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Chapter 2631 Pointing Out the Country

With the huge success of both the domestic and international versions of QQ, Tencent transformed overnight from a makeshift operation crammed into the most sought-after company in the national internet industry.

Major financial media outlets started including "Tencent" and "QQ" in their headlines, and no one said anymore that Tianchao Group and Suning were fools with too much money.

Non-listed companies typically do not have mandatory requirements for reporting stock price expectations, but there are voluntary disclosure requirements and valuation needs in specific scenarios.

As a result, Tianchao Group's stock price forecast report also began to list Tencent as a separate growth engine.

Suning felt the time was right, so he decided to personally go to Shenzhen.

After all, there's a whole set of profit models to follow, and Tencent's greatest success lies in the gaming industry.

First, he had Zhuangzhuang book two plane tickets. He didn't bring a large group; it was just him and his assistant Zhuangzhuang.

In addition, Suning left Xiao Zhao in Beijing to handle daily affairs, saying, "Xiao Zhao, I'm going to Shenzhen to see Tencent. If anything happens, you can handle it for now. Call me if you can't handle it anymore."

"Understood, Mr. Su."

……

The plane landed in Shenzhen in the afternoon.

The sun in Shenzhen in May is already very strong. You can feel the heat wave outside the airport even through the glass. The air is humid and sultry, which is unique to the south.

Zhuangzhuang followed Su Ning out of the arrival hall. A gust of hot air hit her face, and she subconsciously covered her forehead with her hand.

Ma Huateng personally drove to pick him up in a black Qinglong sedan, the Qinglong relief logo on the front of the car reflecting a deep luster in the sunlight.

This car was specially provided to Tencent by the Tianchao Auto South China regional dealer, which can be considered a benefit given to senior executives within the group.

Ma Huateng got out of the driver's seat, wearing a short-sleeved shirt, and his smile seemed much more relaxed than before.

"President Su, you must be tired from your journey." Ma Huateng quickly came forward, shook hands with Su Ning, and nodded to Zhuang Zhuang.

Then, the three of them got into the car and headed straight for Tencent's headquarters in Shenzhen.

The car drove out of the airport and headed towards the city center along Shennan Avenue.

While driving, Ma Huateng reported the data of QQ since its launch to Suning: "President Su, the number of registered users of the international version has exceeded ten million, with particularly rapid growth in Southeast Asia. The people in the Hong Kong branch are so busy that they don't even have weekends to work."

"Yes, we still need to explore the overseas market further, and we also need to maintain our position in the domestic market. Tencent's success will definitely attract many competitors."

"That's right! I heard that Zeng Liqing's OICQ will be released early next year, and they have also received an investment from the Li family in Hong Kong."

"Will Mr. Ma be unable to bring himself to do something against his old friend?"

"No! Mr. Su, rest assured! I will absolutely not show mercy to Tencent's enemies."

"I hope you will keep your word."

"clear."

At this moment, Suning was looking at the Shenzhen street scene outside the window, and couldn't help but think of his experience in "Ten Years of Love".

In 1998, Shenzhen was celebrating the 20th anniversary of China's reform and opening up. The streets were full of construction sites and newly built office buildings. The whole city looked like a giant construction site, with construction and growth everywhere.

The car quickly arrived at Tencent's new office location.

It's called a new office location, but it's actually just a move from the old small rented room to an office building nearby. They've rented an entire floor, and the renovation still smells of freshly painted walls. There are a few workstations in the corridor that haven't been equipped with computers yet.

Suning walked in and took a look around. He saw computer screens densely packed on the workstations and developers moving back and forth. The air was filled with a unique office smell that was a mixture of instant noodles and caffeine.

Suning sat down in the conference room.

The conference room wasn't large, but it was decorated in a very grand style.

Ma Huateng and Zhang Zhidong sat opposite Suning, while Zhuang Zhuang sat next to them, flipping through her notebook to take notes.

