The Millennium Semiconductor Survival Guide.

Chapter 172 Why Always Newman?

The cold winter of the Internet is still going on, and there is no immediate reversal of the predicament because the Fed stopped raising interest rates.

From Silicon Valley to Seattle, a large number of Internet start-up companies cannot obtain investment, and the market value of listed Internet companies has plummeted by more than 90%, and even delisted or closed down.

Internet companies with good performance and financial status can stop the downward trend.

In such a big environment, it is the only Internet company that can rise against the wind, with the market value of "Game of Genting" rising by 40% in two weeks after the release of the data.

So much so that the Wall Street media exclaimed:

"The winter has not yet passed, and Newman has led the fist game to usher in a new spring."

Game developers will be concerned about the secret of the success of "Game of Genting" and whether there is anything to learn from it. They hope to replicate the success of "Game of Genting".

Especially Korean game developers who have realized the power of free online games.

For Wall Street, what everyone cares about is why it is Newman again, and the companies under Newman have achieved great commercial success.

When other Internet companies were struggling under the influence of the Internet winter, Fist Games found a new profit model.

And it's a model that clearly has enormous potential for growth.

Riot Games has not returned to its previous peak, but it is much better than other Internet companies.

The New York Times reported last week that among the approximately 1000 Internet companies on Nasdaq, Riot Games is the Internet company with the highest percentage compared with its highest historical market capitalization point.

"Why always Newman?"

The cover article of Barron's Weekly, which is affiliated with Murdoch's News Corporation, is a large photo of Zhou Xin's face.

Barron's Weekly is a well-known financial magazine founded in 1921. After the Nasdaq bubble started, it published a cover article called "Burnout".

In the article "Burning Out", a large number of Internet companies are revealed. Among the 207 Internet companies surveyed, 71% of the companies have negative profits, and 51 companies will run out of cash within 12 months. Even the famous e-commerce company Amazon's cash flow can only last 10 months.The founders and early investors of a large number of Internet companies are doing what they can to cash out.The funds flowing from the old economic system to the new economic system will soon be exhausted, and Internet companies with no money to burn and no money to earn will soon fall from the altar.

Barron's Weekly has been paying attention to the Internet companies in Nasdaq since a long time ago, and it has long predicted that there is a bubble in the valuation of Internet companies in Nasdaq.

When your prophecy comes true, you will want everyone to know that my prophecy has come true.Not to mention financial magazines that depend to a certain extent on the quality of articles to survive.

Compared with magazines in other fields, financial magazines are more popular with weekly news because they are less influenced by Quora.

The audience of financial magazines is basically old money. These old money have a limited degree of adaptability to the Internet and a relatively low degree of acceptance of the magazine model of Quora, so financial magazines have not been greatly affected.

The old money's low adaptability to the Internet also makes them extremely curious about Newman.

Everyone has never dealt with Zhou Xin. They only know about his commercial success and his ability to lead his companies out of the crisis after the Nasdaq bubble burst.

Readers of "Barron's Weekly" want to know what kind of magic power Zhou Xin has, so "Barron's Weekly" took advantage of the trend and launched a cover article analyzing the rules of Zhou Xin's success.

"As we all know, Internet companies are facing an unprecedented crisis. The Nasdaq index has fallen by more than 50% from its high point, of which it fell by 3% in one day on March 12. Internet companies and shareholders are facing market value freedom. Tragic scene of falling body.

Market value decline-investors lose confidence-panic selling-market value decline, after such a vicious circle is formed, it is difficult to reverse the situation without external force.Not to mention that the external force has been negative news such as the Federal Reserve raising interest rates, company financial reports that are not as expected, and Internet companies' losses further increasing.More than 30% of Internet companies went bankrupt in this crisis, and the market value of most Internet companies fell by 60%.

Even Amazon and eBay, which are operating well, have fallen by 40%. At the same time, a large number of communication companies and hardware companies have been implicated. Cisco and Sun even lost 740% of their market value.Time Warner, which bought Quora for $40 billion last year, also lost 30% of its market value during the crisis.Netscape, the originator of the free software model, also lost most of its market share in the confrontation with Microsoft, and more than [-] IT practitioners were forced to change careers.

