The Success of ‘Black Myth: Wukong’: What It Means for Chinese Gaming Stocks

The unprecedented success of “Black Myth: Wukong,” which sold over 10 million copies within three days of its release, has significantly impacted the Chinese gaming industry. This report examines the Chinese stocks benefiting from this success and compares “Black Myth: Wukong” to other popular action RPGs to understand its unique position in the gaming market.

Introduction

Impact on Chinese Stocks

Key Beneficiaries

The release of “Black Myth: Wukong” has led to significant stock price increases for several Chinese companies involved in its development and distribution:

1. Huayi Brothers Media Corporation: The company’s stock rose by 19.03% on August 20, 2024, and has accumulated a 72.09% increase since August 14, 2024. Huayi Brothers holds a 5.17% stake in Hero Games, an early investor in Game Science.
2. Zhejiang Publishing & Media Co: The stock reached its daily limit of 10%, with a price of 9.57 yuan per share. This company is the publisher of “Black Myth: Wukong.”
3. CITIC Press Corporation: The stock increased by 20.02%, reportedly related to an art illustration publication of the game.

Broader Market Implications

The success of “Black Myth: Wukong” has broader implications for the Chinese gaming industry:

• Increased Investment: The game’s success is likely to attract more investment into the AAA gaming sector in China, encouraging developers to focus on high-quality PC and console games.
• Tourism Boost: The game’s filming locations in Shanxi Province have seen a surge in tourism, highlighting the potential for video games to drive economic activity beyond the digital realm.
• Cultural Impact: The game’s promotion of traditional Chinese culture has resonated with both domestic and international audiences, potentially leading to increased cultural exports.

Comparative Analysis with Similar Games

Gameplay and Mechanics

“Black Myth: Wukong” is often compared to other action RPGs like “Elden Ring,” “Sekiro: Shadows Die Twice,” and “Devil May Cry.” Here are some key points of comparison:

1. Difficulty Levels:
   • Black Myth: Wukong: The game features challenging boss fights with a variety of skills and attack patterns, requiring players to learn and adapt. Regular enemies are easier to defeat unless encountered in large numbers.
   • Elden Ring: Known for its high difficulty, especially in boss fights. The game offers a more open-world experience with interconnected areas.
   • Sekiro: Shadows Die Twice: Focuses on parry-based combat and has a high difficulty level, particularly in boss encounters.
   • Devil May Cry: Emphasizes fast-paced combat and pattern recognition, with a focus on stylish action rather than sheer difficulty.
2. Map and Level Design:
   • Black Myth: Wukong: Features a segmented map with distinct chapters, offering a more linear experience compared to the interconnected world of “Sekiro.”
   • Sekiro: Offers a more interconnected world with narrow paths and rich exploration opportunities.
   • Elden Ring: Provides a vast open world with numerous interconnected areas and a high degree of exploration.
   • Devil May Cry: Linear level design with a focus on combat arenas and set pieces.
3. Combat Mechanics:
   • Black Myth: Wukong: Combines elements of action RPGs with a focus on dodging and timing, similar to “Devil May Cry” and “Bayonetta.”
   • Sekiro: Emphasizes parrying and precise timing in combat.
   • Elden Ring: Offers a mix of melee and magic combat with a focus on stamina management.
   • Devil May Cry: Fast-paced, combo-driven combat with a focus on style and fluidity.

Financial Projections and Market Trends

Revenue Projections

Industry experts project that “Black Myth: Wukong” could reach up to 20 million units in sales, potentially generating revenue exceeding 5 billion yuan (approximately $700 million). Goldman Sachs estimated that the game could achieve 12 million sales on Steam alone, contributing over 3 billion yuan (around $420 million) in revenue.

Long-term Viability

While the initial success of “Black Myth: Wukong” is promising, concerns remain about its long-term commercial viability due to limited monetization channels for console games. Despite generating substantial first-year revenues, the high costs involved in game production and a current economic slowdown could impact profitability.

Actionable Insights and Recommendations

For Investors

1. Diversify Investments: Investors should consider diversifying their portfolios to include stocks of companies involved in the development and distribution of successful AAA titles. Companies like Huayi Brothers, Zhejiang Publishing & Media Co, and CITIC Press Corporation have shown significant gains.
2. Monitor Market Trends: Keep an eye on market trends and government policies that support the gaming industry. The success of “Black Myth: Wukong” indicates a favorable environment for high-quality game development in China.

For Game Developers

1. Focus on Quality: The success of “Black Myth: Wukong” underscores the importance of high production values and quality. Developers should invest in extensive research and development to create compelling and culturally resonant games.
2. Leverage Cultural Elements: Incorporating traditional cultural elements can enhance a game’s appeal both domestically and internationally. “Black Myth: Wukong” has successfully promoted Chinese culture, setting a precedent for future titles.

For Policymakers

1. Support the Gaming Industry: Policymakers should continue to support the gaming industry through favorable regulations and funding opportunities. The success of “Black Myth: Wukong” highlights the potential for economic growth and cultural export.
2. Encourage Innovation: Encourage innovation and creativity in game development by providing grants and incentives for developers to explore new ideas and technologies.

Conclusion

The success of “Black Myth: Wukong” marks a significant milestone for the Chinese gaming industry, demonstrating the potential for high-quality, culturally resonant games to achieve global success. The game’s impact on related stocks, coupled with its favorable reception, highlights the growing influence of Chinese developers in the global market. By focusing on quality, leveraging cultural elements, and supporting the industry through favorable policies, stakeholders can capitalize on this momentum to drive further growth and innovation in the gaming sector.

Forward-Looking Statement

As the Chinese gaming industry continues to evolve, the success of “Black Myth: Wukong” serves as a beacon for future developments. By embracing high production values, cultural storytelling, and strategic investments, China is poised to become a dominant force in the global gaming market. The lessons learned from this success will undoubtedly shape the future of game development and investment strategies, paving the way for more groundbreaking titles in the years to come.