Overlord will not “machine” at last, Xiaobawang has filed for bankruptcy, why is it difficult for domestic game consoles to stand up?

"Little Overlord has endless joy."

This slogan is like "No gifts for this year's holidays, but only melatonin". It is engraved in many young memories of the 80s and 90s.

Time has changed, and today's "Little Overlord Has Endless Happiness" is already a slogan in online games, used to laugh at others or ridicule others' slow running computers. And the protagonist in the original context of this sentence, the Xiaobawang game console, has gradually turned into a grain of sand of the times.

▲ Picture from: Chinese entrepreneur

After ups and downs and struggles for more than ten years, Xiaobawang was finally exhausted and declared "Game Over". According to the "Beijing News" report, an enterprise search revealed that Xiaobawang Cultural Development Co., Ltd. was filed for bankruptcy and reorganization. At the same time, the legal representative Feng Baolun has been listed by the court as a high-spending person, and the consumption restriction order was issued by the Zhongshan First People's Court.

This year, after the "golden master" behind Xiaobawang left, the Xiaobawang culture was successively listed by the court as a person to be enforced. In fact, since 2019, Xiaobawang Culture has been involved in as many as 98 judicial cases, including many disputes over equity investment funds.

Destiny is like a roller coaster

Just like "Coconut Juice", you think of Hainan; when you think of Moutai, you think of Guizhou. Xiaobawang was also a representative enterprise in Zhongshan City, Guangdong Province. In the 1990s, it was regarded as the pearl of Zhongshan City.

In 1989, Duan Yongping, holding a master's degree in Econometrics from Renmin University of China, joined the tide of going south with great ambitions. At that time, the postgraduate degree was a "golden cake." Duan Yongping had just arrived in Zhongshan, so he entered the Nihwa Electronics Factory as the factory director.

▲ Duan Yongping. Picture from: scmp

But this is not an easy job. At that time, the Nihua Electronics Factory was on the verge of bankruptcy, with a loss of 2 million yuan. After market research, Duan Yongping learned that the total market sales of small home game consoles in mainland China are far from reaching market saturation.

So he made a decisive move to fully transform the production of home electronic game consoles, and gave the product a resounding name-"Xiao Bawang". Duan Yongping lived up to expectations. The market sales in the near future proved that his decision was successful and the Nikka Electronics Factory was revitalized.

▲ Picture from: Duiling

But for children, wanting parents to buy a game console so that they can experience the joy of playing games only exists in the story of "other people's home." In order to weaken the attributes of "games," Duan Yongping and his team added a computer keyboard and computer learning card to the game console, turning it into a "learning machine."

In 1993, Xiaobawang launched the first-generation "computer learning machine", and hit the CCTV "You take one, I take one, Xiaobawang has a learning machine; you take two, I take two, learning games together… …" A resounding advertisement.

In 1994, Xiaobawang hired Jackie Chan as the protagonist of the advertisement. The advertisement of "Being the same as the parents of the world, hope that the child will become the Xiaobawang", let it further relieve the parents' psychology and open the market. Among the numerous game console manufacturers in the country at that time, Xiaobawang had a great success.

Duan Yongping is a very business-minded person. Under his leadership, Xiaobawang's output value reached 800 million yuan in 1995, and its market share was approaching 80%. The Xiaobawang Chinese and English computer learning machine was even recommended by the National Youth Work Committee of the Communist Youth League Central Committee as the only designated training machine for the "National Children's Computer Knowledge and Wubi Font Input Competition".

But in 1995, when Xiaobawang was in such a bright spot, Duan Yongping suddenly proposed to resign. This is also a crucial year for Xiaobawang from prosperity to decline.

As for the reason for the resignation, outsiders speculate that it is because of dissatisfaction with the business strategy of the "funding master" Yihua Group behind Xiaobawang, and issues such as property rights disputes. Duan Yongping is eager to be a real entrepreneur, hoping to make Xiaobawang the Panasonic of China, but under the constraints of Yihua Group, this dream seems difficult to realize.

▲ Picture from: Maoming.com

After leaving Zhongshan, Duan Yongping founded a new company, BBK, in Dongguan, a city across the river in September 1995.

With Duan Yongping's departure, a large number of middle-level managers, technical backbones, and employees have also left Xiaobawang. In 1997, 24 dealers collectively defected to BBK. These incidents were almost a "fatal blow" to Xiaobawang, so Xiaobawang quickly declined, just like Grand View Garden of Grandma Liu.

