As ByteDance throws in the towel on video games, Chinese studio miHoYo claims global wins with Honkai

MiHoYo, the Shanghai-based studio behind Genshin Impact, has come up with another global hit, Honkai: Star Rail, showing the potential of Chinese video games even as ByteDance, the owner of TikTok, retreats from the sector.

The title, a role-playing gacha game launched in April 2023, has claimed major year-end awards, including Apple Store's iPhone Game of the Year, Google Play's Best Game of 2023, as well as the Best Mobile Game from The Game Awards (TGA), considered the Oscars of the global gaming industry.

The accolades follow the international recognition received by Genshin Impact, the hit open-world adventure game launched by miHoYo three years ago, and reflects the global success of China-developed titles over the past few years despite a sluggish environment for the Chinese video game industry.

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Beijing-based ByteDance planned to lay off hundreds of staff at its main gaming studio Nuverse, the South China Morning Post reported in late November. The studio will also sell the rights to at least two of its titles - the anime-style role-playing game Crystal of Atlan and sci-fi survival game Earth: Revival - according to one source familiar with the situation. Both games were launched by Nuverse earlier this year.

As China's domestic market loses growth momentum amid weak consumer spending and strict licensing regulation, Chinese gaming studios have been forced to seek growth overseas, with the success of Genshin Impact a typical example.

Genshin Impact became the first Chinese title to win the TGA's mobile game award in 2021, and followed wins from the Apple and Google app stores in 2020.

"Honkai: Star Rail is standing on the shoulders of Genshin Impact," said Zhang Shule, an analyst with CBJ Think Tank. "It's also due to the global craze caused by Genshin Impact ... that has given enough attention and [raised] expectations for Honkai: Star Rail," said Zhang.

Genshin Impact, launched in September 2020, brought in US$4 billion in global mobile revenues up to the end of 2022, making it one of the most successful mobile titles of all time, according to Sensor Tower. Honkai: Star Rail is showing similar potential, generating US$1 billion on mobile and PC platforms in the first four months since its global launch, according to data from gaming research firm Naavik.

China's video gaming giants also took the opportunity to promote upcoming titles and signal their overseas commitment at the annual TGA event in Los Angeles in early December.

miHoYo is the Chinese gaming developer behind global viral title Genshin Impact. Photo: Handout alt=miHoYo is the Chinese gaming developer behind global viral title Genshin Impact. Photo: Handout>

At the ceremony, miHoYo released a trailer for its action role-playing game Zenless Zone Zero, its next title following Honkai: Star Rail. The game, set in an urban adventure world, will be launched globally in 2024.

Tencent Holdings, the world's biggest video gaming business by revenue, unveiled an ambitious big-budget console game called Last Sentinel, developed by its Lightspeed Studios, which was also the developer of the company's top-selling PUBG Mobile. No launch date was announced.

The global recognition and success have come as China's video gaming industry remains under pressure from economic headwinds and regulatory scrutiny.

In the first half of 2023, total revenue from China's video game industry fell 2.4 per cent from a year earlier, while the total number of gamers was largely flat at 668 million, according to a report released in July by China's Game Publishing Committee.

Meanwhile, the success of Honkai: Star Rail was welcomed by its Chinese fans.

"I feel so proud of the achievements. It speaks for itself that Chinese games are more than just Genshin Impact," said Li Ye, a 23-year-old player from Shanghai, who started playing miHoYo's new title as soon as it was launched.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.