The board game giant Hometown Interactive has handed in a report card that shocked the market: annual revenue of 1.386 billion yuan, a year-on-year decrease of 22%, and a net loss attributable to the parent of 74.17 million yuan—this is its first annual loss since its listing in 2019.
Just a year ago, this company was still an invisible big player, with revenue growing for four consecutive years. In 2023, the revenue was 1.78 billion yuan, a year-on-year increase of 14%, and it was still able to rise against the trend even after cutting 37% of marketing expenses. But now, a user frenzy has become the last straw that breaks the camel's back.
Back then, making a fortune quietly with the room card model, and now losing money by spending heavily on buying traffic? This script is more magical than "Kakegurui".
▌User surge by 35%, yet revenue plummets by 22%
The most ironic data in the financial report is: the number of paying users increased by 35% year-on-year to 17.8 million, but ARPPU (average revenue per user) plummeted, ultimately leading to a decline in revenue.
The company spent 240 million yuan on buying traffic, signed top streamers like Feng Timo and AG Menglei, with over 1000 streamers, and even established its own MCN agency, Weiying Interactive.
By lowering the recharge threshold and implementing a subscription model, most new users are bonus hunters with insufficient payment depth, severely diluting ARPPU.
The cost of sales increased by 21.6% year-on-year, marketing expenses increased by 106 million yuan, and streamer commissions surged by 123 million yuan.
This is very much like the early web game tactic of "one cut for 999"—using traffic bombardment to attract massive users, but unable to escape the vicious cycle of increasingly expensive traffic and diminishing user retention.
▌The ten-year dilemma of board games
After the room card model was characterized as gambling in 2017, Hometown Interactive was forced to divest related businesses, greatly impacting its revenue structure.
In 2023, attempting to transition to hardcore games (such as the tower defense game "Meet Meowks"), but due to mediocre gameplay and lack of innovation, it ended up as cannon fodder.
Dependence on regional rule differentiation (such as 469 local Mahjong versions) formed a moat, which gradually became ineffective under the impact of new traffic platforms like TikTok and Video Number.
Competitors like Zen Tour and Tu Tour seized the market through live event streaming and social fission, forcing Hometown Interactive to join the streamer arms race.
▌The deep logic behind strategic mistakes
Facing the crisis, Hometown Interactive deployed three strategies, but each one backfired: the cost of attracting traffic through TikTok and Video Number live streaming soared, with top streamers taking a share of 50%-70%, ultimately consuming the profits.
Compared to the success of WeChat Mini Programs' natural traffic and low marketing costs in 2023, the strategy in 2024 is quite a setback.
Research and development expenses decreased by 32.8% year-on-year, cutting 131 R&D personnel, and all non-core projects were halted.
As a result, the heavy game "Homeland: Dream Party" was delayed for three years, and the Steam independent game "Theseus Protocol" had only a 67% positive rating, fully exposing the technical shortcomings.
In 2023, the trial of the fishing game "Fishing Game Zone" in the Vietnamese and Malaysian markets has not yet entered the top 100 best-selling list, and new projects like Japanese second-element Mahjong and Philippine Rummy are still in the testing stage, unable to quench the thirst from afar.
When a company starts cutting R&D and preserving marketing, it often means it has fallen into a vicious cycle of pleasing the capital market with short-term data.
▌The future of board games
The first loss of Hometown Interactive may signal the end of the golden age of board games, but it may also give rise to new opportunities, such as "Weile Fight the Landlord" testing live PK matches and water friend matches, deeply binding board games with social interaction, and creating online board game room scenarios.
Joining the International Mahjong League to hold professional leagues, promoting the competitive nature of board games (such as "Weile Sichuan Mahjong" becoming an official grading platform).
"Weile 3D Fight the Landlord" tries to upgrade the artistic expression, but compared to the UGC ecosystems of "Yuan Dream Star" and "Egg Party," it still appears conservative.
If board games continue on the old path of skin swapping and buying traffic, it might as well leave the servers to the square dancing aunties—at least their recharges are serious.
The loss of Hometown Interactive has torn the fig leaf of the board game industry. When user growth becomes the only KPI, when the cost of traffic devours profit margins, and when lack of innovation becomes a collective problem, how many players are still willing to pay for this game?
Perhaps, the real crisis is not the loss, but that the entire industry is still using 20th-century thinking to deal with 21st-century users.