"Mr. Ma, Mr. Zhang, QQ's user base has exceeded our most optimistic expectations." Su Ning got straight to the point, but didn't spend much time on the achievements, quickly getting to the point, "Domestic registered users have exceeded two million, and the international version is also growing steadily. But user growth is only the first step. I'm here today to talk to you about Tencent's next steps."

"..." Ma Huateng sat up straight, and Zhang Zhidong also put his hands down from the table.

"Once a social media app reaches a certain scale, the core issue becomes how to retain users and get them to spend more time on the platform. No matter how powerful the chat function is, users will close the window and leave once they've finished chatting. You need to give them a reason to stay on the platform. You can't retain people just by relying on the chat itself. What else can a user do on your platform after chatting with their friends? If they have no reason to open QQ again after closing it, then they're just a passerby."

Ma Huateng frowned and thought for a moment. "Mr. Su, we are considering some value-added services, such as cloud storage of chat history and personalized avatars—users can pay to customize their QQ avatars or save their chat history in the cloud so they can access it on different devices. However, we need to make some adjustments to the technical architecture, and the server storage costs also need to be recalculated."

“These are all small change,” Su Ning interrupted Ma Huateng with a wave of his hand. “Games are our main business. We leverage QQ’s massive user base to develop games; the user base and the gaming industry complement each other. QQ is a social relationship chain, and games are content consumption. If someone plays a game well, they’ll invite their friends to play together. Friends are already friends on QQ, so they can team up with just one click. This conversion rate is unmatched by any advertising. Imagine a user logging into QQ, and a window pops up in the lower right corner—‘Your friend is playing a new game, click to join.’ What are the chances of the user clicking that?”

"..." Ma Huateng and Zhang Zhidong exchanged a glance.

They had considered the gaming sector, but Tencent had focused its main efforts on the development and operation of QQ, and the gaming division had barely been launched.

Moreover, in the domestic game market in 1998, piracy was rampant, the profit margin for genuine games was extremely limited, and CDs were copied everywhere. It was not an industry that one could easily enter.

“Mr. Su, you’re aware of the current state of the gaming industry in China.” Zhang Zhidong was a straightforward man, and he spoke his mind without beating around the bush. “The piracy rate is too high, and single-player games aren’t selling. A legitimate copy is released, and the very next day a pirated copy appears, priced at only one-fifth of the original. Who would buy the legitimate copy? If we’re making online games, the internet speed in China isn’t up to par. Most users are still using dial-up, which is slow and unstable. Server costs are also a huge expense; once the number of online players increases, server bandwidth costs can eat up a large portion of the profits.”

"Online games are the future." Su Ning's tone was unwavering. He glanced at Zhang Zhidong, then turned his gaze to Ma Huateng. "Moreover, internet speeds will increase, and server costs will decrease—this is the technological trend. Dial-up internet is only temporary; broadband internet is the future. What we need to do is not to compete with others for a piece of the pie in the existing market, but to occupy the table in advance, so that when others want to join, there are no seats left. Don't worry about piracy—the core of online games is server-side verification. What's the use of pirated clients? Without server data, you can't even log into the game. This model is naturally immune to piracy."

Suning pushed a document in front of Ma Huateng and Zhang Zhidong.

The document was in a dark blue folder with the Imperial Seal logo of the Tianchao Group printed on the cover.

Ma Huateng took it and opened it. Inside was a game development plan with the words "Legend of Mir" printed on the cover, and a brief explanation of the core gameplay and world view structure below.

"I personally decided on the development plan for 'Legend of Mir'." Su Ning leaned back in his chair and began to break down the core concept of the game. "The core gameplay can be summed up in four words—monster killing, leveling up, getting equipment, and PvP. It sounds simple, but the simpler something is, the more addictive it is. Players kill monsters to get equipment, and once they have good equipment, they can bully others. If they get bullied, they want to spend money to become stronger. The equipment recycling system allows ordinary players to also gain benefits from killing monsters. Guild wars and siege battles create large-scale collective confrontations, and the reward mechanism for the Shabak City Lord keeps the strongest players motivated to compete. The social attributes are ingrained in the game's bones—if you can't beat someone alone, you have to team up. Teaming up means making friends. Making friends means chatting on QQ. After chatting, you make plans to go online and kill monsters together. Once this cycle is formed, user stickiness isn't measured in hours, it's measured in months."

