In the middle of last year, Riot Games conducted a small-scale internal test in North America, achieving rather good results.
League of Legends appeared at a very opportune time.
WAR3 and StarCraft were gradually fading from the stage, and they were mainly focused on individual battles.
DOTA1 slowly lost its popularity due to its high learning curve and lack of updates.
League of Legends effectively filled the void in MOBA games.
The success of the internal test prompted Riot Games to launch League of Legends earlier.
After its launch in North America, League of Legends surprisingly had 100,000 concurrent online players on the American server within a week, causing queues to enter the game.
The impressive data greatly stimulated Riot Games.
Seeing how popular League of Legends was, Tian Hongrui couldn't hold back and had already started preparations for the Chinese server.
"Currently, there are only 23 available heroes, which is too few. You need to contact Riot Games to accelerate the development of new heroes. At least 40 heroes should be ready before the Chinese server officially enters open beta."
Chen Pingjiang frowned after starting the game, noting that Riot Games had taken some detours in the early stages of the game, and his task was to minimize these detours.
"Subsequent heroes must be continuously developed, only then will the competitive and playable aspects gradually improve."
"The game difficulty is still a bit high. There's no need to learn DotA's 'deny' mechanic; that's very unfriendly to new players. Stick to your own style."
"In addition to the battle mode, a 'free-for-all' mode could be added, with only one lane for players to brawl."
Tian Hongrui asked curiously,
"Chairman Chen, are you also so familiar with MOBA games?"
Chen Pingjiang paused, then casually found an excuse:
"I've played DotA before; isn't this game pretty similar to DotA?"
After thinking for a moment, Chen Pingjiang continued,
"With our powerful promotion and distribution system, League of Legends becoming popular in China is not a problem. However, the extent of its success will ultimately depend on how the esports system is implemented."
"You should establish a separate company to organize esports events, primarily professional leagues in various regions. This will open up a bigger stage for LOL, allowing excellent professional players to showcase their talents, enabling the game to embark on a commercialization path, and also providing a platform for the game's popularization and promotion. In time, successful professional leagues can attract more investors and sponsors, thus forming a positive cycle."
"After the domestic launch, which will be in about half a year, we'll select a team from each region and organize a global finals."
Tian Hongrui wondered,
"Current esports competitions are all affiliated with WCG. If we organize our own global finals, the prize money expenditure over the long term will be a considerable sum."
Chen Pingjiang shook his head:
"The first global finals will be invitation-based. Once the regional professional leagues are established, subsequent global finals will invite the top three teams from each region. At that time, we will extend the global finals schedule to one month, making it the World Cup of the gaming industry. The prize money is easy to solve: a fixed percentage drawn from annual skin sales combined with ticket revenue will be sufficient."
"That's no small sum. The champions of current esports competitions at most win $100,000, and the total prize money is only $200,000-$300,000. Chairman Chen, according to your calculation, our global finals prize pool could even reach $2-3 million, which is too exaggerated."
Chen Pingjiang smiled:
"It's like buying a horse's bones for a thousand gold pieces. Once commercialized professional events become popular, television stations or websites will purchase broadcasting rights, and advertising sponsors will also be attracted. We will never lose money."
Tian Hongrui had unconditional trust in the big boss.
In fact, the reason League of Legends became wildly popular and remained so is inseparable from its successful commercial operation.
Back then, Bilibili alone spent 800 million RMB to acquire the three-year broadcasting rights for the League of Legends global finals.
And this was just for the global finals!
What about the Mid-Season Invitational?
And the broadcasting rights for various regions?
What about ticket revenue?
These combined amounted to a terrifying figure, directly generating 1.75 billion in profit for Riot Games in 2020 alone.
It's not just the game itself and the events that make money; IP-derived mobile games, animations, music, virtual idols, comics, novels, and figurines can all generate revenue.
Therefore, whether League of Legends succeeds ultimately depends on how well the path of esports professionalization is trodden.
In Chen Pingjiang's view, Tencent and Riot Games indeed did a good job in this regard, actively promoting League of Legends' inclusion in the Asian Games, and the events were relatively mature.
When EDG won the championship that year, the topic garnered 3.39 billion reads and sparked 4.2 million discussions.
Stars from all walks of life posted congratulations, and young people across the nation stayed up all night.
No other esports game has truly been able to achieve such a feat.
