The Internet's cold winter continues, and the predicament did not immediately reverse because the Federal Reserve stopped raising interest rates.
From Silicon Valley to Seattle, a large number of Internet startups are unable to obtain investment. The market value of listed Internet companies has plummeted by more than 90%, and even delisted or closed down.
Only Internet companies with good performance and financial conditions can stop the downward trend.
In such a general environment, it is the only Internet company that can rise against the wind. With the market value of TFT rising by 40% in the two weeks after the release of the data, it is the only Internet company.
So much so that the Wall Street media exclaimed:
"The cold winter has not yet passed, Newman has led Riot Games to usher in a new spring."
Game developers will be concerned about the secret of the success of "Team Fighter Tactics" and whether there is anything they can learn from it. They hope to copy the success of "Team Fighter Tactics".
Especially Korean game developers who have realized the power of free online games.
For Wall Street, everyone is concerned about why it is Newman again. Newman's companies have achieved great commercial success.
While other Internet companies are struggling under the influence of the Internet winter, Riot Games has found a new profit model.
And it’s a model that clearly has great growth potential.
Riot Games has not returned to its previous highs, but it is much better than other Internet companies.
According to statistics reported by the New York Times last week, among the approximately 1,000 Internet companies on Nasdaq, Riot Games has the highest percentage of Internet companies compared to its highest historical market value.
"Why is it always Newman?"
The cover article of Barron's, part of Murdoch News Corp., features a large photo of Zhou Xin's face.
Barron's, a famous financial magazine founded in 1921, published a cover article called "Burn It Down" after the Nasdaq bubble began.
In the article "Burn Out", a large number of revelations were made about the poor current situation of Internet companies. Among the 207 Internet companies surveyed, 71% had negative profits, and 51 companies would run out of cash within 12 months. Even the famous e-commerce company Amazon's cash flow can only last 10 months. A large number of Internet company founders and early investors are cashing out as much as they can. The funds flowing from the old economic system to the new economic system will soon be exhausted, and Internet companies with no money to burn and no money to make will soon fall from the altar.
Barron's has been paying attention to Nasdaq's Internet companies since early on, and has long predicted that there is a bubble in the valuation of Nasdaq's Internet companies.
When your prediction comes true, you will want to let everyone know that my prediction has come true. Not to mention financial magazines whose survival depends to a certain extent on the quality of their articles.
Compared with magazines in other fields, financial magazines are more open to new news because they are less affected by Quora.
The audience of financial magazines is basically old money. These old money have limited adaptability to the Internet and have low acceptance of the magazine model like Quora. Therefore, financial magazines have not been greatly affected.
The old money's low adaptability to the Internet also makes them extremely curious about Newman.
Everyone has never dealt with Zhou Xin, but they only know about his business success and his ability to lead his companies out of the crisis after the Nasdaq bubble burst.
Readers of "Barron's" want to know what kind of magic Zhou Xin has, so "Barron's" follows the trend and publishes a cover article analyzing Zhou Xin's success rules.
"As we all know, Internet companies are facing an unprecedented crisis. The Nasdaq index has fallen by more than 50% from its high point, including a drop of 9% in one day on March 12. Internet companies and stock investors are facing the freedom of market value Tragic scene of falling body.
After the formation of a vicious cycle of market value decline - investors losing confidence - panic selling - market value decline, it is difficult to reverse the situation without external force. Not to mention the negative news that external forces have been the Federal Reserve raising interest rates, corporate financial reports not being as good as expected, and Internet companies' losses further increasing. More than 30% of Internet companies went bankrupt during this crisis, and the market value of most Internet companies fell by 60%.
Even Amazon and eBay, which are in good operating conditions, have fallen by 40%. At the same time, a large number of communication companies and hardware companies have been implicated. Cisco and Sun have even lost 80% of their market value. Time Warner, which acquired Quora for a whopping $74 billion last year, also lost 40% of its market value during this crisis. Netscape, the originator of the free software model, also lost most of its market share in its confrontation with Microsoft, and more than 300,000 IT practitioners were forced to change careers.