Ma Huateng looked down at the plan, his mind racing, listening to Su Ning's explanation while mentally going through the entire logical chain from beginning to end.

QQ is a social relationship network, games are content consumption, and QQ Games Hall is the platform entrance. These three things are linked together, allowing users to seamlessly switch between social networking and gaming with just one QQ account...

You can see who is online, what games they are playing, and what level they are at in your friends list.

Once this closed loop is successfully implemented, the time users spend within the Tencent ecosystem will increase exponentially.

The length of stay is the commercial value.

“President Su, to get this project off the ground, we’ll need to expand the development team considerably.” Ma Huateng closed the proposal and looked up at Su Ning. “Our current manpower is all focused on the maintenance and iteration of QQ, and the international version is still expanding. If we add a game section, the number of developers will at least double. We need to hire people for every role: art, design, server-side, and client-side.”

"People are not a problem, money is not a problem. Headquarters will continue to send some professional game developers. In addition, I will give you a schedule. The mini-game platform will be launched within three months—games like 'Dou Dizhu,' 'Mahjong,' 'Link Link,' and 'Bubble Bobble.' These casual mini-games have short development cycles and low costs, but a large user base, which can quickly boost the activity of the game section. The QQ Games Hall will be developed into a platform product, with all mini-games connected to this hall. Users can log in with their QQ numbers with one click, without having to register repeatedly or fill in information again. The friend status seen in the game hall is synchronized with QQ."

"As for 'Legend of Mir 2'," Su Ning looked at Ma Huateng and Zhang Zhidong, "it's a large-scale online game, and the closed beta test must be completed by May of next year at the latest. Development should be the highest priority, and resources should be allocated accordingly. The engine, server architecture, combat system, and economic system—these core modules should be developed simultaneously. Don't wait until one is completed before starting the next. If we don't have enough manpower, we'll borrow from Tianchao Auto, and recruitment in Shenzhen should also proceed concurrently."

Ma Huateng and Zhang Zhidong both gasped in shock.

Internal testing before May next year?

It is July 1998 now, and there are still ten months until May next year.

Creating a large-scale online game from scratch in ten months was an almost impossible task in the gaming industry at the time.

But they knew Suning's temperament—this timeline was a conclusion, not a matter for discussion. Suning would never ask, "Do you think you can do it?" He would only say, "I want to see results by this point in time."

Su Ning added, "The core elements of 'Legend of Mir' will definitely be included: an equipment recycling system that allows ordinary players to sell the equipment they obtain from monster drops to the system for gold coins; guild wars that organize players into guilds of hundreds of people for regular large-scale battles; siege warfare where the strongest guilds across the server compete for a city, with the winner becoming the city lord; and a reward system for the Shabak city lord, where the city lord can collect taxes from all players on the server, and being the city lord for a day allows you to boast for a lifetime. These systems form the skeleton of the game, and everything else is just the flesh. Once the skeleton is in place, you can just add the flesh on top."

Zhuangzhuang was taking notes, writing down the terms "equipment recycling," "guild war," "siege war," and "Lord of Shabak City."

Zhuangzhuang didn't quite understand these gaming terms and couldn't imagine what it would be like for hundreds of people to fight over a virtual city in front of their computers.

But Zhuangzhuang sensed a change in the expressions on the faces of the two people opposite her. Ma Huateng's brows went from furrowed to relaxed, and the corners of his mouth unconsciously turned up slightly.

Zhang Zhidong's eyes were fixed on the plan, his gaze no longer filled with concern, but with a hidden anticipation and excitement.

"How about it? Can you do it?"

"Do everything in our power!"