"Understood. I will liaison with Riot Games and convey your instructions."
"Wait, don't tell them yet."
Chen Pingjiang stopped Tian Hongrui:
"I will have President Bu go to the United States to attempt an acquisition, and then execute the plan I just mentioned."
Entering at this point in time, acquiring shares in Riot Games is most appropriate.
The game had just been released, and although it achieved limited success in North America, it had not yet been validated by the global market.
Moreover, a year had passed since the last round of financing, and Riot Games had probably spent most of its money.
The optimal solution is naturally to acquire Riot Games and make it a wholly-owned subsidiary of Renren Network; at the very least, they should acquire over 60% of the equity.
Bu Housheng was very fast, bringing back good news in just one week.
Riot Games agreed to Chen Pingjiang's acquisition terms, and Renren Network invested $170 million to acquire 70% of its equity.
After this round of acquisition, Riot Games officially became a wholly-owned subsidiary of Renren Network.
The news spread back to China, causing widespread astonishment.
Many people said they didn't understand.
"Renren Network is truly rich, spending so much money to acquire such an unknown small company."
"They're just burning money; there's no way this company is worth so much."
"You can't really say that, can you? Riot's League of Legends is quite popular in North America, and it's said that the Chinese server is also being prepared."
"A mere MOBA game, could it possibly be a money pit like DNF?"
"What the hell do you people upstairs know? Our President Chen's vision has been validated by the industry multiple times. What do you keyboard warriors know?"
"..."
Chen Pingjiang ignored all this external clamor.
His vision would only be proven when the various League of Legends events became hugely popular a few years later.
Moreover, this acquisition practically cost nothing.
Renren Network was about to go public, and the Chinese server would be launching around the same time.
This merger was perfectly timed, and it would also raise external expectations for Renren Network, thus increasing its valuation.
......
Lin Bin and Zhou Guangping, these two old buddies, were no longer young, but that didn't hinder their work enthusiasm in the slightest.
In less than two months, the team was almost assembled.
Half of them were headhunted through various channels, another portion was newly recruited, and some were transferred from Renren Network.
The mobile phone development process is divided into seven steps: requirements analysis, design, prototype development, software development, hardware development, testing, and production.
According to Chen Pingjiang's requirements, and while focusing on reality, Orange Phone's first mobile phone would be priced in the mid-range, and it would enter the high-end market when conditions were ripe.
Even though the Meizu M8 was selling well at the moment, Chen Pingjiang's opponent was not it, but old man Jobs' iPhone.
Therefore, Orange Phone's product features, performance, and size would all align with the latter.
Lin Bin and Zhou Guangping originally thought Chen Pingjiang was an outsider, but they didn't expect him to be able to act as a qualified product manager.
He put forward many practical suggestions, not only in terms of appearance but also in software functions.
Many of his ideas even left Lin Bin and Zhou Guangping repeatedly amazed.
Chen Pingjiang did not want his Orange Phone to follow in HTC's footsteps as soon as it debuted, so he had no intention of releasing the first phone overseas, and thus did not care about patents.
Patents developed by their own company would at the earliest be reflected in the second or third generation of phones.
Chen Pingjiang's various actions further confirmed what he had told Lin Bin initially: he didn't want to make an assembled, rebranded phone, but truly intended to heavily invest in R&D.
In fact, not only now but even many phones years later were manufactured by OEM.
Most exaggeratedly, eventually, a certain car brand also diversified to make a phone, where the R&D and design were already done by others, and they simply put their brand on it and dared to sell it for 6000+.
The broad consumer base immediately recognized the 'insider' play; at least he had some conscience and could have just robbed them directly.
Didn't Old Luo once say?
He was not impressed by those manufacturers' so-called "black technologies."
"It's not about any single company being bad; it's that everyone here is a 'solution integrator,' all using components from suppliers. What kind of show are our competitors putting on?"
Except for a certain 'Wei', all are assembled products, merely leveraging supply chain innovations to claim credit.
Although the words were offensive, they were also true.
Most so-called "spec-competing" domestic mobile phones basically rely on hardware combinations to attract consumers, with very little innovation of their own, especially lacking core technologies.
Some mobile phone companies claim credit for changes that originally belonged to the supply chain.
For example, the later full-screen display was not an innovation by mobile phone manufacturers, yet almost all mobile phone manufacturers used it as a selling point.
