Insights - "Black Myth: Wukong" has taken the global gaming market by storm, potentially breaking even on its first day of release.
This highly anticipated PC and console action RPG, developed by Game Science (a company founded by former senior Tencent employees, with Tencent holding a 5% stake and Hero Entertainment holding a 19% stake), is inspired by the classic novel "Journey to the West." The game was officially released on August 20.
On its release day, "Black Myth: Wukong" surpassed narrative-driven games like "Cyberpunk 2077" (developed by CD Projekt) and "Baldur's Gate 3" (developed by Tencent-invested Larian Studios), securing the top spot.
Goldman Sachs views this as a significant turning point for the Chinese PC and console gaming industry, marking the first time a Chinese developer has achieved such strong user acceptance and high Peak Concurrent Users (PCCU) rankings.The second place goes to NetEase's "Naraka: Bladepoint," which ranks 27th in historical PCCU rankings.
Here are Goldman's key insights:
Potential Government Support: The Chinese government may provide further support to the gaming industry, especially for high-quality content exports. Potential further government support for China's gaming industry, especially for high-quality content exports. The government is recognizing the industry's potential value in terms of exports and culture, as highlighted by a state media interview with Game Science's founder just before the game's release.
A Substantial Step for Chinese Games Going Global: Although over 80% of the reviews on Steam come from Chinese users, indicating a predominantly local player base, the success of "Wukong" as a AAA game based on a classic Chinese IP suggests that Chinese developers are improving their capabilities on PC and console platforms (particularly non-mobile).
Potential Boost to Investment in the Chinese Gaming Industry: The success of "Black Myth: Wukong" may stimulate investment in the Chinese gaming industry, particularly in the private equity market, as developing AAA games is a long and resource-intensive process. We expect more AAA game projects to enter the global market in the future.
Which U.S. stocks could benefit from "Black Myth: Wukong"?
It is important to note that for large-cap tech companies such as Microsoft, Sony,and NVIDIA, these positive developments are unlikely to cause significant stock price movements. Even for Valve, the operator of the Steam platform,the benefits may not be immediately apparent in the short term.
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