"Great! Let others see the R&D capabilities of our Tianchao Group."

"Yes, Mr. Su."

……

That evening, Ma Huateng hosted a welcome banquet at a local Chaoshan restaurant in Shenzhen.

It's not a luxury hotel, just a private Chaozhou restaurant located on an old street.

Ma Huateng is from Chaoshan. He chose this store for two reasons: first, he wanted Suning to taste the authentic flavors of his hometown; second, he felt that people like Suning, who have seen the world, would value sincerity more.

Besides Ma Huateng and Zhang Zhidong, several core members of Tencent also came, including those in charge of technology, operations, and marketing, filling the entire private room.

When Su Ning arrived with Zhuang Zhuang, everyone stood up at the same time.

Su Ning waved for them to sit down, then pulled up a chair and sat down next to Ma Huateng, while Zhuang Zhuang sat down next to him on his right.

The food was served very quickly.

When the frozen flower crabs were served, there were still ice crystals clinging to their shells, and the crab meat was snow-white and firm.

The braised platter contains goose wings, goose feet, tofu, and large intestines. The aroma of the braising sauce fills the nostrils, making you hungry just by smelling it.

The oyster omelet has crispy edges and tender, juicy oysters in the center.

The meatballs in the beef ball soup are so bouncy they could be used as ping-pong balls.

The eyes of the steamed grouper bulge out, indicating that the fish was freshly killed.

Ma Huateng poured a glass of wine for Su Ning, saying, "Mr. Su, the owner of this restaurant is from our hometown of Chaoshan. The dishes are all transported from Shantou on the same day. Please have a taste."

"Great! Thank you for your kindness, Mr. Ma."

Su Ning picked up his chopsticks, placed a piece of braised goose wing in his bowl, and instead of eating it, continued, "As I mentioned at the meeting, games are the top priority going forward, but the operation of QQ itself cannot be neglected. With the rapid increase in users, the basics such as server load, account security, and spam filtering must keep up. Once users come, they can't feel that your product is easy to use but unstable. An unstable product will cause users to leave even faster. If you have two million users today, and the server crashes tomorrow, the day after tomorrow it will only be one million eight hundred thousand."

Zhang Zhidong put down his chopsticks and nodded seriously. "President Su, the technical team is already working on a server expansion plan, but the growth rate of QQ users far exceeds our previous expectations, so the expansion must be accelerated. We originally planned to add a batch of servers next month, but now it looks like we have to place the order this month."

"You don't need to worry about the money. Just purchase as many servers as you need. When submitting the application to Tianchao Capital for approval, we'll use the green channel, without any delays or obstructions. The server purchase contract will be sent to Tianchao Capital's finance department, and the finance department must complete the review within 24 hours. If they fail to do so, they will be held accountable."

"Thank you, Mr. Su."

Sitting next to Zhang Zhidong was a young key member in charge of marketing. He cautiously asked, "President Su, QQ's current user growth mainly relies on resources within the Tianchao Group—car dealerships, real estate sales offices, ports, and film and television—these channels helped us attract our first batch of users. But if we need to rely on QQ's own marketing team to acquire new users in the future, where do you think we should focus our efforts? There are only so many internet users in the country; how do we find them?"

Su Ning glanced at him with a smile on her face.

The young man's question was very specific, showing that he usually uses his brain when working. "Internet cafes. Personal computer penetration is still low, and a computer costs at least several thousand yuan, which is unaffordable for ordinary families. The vast majority of netizens' first stop to go online is an internet cafe. Every day, millions of young people are in internet cafes in major and minor cities across the country, and these people are potential QQ users. Your marketing department should organize internet cafe owners in major cities across the country and launch a 'QQ Demonstration Internet Cafe' program. For any internet cafe that participates in the program, Tencent will provide free QQ promotional materials and installation technical support. The default desktop of the internet cafe's computers will be set to the QQ login interface, so you can see that penguin as soon as you turn on the computer. Internet cafe owners benefit; they don't have to install the software themselves, and someone will help them with promotion. Tencent gains users; everyone who walks into an internet cafe and sits down will see QQ as the first thing they see. Nobody loses out."