From near bankruptcy, to surging in the sky, to struggling, the fate of Xiaobawang is like a roller coaster. However, this railroad track seems to extend endlessly downward.

▲Picture from: Xiaobawang official website

Little Overlord "No longer domineering"

The little overlord who had no "main heart" began a long road to self-help.

After Duan Yongping, the successor failed to rescue several times. Although relying on learning machines, it can barely make ends meet, but the profit margin is only one-tenth of the peak period. With the popularity of personal computers, it is only a matter of time before Xiaobawang breaks the sand.

Beginning in the second half of 2004, Xiaobawang began structural reform and diversified transformation. Chen Jianren, the "golden master" behind Xiaobawang, successively established ten major subsidiaries including Zhongshan Xiaobawang Educational Electronics Co., Ltd. and Zhongshan Xiaobawang Bathroom Appliance Co., Ltd.

Each subsidiary operates a different business. For example, Education Electronics Company mainly deals in learning machines and game consoles; Innovation Company mainly deals in repeaters and electronic dictionaries; Digital Company mainly deals in MP3, MP4 and so on. It can be said that Xiaobawang is no longer the "simple" Xiaobawang before, but the "Sea King" who casts a net in many fields.

▲ Product display on Xiaobawang official website

But this kind of "blooming and leafy" is only an illusion. Xiaobawang Group holds 70% of its subsidiaries, and the rest is controlled by foreign investors. However, the control of Xiaobawang Group only relies on intellectual property rights. Each year, its subsidiaries only need to pay a certain fee, and they do their own business in specific business.

Later, the Xiaobawang Group simply "let go" and withdrew its shares in the subsidiary. Some subsidiaries can use the Xiaobawang brand as long as they submit fees similar to the "joint fee".

This means that Xiaobawang has become a "chartering company" of a rental brand. As a result, we saw that Xiaobawang's products are gradually full of the taste of cottage.

▲ The new Xiaobawang learning machine. Picture from: Xiaobawang official website

Against this background, Xiaobawang also had a "mobile phone storm" in 2011. At that time, under the influence of Xiaomi, brands such as Xiaojiao and Da Cola sprung up like mushrooms. Liu Yibing leased the trademark rights of Xiaobawang in the mobile phone and tablet business by paying rent.

Then, under the concept of nostalgia, I wanted to "make a fortune" among the post-80s group. Because Xiaobawang was unable to produce his own brand of mobile phones and did not obtain the permission of the Ministry of Industry and Information Technology to access the network, Liu Yibing "brained" and used Prada brand F11 model mobile phones as a substitute at the new product launch.

The retail price of a Prada F11 is 899 yuan. After Liu Yibing included the iconic fist image sticker of Xiaobawang in the box, the price instantly became 999 yuan, which is not a "commercial ghost".

▲Pleda F11. Picture from: Baidu Baike

And this "mobile phone turmoil" has further deepened the market's negative impression of Xiaobawang. However, the good news is that Yihua Holdings, the “golden master” company behind Xiaobawang, has relatively good income, especially in 2016, which reached its peak after listing.

After he became rich, Xiaobawang's "heart of the game" expanded again. In 2016, Xiaobawang proposed the “new overlord of the VR industry with over 50 billion yuan” and even proposed a listing plan.

The Beijing News quoted a middle-level and senior executive in the Xiaobawang game console business as saying, "About 2017, we cooperated with companies such as KONAMI to prepare game consoles and game content platforms. These are very expensive. At that time, we pulled a venture capital and prepared to use this project to operate and go public, so that we can raise funds to build a real domestic game console. Later, the venture capital withdrew, and the capital chain could not keep up, so we burned one billion. many".

▲A collection of KONAMI game characters. Picture from: Bilibili@赫克托尔之 heel

If the two cooperate smoothly, Xiaobawang may hope to see sunshine again. Unfortunately, the funds have not kept up. This can be regarded as Xiaobawang's last big move for help. Since then, as the "golden master" company is increasingly losing money, Xiaobawang's "recovery dream" has become a fantasy.

Until recently it was filed for bankruptcy, Xiaobawang finally couldn't stand it. This may mean that the little overlord and our youth will never come back.

▲ Pictures of the classic models of Xiaobawang from: Suning Tesco

Is "domestic game console" a false proposition?

Since the birth of Xiaobawang, it has always wanted to make the game business its core industry until it tried to save itself again and again. Especially the actions on the game console in 2016 and 2017 can also see its desire and ambition, that is, to change from the home game console to the game console.