After news broke that the Federal Reserve would stop raising interest rates, the Nasdaq opened lower the next day after a symbolic rebound. Such a severe winter seems like there is no spring in sight. In such a harsh environment, Riot Games has become the only popular Internet company in the entire Nasdaq market with its beautiful financial reports, stable cash flow and new profit model.
The market value of Riot Games is approaching US$20 billion, which is less than 20% different from its historical highest market value. Compared with other Internet companies, this is already the most eye-catching report card. Therefore, in the process of intensive communication with practitioners in the financial industry under the current situation, a question that everyone is concerned about is: Why is it always Newman?
From Quora's sky-high valuation to Riot Games' reversal of predicament, from trivia communities to video game Internet service providers, why is it that Newman always achieves success that is incomparable to others?
There has never been an entrepreneur like Newman who has repeatedly verified his success in the Internet industry and delivered such outstanding results every time.
Even famous entrepreneurs like Steve Jobs had failures like NeXT, but Newman never failed to start a business. Even NewPay, which has not yet been listed, is hailed as the most anticipated unicorn company in the industry, and Goldman Sachs even gave it a valuation of US$100 billion. After the Internet winter arrives, whether NewPay can still enjoy a valuation of hundreds of billions of dollars remains to be tested by the market. "
NeXT is a computer company founded by Steve Jobs. Its first product sold only 400 units per month, which was seriously lower than expected.
The Sun mentioned above was a company founded in 1982 that focused on servers and workstations and was later acquired by Oracle.
"If matrix failed, then Newman also failed, but this is the hardware field, and Newman is undefeated in the Internet field."
Compared with Quora and Riot Games, Matrix's achievements are insignificant. With a valuation of US$499 and annual revenue of US$20 million, it costs an additional US$20 million per year. The cost here only refers to the operating expenses of the keyboard segment, and does not include mobile phone research and development expenses.
Because matrix's flagship stores are located in the core areas of major cities in the Americas and Europa regions, rent and decoration are expensive.
So much so that the outside world regards Matrix as Zhou Xin's fun work. The matrix keyboard is very good from a product point of view, but a huge failure from a commercial point of view.
“As a financial magazine, we hope to help readers gain insight into the essence behind things, just as we did when we analyzed the existence of the Nasdaq bubble, and explore why Newman has achieved success one after another and what magic he has.
Whether this magic can continue, as an investor, whether it is possible to invest in projects that Newman personally handles does not require any other factors to consider.
Let’s take the reversal of Riot Games’ dilemma as an example to conduct an in-depth analysis of Newman’s entrepreneurial logic. Back in the summer of 1998, when Newman typed the first code for Riot Games’ official website, he certainly didn’t expect Riot Games to become a company with a market value of tens of billions.
At that time, Riot Games was just an official website set up to bypass offline channels with high agency fees, and it only served the game "Angry Birds". The payment method is also different from the current one-click payment using NewPay. Players need to go to the nearest bank to transfer money. During the transfer process, they must reserve their mobile phone number. Then the mobile phone number will receive a verification code receipt, and players can then use the verification code to download the game. , thus completing electronic payment in the era when there was no electronic payment.
At that time, all game developers had to rely on offline game channels. Even though offline game channels required more than 30% of the share fee, less famous game developers even received 70% of the share fee. Only a handful of famous game developers could enjoy 30%. share ratio.
Are there no game developers who want to get rid of the shackles of offline game channels and sell directly online? Of course there is, but due to the lack of electronic payment, the labor cost of transferring money, confirming and then shipping is too high. Newman creatively introduces verification codes to realize electronic payments. It can be seen that Newman can think of product design methods that others cannot think of to meet actual needs.
Internet practitioners in Silicon Valley agree that Newman is a natural product manager. Innovation is as easy for him as drinking water, and he can easily find ways to solve problems. There were a lot of needs out there, and everyone knew people had such needs, but only Newman could find the solutions.