The Nasdaq slumped at the start of the day after a token rally on the news that the Federal Reserve had halted rate hikes.Such a severe winter seems to be unable to see the arrival of spring.In such a harsh environment, Riot Games has become the only Internet company favored in the entire NASDAQ market by virtue of its beautiful financial reports, stable cash flow and new profit model.

The market value of Riot Games is close to 200 billion US dollars, which is less than 20% away from its historical highest market value. Compared with other Internet companies, this is already the most eye-catching report card.Therefore, during our intensive exchanges with practitioners in the financial industry under the current situation, a question that everyone cares about is: Why is it always Newman?

From the sky-high valuation of Quora to the reversal of the dilemma of Riot Games, from the knowledge quiz community to the video game Internet service provider, why is Newman always able to achieve unmatched success by others?

There has never been an entrepreneur like Newman who has repeatedly verified his success in the Internet industry and handed over such impressive transcripts every time.

Even famous entrepreneurs like Steve Jobs have failed cases like NeXT, but Newman's venture has never failed.Even NewPay, which has not yet been listed, is hailed as the most anticipated unicorn company in the industry, and Goldman Sachs even gave a valuation of [-] billion US dollars.After the arrival of the Internet winter, whether NewPay can still enjoy a valuation of [-] billion US dollars remains to be tested by the market. "

NeXT is a computer company founded by Jobs. The sales volume of the first product is only 400 units per month, which is seriously below expectations.

The Sun mentioned above is a company focused on servers and workstations established in 1982 and later acquired by Oracle.

"If Matrix is ​​a failure, then Newman has also failed, but this is the hardware field, and Newman is undefeated in the Internet field."

Compared with Quora and Riot Games, Matrix's achievements are insignificant. With a valuation of US$499 and an annual revenue of US$2000 million, it will cost US$2000 million a year.The cost here only refers to the operating expenses of the keyboard sector, and does not include mobile phone research and development expenses.

Because Matrix's flagship stores are located in the core areas of big cities in the American and Europa regions, rent and decoration are expensive.

So much so that the outside world regards matrix as Zhou Xin's game. The matrix keyboard is very good from a product point of view, but a failure from a commercial point of view.

"As a financial magazine, we hope to help readers gain insight into the essence behind things, like we analyzed the existence of the Nasdaq bubble before, to explore why Newman has achieved one success after another, and what kind of magic he has.

Whether such magic can continue, as an investor, whether you can invest in projects that are personally operated by Newman does not require any other factors to be considered.

Let's take the reversal of the dilemma of the fist game as an example to analyze Newman's entrepreneurial logic in depth.Back in the summer of 1998, when Newman typed the first code on the official website of Riot Games, he certainly never thought that Riot Games could become a company with a market value of tens of billions.

At that time, Riot Games was only an official website set up to bypass offline channels with high agency fees, and it only served the game "Angry Birds".The payment method is also different from the current NewPay one-click payment. Players need to go to the nearest bank to transfer money. During the transfer process, a mobile phone number must be reserved, and then the mobile phone number will get a verification code receipt. Players can use the verification code to download the game. , thus completing the electronic payment in the era without electronic payment.

At that time, all game developers had to rely on offline game channels, even if offline game channels required more than [-]% of the sharing fee, unknown game developers even had [-]% of the sharing fee, and only a few famous game developers could enjoy [-]% share ratio.

Don't any game developers want to get rid of the shackles of offline game channels and sell directly online?Of course there is, but because there is no electronic payment, the labor cost of transferring money, confirming and then shipping is too high.And Newman creatively introduced the verification code to realize electronic payment. It can be seen that Newman can think of product design methods that other people can't think of to meet the actual needs.

Internet practitioners in Silicon Valley agree that Newman is a natural product manager. Innovation is as easy for him as drinking water, and he can easily find solutions to problems.A lot of needs were put there, and everyone knew people had such needs, but only Newman could find a solution.