However, after "burning more than a billion", Xiaobawang's game console dream has not yet been realized. Few people know that Xiaobawang has also produced a Z+ "game computer."

This is not surprising. After all, the game industry is an extremely profitable and money-burning industry. When Microsoft was developing Xbox, it "burned" billions of dollars before squeezing into the top three camps.

▲ The first generation Xbox

But the reason for the backwardness of domestic game consoles is not just a lack of funds. After the three major consoles (Xbox, PlayStation, Wii) have maintained their dominance for many years, no challenger like Sega has been able to join the team battle.

If you want to analyze the mystery of the backwardness of domestic game consoles, then it may be a long story. But in simple terms, it can be summarized as two points: one is that the best time is missed; the other is that the entry threshold is too high.

"Mendel" once compiled the development history of game consoles on Zhihu. In summary, Nintendo created the business model of contemporary consoles in the 1980s. In the process of several adjustments, by subsidizing consumers to sell the host at a loss, and using software to make profits again, the host hardware was quickly popularized to every household.

▲ Nintendo "Red and White Machine"

After the rapid popularization of hardware, software is used on this basis to monopolize the market, thus forming an exclusive barrier. However, this business model has gone through several cycles, and the profitability of software has already covered the cost of subsidizing hardware, thus forming a virtuous circle.

In the 1990s, the most competitive period was the best time to enter the game console. The first game console appeared in China, which is the 16-bit game console A'can launched by UMC in 1995.

But unfortunately, due to too few games and entering the age of 32-bit consoles soon after its launch, it failed to become the pride of the Chinese game industry. This also shows that the game console industry is iterating too fast.

▲ Lianhua Electronics A'can. Picture from: Nesbbs

In the 21st century, with the promulgation of the "game console ban", the National Bank game consoles have almost gone through "14 years of being stolen." In this time period, the situation of the three main hosts has been indestructible.

After the ban was lifted, local companies began to move around. In 2016, "Axe" first launched the "Tomahawk F1", known as "China's first home Internet entertainment game console." But it didn't take long for the players to complain wildly: the configuration is not strong and the games are too few. The product it presents is quite like a set-top box with excess performance.

▲Tomahawk F1

In the same year, Xiaobawang, who intended to "build a machine with a lot of money," also failed to arouse a splash in the game console market.

This involves the second problem: the entry threshold is too high. This threshold includes research and development, operations, channels, and so on. In the R&D stage of the home host, multiple aspects such as architecture, development environment, and future development prediction need to be considered. Without technical accumulation and strong financial support, it is impossible to pass this link.

Operations are more difficult than R&D. The starting lineup, follow-up support, etc., not only need funds, but also need contacts and talent accumulation. The strong ecology formed by the comprehensive capabilities of software and hardware is the foundation for the three major consoles to stand up. In this regard, domestic game consoles are hard to beat.

Like A'can and Tomahawk F1, the main reason for the fall is that the comprehensive capabilities of software and hardware are not up to standard. Although A'can's hardware capabilities had surpassed Nintendo and Sega at the time. But without the support of high-quality games, it is difficult to reflect on the market.

▲ The Mario series has become a household name. Picture from: gamespot

For the three major game console manufacturers, the current game ecosystem is already very mature. Sony's "God of War", Nintendo's "Mario", Microsoft's "Halo", each series is the result of their many years of accumulation. For Chinese game console makers, without the soil to nurture stand-alone games, they cannot bear fruit.

When it comes to Xiaobawang, his past glory is largely based on "cottages." Through the transfer and imitation of Nintendo and other multi-brand games, to capture players who are inexperienced. The lack of self-developed high-quality games makes it difficult to stand up in the long run.

This is like when the movie market is not booming, it is difficult to produce high-quality camera manufacturers. If one day we can really see the emergence of excellent domestic game consoles, then the premise must be that domestic games have developed sufficiently mature.

The picture comes from: Petal Net

Reference materials:

[1] Li Jie. Don't "machine" from the bully [J]. Chinese Entrepreneurs, 2019(09): 72-75+7.
[2] Xiao Hong, Li Xiuhua. The little overlord who is drifting away-successful companies have no characteristics, but failed companies have characteristics[J]. Chinese Market, 2010(48): 133-134+147.
[4] Liu Zhouwei. Duan Yongping will not be a "little bully" [J]. Chinese Entrepreneurs, 1998(04): 3-5.

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