Genshin Impact has garnered a massive following across the world. With gorgeous visuals, endearing characters, and gameplay that keeps players coming back time and again, it's one of the biggest success stories in gaming from the last few years.
As much as it might seem that way from the outside, global phenomena don't just appear out of nowhere. The company behind the game, miHoYo, which recently changed its name to Hoyoverse, took a long journey to reach its present success. Let's take a look at the chain of events that brought gamers the world of Teyvat and its colorful denizens.
From Fans To Creators
Cai Haoyu, Liu Wei, and Luo Yuhao were classmates at Shanghai Jiao Tong University who bonded over their shared love of anime. The trio wanted to create anime games of their own, but in the mid-2000s there were few studios in China. The three would make games in their spare time while completing their studies, participating in several student game design competitions, and by the time they were within reach of their masters' degrees Cai, Liu, and Luo decided to form a startup. The financial crash of 2008 had limited their "safe" options as graduates, so they decided to go all-in on their passion and founded miHoYo in 2012.
The trio chose the name miHoYo because two of their given names, Haoyu and Yuhao, both had an H and a Y in them when written in English, so they decided to capitalize those letters.
Of course, new companies need money and space, two things that grad students aren't known for having in abundance. According to Wenhui Daily's Wei Zhong, the nascent miHoYo corporation received an interest-free loan from the Shanghai Science and Technology Entrepreneurship Center of 100,000 yuan (approximately 20,000 US dollars in today's currency). Additionally, the Entrepreneurship Center provided fifty square meters of rent-free office space for the company's first six months.
The trio still wanted to create anime-style games despite the fact that these weren't seen as profitable in China at the time. Liu Wei, who had become miHoYo's president, believed this was an untapped market. He believed that content created by fans for fans would lead to repeat business by developing brand loyalty. Even as miHoYo's fortunes would grow over the coming decade, most of the company's early hires were players; miHoYo had yet to prove that anime games were a respectable business, which limited their applicant pool and bringing devoted players on board fit with the company's philosophy that fans would make the best product.
The Honkai Series
Many of miHoYo's early games center around anime schoolgirls battling hordes of zombies with 2014's Honkai Gakuen 2 (released in the West as Gun Girl Z) being their third game and their first commercial success. Liu Wei would rather recall in an interview watching in astonishment as his Alipay account (a Paypal equivalent created by Chinese giant Alibaba) continued to grow throughout the game's first days. "I was young and had millions in my pockets," he says. "Couldn't have been more excited." It wasn't until their next title, Honkai Impact 3rd, however, that they truly had a worldwide breakout hit.
Honkai Impact 3rd's free-to-play model made the game widely accessible, and miHoYo maintained a close relationship with the fanbase to ensure the game continued to be a product that players were interested in. The game featured 3D hack-and-slash gameplay, unlike previous titles which were primarily 2D shooters, and the setting was further developed through a manhua (manga) series released in China.
Following Honkai's success in Asia (garnering a million downloads in Japan within just two weeks of launch), the game quickly spread globally. Indeed, miHoYo's strategy of cultivating a devoted fanbase may have worked a little too well; in 2021, a man was arrested for allegedly entering miHoYo's studios with a knife with the intention of murdering Cai, Liu, and Luo because an exclusive bunny girl outfit wasn't available to Chinese players.
Honkai Impact 3rd is still active, and a sequel titled Honkai Star Rail is in development, but its worldwide success would pale in comparison to the studio's next big release in 2020.
By 2017, miHoYo had grown from three college friends to a company with hundreds of employees. The company announced its next big project, a sprawling open-world fantasy RPG, at E3 2019. Genshin Impact's visuals and open-world gameplay got players' attention despite, as Polygon pointed out at the time, some being quick to dismiss it as an anime clone of Breath of the Wild. With more than half of the game's ten million pre-registrations coming from outside China, Genshin Impact became one of the most successful Chinese games at launch on the global market of all time - possibly even the top contender.
The game's success was a good thing, too - miHoYo spent an estimated one hundred million USD on the game's marketing and development, making Genshin Impact one of the most expensive games of all time to produce, costing more after adjusting for inflation than The Witcher 3.
For most of Genshin Impact's development process miHoYo had been trying to get approval to take its stock public. Chinese regulators had been hesitant to approve new public offerings from game companies following a string of industry scandals including everything from market manipulation to murder, and after three years of red tape miHoYo decided to withdraw their IPO just before Genshin Impact's launch.
According to China's Securities Times, by the end of 2020 (Genshin Impact was released in September of that year) the game was pulling in roughly six million USD per day, with its high point being a fourteen-million-dollar day on 21 October. The withdrawal of the IPO and Genshin Impact's record revenue meant that company owners Cai Haoyu, Liu Wei, and Luo Yuhao - already on the rise following the success of Honkai Impact 3rd - were now very, very rich.
Politics And Prosperity
Of course, astounding success in China means having to play ball with the Chinese Communist Party. On 24 September 2021 miHoYo elected a Party Committee, chaired by Liu Wei, making the company an official arm of the Party. Joining the Party, whether as a corporation or as an individual, is often a necessary step for social mobility and fewer than ten percent of applicants get in.
Whatever their personal politics may actually be, miHoYo's leadership is taking the company's motto - "tech otakus save the world" - to heart with their sudden influx of Primogem-laced cash. Cai, Liu, and Luo are working with their alma mater's medical school to develop brain-computer interfaces and are even investing in the research and development of nuclear fusion. With that level of reinvestment, who knows what miHoYo will do under their new branding of Hoyoverse, if Honkai Star Rail turns out to be another hit.
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