Therefore, we believe that Newman’s innovation ability determines that the companies he founded will always have first-mover advantages.
The second advantage of Newman, which we think is the most important advantage as an entrepreneur, is that the strategic planning is extremely clear. There are many entrepreneurs with innovative capabilities. It is not difficult to figure out what to do now, but it is difficult to figure out what to do in the future. This is not only a problem in the entrepreneurial process in the Internet field, but also widely exists in other industries.
NewPay is the second company founded by Newman, even earlier than quora. Riot Games' earliest payment prototype was borrowed from NewPay to a certain extent. NewPay is the most popular electronic payment software in the United States, with a market share of more than 70%. The only electronic payment software on the market is NewPay and others.
After winning the battle between Riot Games and Yahoo Games and selling part of his shares in Riot Games to Bill Gates, Newman founded NewPay. All his subsequent ventures revolved around electronic payments.
Riot Games' online video game sales business, Quora's paid Q&A, and Quora Gold Selection, all rely on electronic payment. These can all be called Internet paid services.
Newman first adopted an incentive bonus plan, that is, users can receive cash rewards when registering a NewPay account, and they can also receive cash rewards by inviting friends to register a NewPay account, thus gaining a large number of users.
After NewPay completed user accumulation, it began to launch Internet payment services. Internet payment services only had NewPay as an electronic payment option, which brought more users to NewPay.
Under the positive cycle, NewPay continues to expand, and Newman's companies become more and more easy to collect user payments. Newman's Internet service with electronic payment as its core has initially taken shape.
As for Riot Games' newly added online game - "Teamfight Tactics", we found through a questionnaire survey that the most common payment model among players is a monthly pass. A monthly pass is issued at a price of US$9.9 per month, and players can choose to subscribe.
NewPay will automatically deduct money every month after subscribing. If you choose to subscribe, you will get a 50% discount on the first month. Does it feel familiar? The same subscription system as Quora Gold Selection.
Newman would transfer the success of one model to other Internet services, taking money out of users' pockets in a way that would not offend them.
We call this model a value-added model. Simply put, Newman's Internet companies will provide users with high-quality free services, and on the basis of high-quality free services, they will provide you with higher-quality paid services.
Let users choose to purchase paid services involuntarily.
This is true for both Quora and Riot Games. "Teamfight Tactics" is a free game, and its quality amazes all game developers. However, it charges money by using decorations. Players pay for it willingly.
While the entrepreneurial philosophy of other Internet companies is Get Big Fast (don’t worry about anything in the early stage, just increase the number of users first, don’t care about profits and revenue), Newman only cares about how I can achieve profitability.
Including when attending an Internet conference in China, his advice to Internet practitioners in China was to find your way to make money as soon as possible.
Newman formulated a long-term strategic plan based on the principle of profitability, and then implemented the strategic plan step by step."
The reason why Riot Games' stock price has soared despite such a harsh environment is basically due to expectations.
With the expectation of free games, everyone believes that Riot Games will become the only channel for free games.
Like stand-alone games, competition in online game channels is fierce, and offline games should not be underestimated either. It is difficult for Riot Games to achieve a monopoly in this field. At most, monopoly can be achieved through online game channels.
Free games are different. Offline game channels cannot produce free games. Only online game channels can release free games. Riot Games’ user base determines that it will be the largest player in this field.
Free-to-play games have also proven to have strong profitability through the great success of "Team Tactics". Then Riot Games, which may be the only online game distribution channel, naturally has higher bargaining power.
You can also enjoy the almost monopolized free game market.
There is currently only one free game, TFT, which generated tens of millions of dollars in revenue in just ten days, and Riot Games was able to get more than three million dollars.
The future expectations can be imagined, and using a calculator is a basic skill for investors.
I returned to Chengdu today. Thank you to every book friend for your blessings!
Although getting married is troublesome and tiring, it is still very happy.
Thank you again for your blessings!
(End of chapter)