Later, when under-display fingerprint sensors emerged, a small number of mobile phone manufacturers tried them, but this also depended on suppliers and had little to do with the mobile phone manufacturers themselves.
Apple improves photo effects through algorithms, while domestic phones improve photo effects through beauty filters.
Without core technology, merely doing assembly does not meet Chen Pingjiang's expectations, nor does it fit Orange Phone's positioning.
"The first generation of Orange Phone can use an integrated solution for now, but in the future, we need to independently develop our own mobile operating system, algorithms for various parts, and even chips."
Zhou Guangping nodded:
"For now, this is the only way. R&D is not something that can be achieved overnight; it requires a great deal of time and capital accumulation. For now, let's work for those foreign manufacturers."
As for display screens, BOE is still a long way off.
Currently, Samsung and Sharp might be the best choices.
For chips, we can only go to Qualcomm.
For memory, we'll look to Samsung and Hynix.
Just for cameras, a large number of suppliers are needed, involving camera modules, camera lenses, camera chips, and camera motors.
This situation will only change when domestic suppliers like BOE and OFILM grow, and it cannot be rushed.
After all, no matter how formidable a mobile phone manufacturer is, it's impossible for them to independently develop all those components.
In this era, if phones aren't sold at a high price, they truly won't make much money.
Profits are all taken by the various suppliers; at most, one earns a service fee.
The crucial point is that others make money from you, and then periodically choke you.
Huawei was restricted because it had core technology, while for Xiaomi, others couldn't even be bothered to restrict them.
The most significant bottleneck controller is Samsung, which both makes phones and acts as a supplier, being both player and referee.
It has bottlenecked Huawei, HTC, and Xiaomi.
HTC executives accused Samsung of using component supply as a competitive weapon.
Huawei's Mate 9 Pro was very popular upon launch, but it soon fell into a half-year-long out-of-stock situation.
This phone was basically unavailable on the market because Samsung cut off supplies, simply not providing OLED screens.
Because at that time, Samsung Display was the only manufacturer capable of mass-producing curved flexible OLED panels.
Other companies either had insufficient yield rates or simply lacked the capability, so Huawei could only choose Samsung, but the result was being bottlenecked.
This also explains why Huawei rarely used Samsung screens on its main models after the Mate 9 series, preferring slightly lower quality BOE or LG over Samsung, precisely to prevent being bottlenecked.
Even Xiaomi, which focuses on the mid-to-low end and has little competition with Samsung, suffered several "backstabs" from Samsung.
When Xiaomi's first high-end phone, the Xiaomi Note series, was released, they even hired Tony Leung as an endorser, but the screens were bottlenecked by Samsung.
Lei Jun personally went to Samsung to plead for screens.
Qualcomm, on the other hand, is even more remarkable; its ability to cultivate dependency is unparalleled.
Many domestic mobile phones even take pride in using Qualcomm chips.
Even if Qualcomm produces something utterly awful, they still have to grudgingly accept it, and then turn around and praise 'Daddy Qualcomm' for his excellent 'digestion.'
The two most famous chips are the Snapdragon 810 and Snapdragon 888.
In the eyes of consumers, the former is the notorious first-generation "fire dragon," and the latter is the universally criticized third-generation "fire dragon."
But so what?
Domestic manufacturers still have to use them, and ultimately, consumers end up paying for it all.
Chen Pingjiang said,
"If the performance gap isn't too large, we should try to support domestic suppliers and not always rely on Samsung and Qualcomm."
Zhou Guangping shook his head:
"For chips, there's only Qualcomm; no one else. Unless we develop our own? But that's not something that can be achieved just by throwing money at it, heh heh. Samsung, however, can be replaced, but the performance would drop significantly."
"Hmm, I know, that's why I said 'try'. It would be good if we could help the domestic supply chain accelerate."
Chen Pingjiang sighed helplessly:
"But our first-generation Orange Phone is still the priority. Don't forget our gambling agreement with the Dongjiang Municipal Government."
This gambling agreement was actually quite substantial.
The Dongjiang Municipal Government provided land for Orange Phone at one-tenth of the market price, along with a 1 billion yuan loan at the lowest interest rate.
At the same time, Orange Phone must pay no less than 500 million yuan in taxes annually starting from 2012.
Otherwise, it will be required to return the land or purchase it at its original price, and invest 5 billion yuan in the Dongjiang factory within the next five years.
(End of chapter)