Therefore, we believe that Newman's innovation ability determines that the company he founded will always have a first-mover advantage.

The second advantage of Newman, and what we think is the most important advantage as an entrepreneur, is that the strategic planning is extremely clear.There are not a few entrepreneurs with innovative capabilities. It is not difficult to figure out what to do now, but it is difficult to figure out what to do in the future.This is not only a difficult problem in the entrepreneurial process in the Internet field, but also widely exists in other industries.

NewPay is the second company founded by Newman, even earlier than quora.The earliest payment prototype of Riot Games was borrowed from NewPay to a certain extent. NewPay is the most popular electronic payment software in the United States, with a market share of more than 70%. The only electronic payment software on the market is NewPay and others.

After the fist game and the Yahoo game won the battle, after selling part of the fist game to Bill Gates, Newman created NewPay, and all his subsequent ventures revolved around electronic payments.

Riot Games' online video game distribution business, Quora's paid Q&A, and Quora's best picks, all without exception, are inseparable from electronic payments.These can all be called internet paid services.

Newman first adopted the incentive plan, that is, users can get cash rewards for registering NewPay accounts, and inviting friends to register NewPay accounts can also get cash rewards, which has won a large number of users.

After NewPay completed user accumulation, it began to launch Internet payment services. The Internet payment service only had NewPay as an electronic payment option, which brought more users to NewPay.

Under the positive cycle, it is NewPay's continuous expansion, and it is also easier for Newman's companies to harvest user payments. Newman's Internet service with electronic payment as the core has initially taken shape.

As for Riot Games’ newly added online game “Game of Thrones”, we found through a questionnaire survey that the most common payment method for players is the monthly pass, which is issued at a price of US$9.9 per month, and players can choose to subscribe.

After subscribing, NewPay will automatically deduct the payment every month. If you choose to subscribe, you will get a 5% discount for the first month.Do you feel familiar?The same subscription system as quora gold selection.

Newman will transfer the success of one model to another Internet service, pulling money out of users' pockets in a way that doesn't offend them.

We call this model the value-added model. Simply put, Newman’s Internet companies will provide users with high-quality free services, and on the basis of high-quality free services, provide you with more high-quality paid services.

Let users choose to purchase paid services involuntarily.

This is true whether it is quora or fist games. "Game of Genting" is a free game, the quality of which has amazed all game developers, and it charges by using costumes.Players willingly pay for it.

When the entrepreneurial philosophy of other Internet companies is Get Big Fast (don’t worry about anything in the early stage, first increase the number of users, don’t care about profits and revenue), Newman only cares about how I can achieve profitability.

Including when he participated in the Internet conference in Huaguo, his advice to Internet practitioners in Huaguo is also to find your profit method as soon as possible.

Newman made a long-term strategic plan under the principle of profitability, and then realized the strategic plan step by step”

The reason why Riot Games was able to soar in the stock price under such a bad environment is basically expected.

With the expectation of free games, everyone believes that fist games will become the only channel for free games.

Like stand-alone games, online game channels are highly competitive, and offline games should not be underestimated. It is difficult for Riot Games to achieve monopoly in this field.Most online game channels achieve monopoly.

Free games are different. Offline game channels cannot produce free games. Only online game channels can release free games. The user base of Riot Games determines that it will be the largest player in this field.

Free-to-play games have also proved to have strong profitability through the great success of "Teamfight Tactics".Then mastering Riot Games, which may be the only online game distribution channel, naturally has a higher bargaining power.

You can also enjoy the almost monopolized free game market.

Right now, there is only one free game, "Game of Thrones", which has generated tens of millions of dollars in revenue in just ten days, and Riot Games can earn more than 300 million dollars.

It is conceivable that the future is expected. Pressing a calculator is the basic skill among the basic skills for investors.

　I am back in Chengdu today, thank you every book friend for your blessings!

　　Although marriage is troublesome and tiring, it is still very happy.

　　Thank you again for your well wishes!
　　
　
(End of this chapter)