The marketing manager's eyes lit up, and he sat with his chopsticks on his bowl for a long time without moving them. "President Su, our marketing department will go back and work on a plan."

Ma Huateng served Sun Ning a bowl of beef ball soup. After putting down the ladle, he said, "Mr. Su, you mentioned something on the phone last time: QQ's profit model can't rely solely on Chinese capital injections; it needs to have its own revenue-generating capabilities. I've been thinking, besides advertising and value-added services, are there any other avenues? Advertising isn't selling well right now; advertisers don't have a high level of understanding of internet advertising and feel they don't see results from advertising online. You mentioned that value-added services are a small amount of money, but I'd like to hear what you mean by 'big money'."

Su Ning took a sip of soup and put the bowl down. "The membership system. Didn't you ask me where the big money is? The big money is right under your nose. Once QQ's user base grows, you promote a membership. Members have exclusive red names, so when others see your name in red in their friend list, they know immediately that you've paid. Leveling up is accelerated; a member's one day of activity is equivalent to a regular user's three days, and they level up faster. The number of groups they can create is increased; regular users can only create two groups, while members can create five. There are also exclusive avatars, cloud storage of chat history, online reminders... Each of these privileges individually isn't worth much, but bundled together, users are willing to pay for identity recognition."

Ma Huateng did some mental calculations.

Currently, QQ has over two million registered users and hundreds of thousands of daily active users.

Even if only 5% of users become paid members, and each person earns a few dollars per month, the revenue would still be considerable.

Moreover, this income is not a one-time payment, but is received monthly, and the monthly cash flow is stable and predictable.

Ma Huateng raised his glass again and gestured towards Su Ning, saying, "President Su, I'll arrange for someone to work on this as soon as I get back."

"it is good."

As the banquet progressed, the atmosphere became noticeably more relaxed than at the beginning.

Several key Tencent employees took turns toasting Suning, and one of them took the opportunity to ask about technical architecture problems, "The current QQ client installation package is too large. It takes more than ten minutes to download it using dial-up. How can we compress it?"

"Break the installation package into core modules and functional plugins. Users can download a small core package to use it, while other plugins are downloaded silently in the background."

The man paused for two seconds after hearing this, then said, "So that's how it can be done."

"Mr. Su, the bosses of traditional enterprises outside are not optimistic about the Internet, they think it's a bubble."

Suning put down his chopsticks and said one word: "Infrastructure."

"Infrastructure?"

"That's right! The internet will become like water and electricity, a basic infrastructure for everyone's life. You think the internet is slow and expensive now because the infrastructure isn't built yet. When fiber optic cables are laid to every neighborhood, and when computer prices drop to two or three thousand yuan a unit, you'll look back at these doubts today and realize they're not commenting on the future, but describing their own ignorance."

Someone mustered up the courage to ask, "Mr. Su, what's your view on the prospects of foreign internet companies in the Chinese market? Yahoo and Microsoft are both eyeing the Chinese market now. If they enter, can we withstand the competition?"

Suning wiped his hands, placed a napkin on the table, and said, "In the Chinese market, only those who truly understand Chinese users can win. No matter how big an American company is, its products are for Americans. Chinese users' habits, aesthetics, and social interactions are completely different from those in the US. If you simply translate Yahoo's interface into Chinese and throw it at them, Chinese users won't buy it. They'll feel that this product isn't made for them. But we're different. We were born and raised here. We know what Chinese people like and what they need. Outsiders can never catch up in this regard."

After he said that, everyone at the table fell silent for a moment.

Everyone present was completely mesmerized, even Ma Huateng and Zhang Zhidong were eager to learn.

Then, someone started it, and everyone raised their glasses at the same time, "President Su, let's all toast you."

"Haha, great! Cheers to the vast potential of Tianchao Group and Tencent."

"cheers."

...(End of this chapter)