genshin Impact is a free to play (f2p), cross-platform, live service RPG with a gacha monetization model. It launched simultaneously on PC, PlayStation 4, iOS, and Android. It costs players nothing to play, and it receives regular content updates on a fixed schedule. Interestingly, it makes almost all of its revenue through its character and weapon banner system where players spend premium currency for a random chance to draw new characters. We’ll expand on this a bit later, as this strategy marks a departure from what most Chinese developers have done in the past.
None of the elements I mentioned above are revolutionary. Free to play, gacha monetization mechanics, live service, and regular content updates have all existed in various forms in many other games before Genshin. As we’ll see, it was the execution of all these elements that made the difference.
Was Fortnite an Inspiration?
In terms of the core business model, it’s worth asking whether there were any obvious predecessors to Genshin Impact. Fortnite seems to be an obvious candidate for comparison. Epic’s battle royale launched in 2017 as it became one of the first games to demonstrate that a free to play, cross-platform live service game could achieve massive commercial success with a global audience. By the time Genshin Impact launched in 2020, Fortnite had already served as a proof of concept for several elements Genshin Impact would rely on:
- Cross-platform play across console, PC, and mobile was technically feasible and commercially viable
- Gamers would still spend a lot of money on cosmetic content without an obvious pay to win structure
- A free game coupled with a sensible content release cadence could sustain a player base for years
Whether miHoYo directly copied this business model is hard to say. However, it is easier to say that Genshin Impact holds more in common with Fortnite than it does with a JRPG or most other Chinese mobile games. Another important similarity of this cross-platform feature is cross progression. Some games offer cross platform compatibility, but players are often limited to the device they first played on. Fortnite tied everything to an Epic Games account, which at the time was quite an accomplishment considering that platforms traditionally resisted this kind of feature in favor of “lock in” dynamics. Following Fortnite’s lead, Genshin Impact also allows players to start playing on their iPhone and continue playing on a completely different device later on.
Zelda Comparisons
A lot of the early Genshin coverage focused on how much it resembled Breath of the Wild. From an art standpoint, I think these two games look very similar. Nintendo fans and other gamers obviously mocked this resemblance, and it’s hard to ignore.
In terms of business models, however, these two games couldn’t be more different. Breath of the Wild is a premium experience bought with a single purchase. It is also, obviously, a Nintendo exclusive. Genshin Impact is a f2p live service game available on many platforms.
Nevertheless, the controversy centering around Genshin Impact’s “aesthetic inspirations” probably helped more than it hurt. Mentions here, mentions there. More SEO. More name drops. Free word of mouth marketing. In many cases, negative coverage is better than minimal or no coverage at all. I talked about this in my last post covering the Cyberpunk 2077 launch.
What miHoYo Got Right (the execution)
1. Simultaneous Global Launch
This may seem like common sense, but this is actually not how a lot of Chinese developers and publishers operate. Most Chinese titles reach western markets months or years after their domestic launch, often to their own detriment. If players in the West do their research and know the game in China is already “dead”, they will tell others and warn them to temper their expectations and spending.
Beyond delayed launches in the West, Chinese developers often license out their game to separate publishers for Japan, Southeast Asia, and the “Traditional Chinese” markets of Taiwan, Hong Kong, and Macau. I’ve always thought that this strategy hurts a game’s reputation and long-term earning potential, but maybe these developers earn more money by chopping up the rights and selling them separately? Or maybe it’s just a matter of confidence—maybe they just don’t think they have the know-how or capabilities for a multi-region launch.
2. Production Value
Many Chinese developed games still have very basic gameplay mechanics at their core. For example, despite its quality and success, Onmyoji’s battles are still mostly turn-based, asynchronous affairs. Players can indeed fight in real time, but they’re fighting a computer player on the other end. This type of “simulated” battle is still extremely common in Chinese game development.
Genshin Impact, on the other hand, feels and plays much more like a premium title. You control your character in real time. You fight in real time. It’s a vastly different experience compared with tapping on a PvP menu, tapping on a rival player standing on a podium, and then partaking in an asynchronous battle.
This upgrade in core gameplay is a crucial part of Genshin Impact’s success. Real time exploration and combat made this game viable on console and PC, which greatly expanded the player base beyond mobile phones.
3. Live Service Cadence
Every six weeks, Genshin Impact releases a new update. This update almost always includes new stories, new events, and new characters available on time limited banners.
Most games don’t give players guaranteed new content every six weeks. That’s an intense pace, but it creates a reliable stream of content that keeps players playing and anticipating more. miHoYo essentially grabbed a page from the Chinese browser game operations model and then took it to the extreme.
What the Rest of the Industry is Wondering
With the apparent success of games like Fortnite and Genshin Impact, are free to play, live service oriented games the way to go? Can this business model work across platforms, including PC and console?
The answer appears to be yes.
It seems that the free entry point, combined with higher production value and consistent updates, can rival the revenue levels typically reserved for premium, AAA titles. Whether or not other Chinese publishers will attempt such ambitious global launches, however, remains to be seen.
miHoYo and Epic have nevertheless proven that this strategy can work, and now developers are wondering if they’re leaving more money on the table by charging players upfront to experience their games.
