Is it better for NetEase to focus on developing new games or enhancing existing popular titles?

Introduction

The trade-off between developing new games and enhancing existing popular titles is a critical decision for NetEase. This scenario involves balancing innovation with maintaining current revenue streams. I'll analyze this trade-off by examining product strategy, user impact, resource allocation, and long-term business implications.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about NetEase's current game portfolio. Could you provide an overview of our top-performing titles and their lifecycle stages?

Why it matters: Helps assess the potential of existing games vs. new opportunities Expected answer: Mix of mature and growing titles across various genres Impact: Influences resource allocation between new and existing games

• Business Context: Based on industry trends, I'm assuming mobile games are a significant revenue driver. What's our revenue split between mobile, PC, and console games?

Why it matters: Aligns strategy with primary revenue streams Expected answer: Mobile dominates, followed by PC, with console as a growing segment Impact: Might prioritize mobile game development or enhancement

• User Impact: Considering user retention, I'm curious about our player engagement metrics. What's the average daily active user (DAU) trend for our top 5 games over the past year?

Why it matters: Indicates whether existing games are maintaining player interest Expected answer: Varied trends, with some games showing decline and others growth Impact: Could influence decision to focus on revitalizing declining games or capitalizing on growing ones

• Technical: Given the rapid advancements in gaming technology, what's our current capability to develop games using cutting-edge tech like AR/VR or cloud gaming?

Why it matters: Assesses our ability to innovate with new game development Expected answer: Some capabilities, but not industry-leading Impact: Might suggest focusing on enhancing existing games while building new tech capabilities

• Resources: Thinking about our development capacity, what's our current ratio of teams working on new games vs. maintaining existing ones?

Why it matters: Indicates current resource allocation and potential for shift Expected answer: 60/40 split favoring existing games Impact: Helps determine feasibility of shifting focus without major restructuring