A Race Against Time in the SLG Sector: Cash Cows Turn to Scrap, Newcomers Emerge Out of Nowhere

Hey everyone, today let’s talk about a major development that’s been making waves in the gaming industry. Can you guess what it is? It turns out that the Three Kingdoms SLG game—widely regarded as a goldmine—is currently up for sale. What happened to the “surefire profit” we were promised? What’s really going on behind the scenes? Let’s first break down the underlying logic behind this. These SLG games—you know, the strategy games where you deploy troops on a map and command vast armies—are among the mobile games with the highest spending and strongest user retention. It’s the core business segment for China’s top game studios—that’s real money we’re talking about. Does selling it mean these giants are throwing in the towel? No, this is a perfectly normal capital operation. Selling off non-core assets to focus resources on the main business—there’s nothing unusual about that. But when we examine this signal in the context of the entire SLG sector, the situation looks quite different. The growth model of traditional SLGs is losing its long-term appeal to investors. It’s not that there’s no demand in the SLG sector; rather, the old gameplay model has reached its limits. So what exactly are these old playbooks? They rely on a single hit game, followed by user acquisition to bring in new players and iterating on game mechanics to drive monetization. This model worked great during the traffic boom, but it no longer holds up. The traffic boom peaked long ago, and user acquisition costs have skyrocketed—anyone involved in game publishing knows this all too well. What’s even more troubling is the severe homogenization of gameplay: maps, structures, alliance battles, and numerical dominance. Dozens of products on the market look virtually identical, and it’s difficult for new titles to break out of this mold. The direct consequence of this is extremely poor long-term growth certainty. The capital markets fear this the most; without a clear growth trajectory for the next 3–5 years, valuations naturally cannot rise. The problem with the numerical system runs even deeper: revenue is driven by constantly releasing new cards. When new cards are introduced, old ones depreciate in value, forcing players to keep spending to maintain their combat power. This model essentially drains players’ trust. The value players get for their money is constantly eroded by round after round of numerical inflation; eventually, user retention becomes increasingly difficult, and product lifecycles grow shorter. After more than a decade, the industry has now entered a phase of diminishing returns. Looking even deeper, most traditional SLGs lack irreplaceable core competitive barriers. As soon as a new product enters the market using the same template and spends more aggressively on user acquisition, your users will defect. With shallow moats, long-term resilience to risks is weak. These three major issues are not isolated; they are intertwined. The more expensive user acquisition becomes, the more the game relies on numerical incentives. The race to the bottom in numerical stimulation accelerates user churn, which in turn forces the game to continue buying traffic—creating a vicious cycle that becomes increasingly difficult to sustain. Against this backdrop, news of the outright sale of a top-tier asset valued at nearly 10 billion is actually not hard to understand. This represents a very rational capital response to the industry cycle and indirectly confirms that the underlying logic of the sector has indeed reached a point where it must evolve. Does this mean the SLG sector as a whole has lost its value? Not at all. Capital never collectively withdraws simply because a sector is undergoing a correction; it merely reevaluates and retains what it deems to be of greater value. Just as the industry as a whole enters a phase of consolidation, a Three Kingdoms-themed SLG game has, in fact, secured dual strategic investments from Tencent and Hero Entertainment. Hero Entertainment CEO Wu Dan personally took on the role of director. Having previously backed projects like *Black Myth: Wukong* and *Mingchao*, he is widely recognized in China’s gaming industry as a hunter of high-quality projects. The projects he backs generally share a common trait: they are meticulously crafted, of high quality, and designed for the long term. Let’s take a closer look at this game, *Romance of the Three Kingdoms: The Way of the King*. First, consider the IP barrier. What level of resource does Koei Tecmo’s official *Romance of the Three Kingdoms* IP represent in the Three Kingdoms SLG sector? This IP has been in operation for over 40 years, and the brand recognition it enjoys among core users isn’t something that can be bought through user acquisition campaigns. More crucially, Koei Tecmo maintains extremely high standards for IP licensing, including character designs, world-building, gameplay mechanics, and comprehensive review and oversight throughout the development process—it’s not just a matter of attaching a name to the project. What does this mean? It means users already have a mental foundation before they even join the game, resulting in naturally higher retention rates and a longer lifecycle compared to homogeneous products. This serves as the core foundation supporting long-term operations spanning over five years—and it’s precisely the kind of long-term value assurance that investors value most. Once established, it’s extremely difficult for competitors to replicate. Now let’s look at the gameplay barriers. In traditional SLG games, victory boils down to a single logic: whoever has the strongest cards wins. Therefore, players aren’t buying an experience—they’re buying raw stats. After playing this system for a while, players become fully aware of what they’re doing—they’re essentially paying for meta-based power. When the next update rolls out, that investment loses its value. This product has chosen a different path. Victory on the battlefield depends on more than just stats; terrain, positioning, coordination between front and rear units, range, and movement all influence how a battle plays out. Players must decide how to exploit terrain, arrange their formations, and use battlefield space to gain an advantage. The deciding factor shifts from who has better card draws to who makes the most accurate judgments. More importantly, there isn’t a single strategy that works indefinitely. Each season brings changes to the map, campaign scenarios, and available generals—effectively forcing players to re-evaluate the battlefield and re-build their lineups every season. With constantly updated content, players’ strategic options never run dry, naturally extending the game’s lifecycle through gameplay depth rather than numerical inflation. From a capital perspective, this transforms the game from a one-time consumable into a sustainable operational asset—with a completely different pricing logic. Let’s take a look at the monetization model. What do SLG players hate most? It’s the rapid devaluation of their investments. A lineup you spent a fortune gacha-ing for today can become completely obsolete the moment new generals are released in the next update. Combined with the lock-in mechanisms of traditional gacha pools—where duplicates are constantly drawn and storage slots fill up—players’ monetization experience has accumulated a significant amount of negative sentiment over time. This product has adjusted its monetization structure by eliminating duplicate gacha pools and offering a player-friendly pricing model—a guaranteed reward after 20 pulls for 388 yuan. While this may seem like a sacrifice of short-term revenue potential, it essentially addresses players’ biggest pain point: preventing investments from depreciating too quickly and transforming spending into a means of sustaining a long-term experience, rather than chasing the pace of new updates. Short-term spending per user may not be the highest, but players won’t churn because their money went to waste. Retention is extended, and positive word-of-mouth generates secondary exposure. From a theoretical perspective, long-term LTV is actually more substantial. In summary, this *Three Kingdoms: The Way of the King* title has undergone a systematic overhaul across three key dimensions: IP, gameplay, and monetization. Of course, its ultimate market performance will require verification through actual data; whether the “premium quality” approach can ultimately succeed will become clearer in the future. Currently, the game is set to officially launch its “Dragon Signal” beta test on July 9 at 10:00 a.m. Those interested in the Three Kingdoms strategy genre or the evolution of business models in the gaming industry are encouraged to keep an eye on the upcoming data performance. Alright, that’s all for this episode. If you found this valuable, please give it a like. See you next time.