This article comes from WeChat public account:Touch (ID: chuappgame)author: Zhu Siqi
The end has already happened.
In May this year, Globe Entertainment, a well-known game manufacturer in Taiwan, announced that for the sake of the group’s long-term strategic development, it plans to sell the copyrights of “The Legend of Sword and Fairy” (except mainland China) and “Xuan-Yuan Sword” (globally).
The “Chinese Paladin” series is the childhood memory of countless players. The game was launched in 1995 and was developed by Mr. Yao Zhuangxian. In Taiwan, its sales exceeded 200,000, and the sales of genuine copies in mainland China exceeded 300,000, and the number of pirated copies is incalculable. It is almost the most influential domestic game, and to a certain extent, it is also a representative work of domestic games.
The copyright of the “Xuan-Yuan Sword” series, which debuted in 1990 and was earlier than “The Legend of Sword and Fairy”, was also sold, which gave old players a more complicated feeling. The “Xuan-Yuan Sword” series was once the best Chinese RPG. “Xuan-Yuan Sword 2” in 1994 laid the foundation for the historical sense and rich cultural connotations of the entire series. Although “Xuan-Yuan Sword 3: Beyond the Clouds and Mountains” in 1999 had a grand plot and was widely popular, it was evaluated as a “semi-finished product caused by rushing work”, and many contents were not completed in the mobile version until 2017 – at this time, the reputation of the series had also fallen to a very low level. After that, the “Xuan-Yuan Sword” series never regained its former glory.
These two ill-fated series have similar situations in the new era. They gradually fell behind the times and out of the public eye. The quality of subsequent stand-alone works has been increasingly questioned by players, and the mobile game adaptation has not made much progress. In fact, in 2021, Softstar sold the copyright of “Legend of Sword and Fairy” in mainland China to Zhongyou Mobile Games.
Now, things have gone a step further. If the sale is successful, the two national IPs of “Double Swords” that have existed for nearly 30 years will be completely separated from Daewoo.
For many gamers, this seems to mean the end of youth. For the entire Taiwanese gaming industry, the long end seems to have already begun – from the high spirits in the 1980s and 1990s, to the entry into the mainland market in the early 21st century, to the current decline, the downturn of the Taiwanese gaming industry seems to be irreversible. This is not only the result of the choices made by major manufacturers, but also a microcosm of the trend of the times in East Asia.
1
The early development of the gaming industry in Taiwan was closely related to Japan. Like many “latecomers”, the gaming industry in Taiwan also started in the gray area – that is, piracy. In Taiwan, early “practitioners” not only pirated game discs, but also relied on the experience of manufacturing electronic parts for Europe and the United States and the semiconductor industry to copy hardware products such as home game consoles, arcade machines and slot machines. One of the most popular home game consoles in Taiwan at the time was the “Little Genius”, a copy of the Nintendo FC (red and white machine). It was compatible with both genuine and pirated game cartridges at the time.
A Taiwanese player recalled that when he was a kid, he went to the night market with his parents and saw “Little Genius” and a wide variety of game cartridges at the roadside stalls. “You probably don’t believe it now, you can buy game consoles at roadside stalls,” he said when communicating with netizens, “but it was so popular at the time!” It happened that the “Teenage Mutant Ninja Turtles” animation was popular, and he took a fancy to Konami’s “Teenage Mutant Ninja Turtles 2” at first sight, so he persuaded his parents to buy it. At that time, he and his classmates and relatives also communicated with each other by exchanging various popular game cartridges. Every time he met with relatives and friends, he would try to figure out what cartridges they brought, “there was a sense of excitement as if a treasure appeared in front of him.”
In addition to home consoles, the most popular entertainment venues on the streets of Taiwan from the late 1970s to the early 1980s were arcades filled with knockoff arcade machines and slot machines. In order to play popular games, players would line up in long queues in arcades. Popular games at the time included “Devouring the World” and “Street Fighter”, etc. Every time a game started, there were huge crowds of onlookers, which was the most eye-catching moment in the memory of many players.
But there is a problem with this kind of place – there is a mixture of serious arcade games and gambling activities that are not so decent. The popularity of counterfeit gambling machines also brought a lot of gray profits to the arcade hall. This phenomenon soon caused negative social reactions and led to the “gaming machine ban” imposed by the Taiwan regional administrative department from 1982 to 1987.
The ban initially categorized gaming machines into “educational” and “gambling” types. In October 1981, the administration decided to ban “gambling video games” and prohibit the sale and operation of similar gaming machines in Taiwan. At the same time, all types of arcade machines and consoles were classified as “import-controlled goods”, but processing exports and foreign sales were not restricted.
In 1982, the administrative department suddenly decided to completely ban the sale and operation of game consoles and revoke the original legal licenses of related venues. Taiwan entered a five-year “total ban on game consoles”. This “one-size-fits-all” management method is quite similar to the later “game console ban” in mainland China. In 1987, the ban was lifted, and electronic game entertainment venues were placed under the jurisdiction of the education department. The education department issued new management rules and new regulations on game console hardware and software and business venues, with the main direction shifting to protecting young people and keeping entertainment venues away from schools. This shift from “total ban” to “protection of minors” later also appeared in mainland China.
The ban on arcades and game consoles indirectly promoted the development of PC stand-alone games at the time, while pirated games and consoles were still circulated through the underground market. That period of history is gray and chaotic, and today’s big companies often avoid talking about it when reviewing their performance. Fortunately, because of the rampant piracy, it appeared that the “market foundation was good”, which eventually attracted the attention of Japanese game companies. Companies such as Nintendo and Sega began to try to cooperate with Taiwanese companies, trying to open up the Chinese market with licensed products. But not every Japanese company can succeed. Boyu and Nintendo have reached a cooperation of more than 30 years, but Sega’s attempt to open a branch in Taiwan has not achieved much success.
Regardless of the outcome, these attempts marked the beginning of Taiwanese companies’ agency for genuine games, which was crucial to the localization and dissemination of some well-known works, and also allowed the participating manufacturers to gradually gain a foothold in the industry.
Some manufacturers that would later become famous had already emerged at this time, such as Soft-World Technology, which was established in 1983. In the 1980s, Soft-World Technology was one of the most well-known Taiwanese software companies. It not only signed agency agreements with more than 30 Japanese and American manufacturers, but also tried to compete with the rampant pirated CDs in Taiwan by offering a price war of “genuine products for only US$3” (no more than US$4) to seize the market. About 10 years later, Soft-World Technology tried to repeat this behavior in mainland China, and the slogan they used at that time was “59 yuan for genuine products”.
The agency business gradually evolved into imitation. In 1991, Softstar first launched the “Romance of the Three Kingdoms” imitating the Japanese Koei game “Romance of the Three Kingdoms”. In the following years, they bought the copyright of Jin Yong’s works and successively launched stand-alone games with the themes of “Swordsman” and “The Legend of the Condor Heroes”. The quality of these works is average, but they still gained a lot of players due to the appeal of the subject matter.
Founded in 1988, Softstar Information is one of the few companies that focuses on original works rather than agents. They founded the monthly magazine “Software Star” to introduce Softstar products, and released the first work of the long-lasting “Monopoly” series in 1989. In 1990, they released the first Chinese-based role-playing game “Xuanyuan Sword”. In 1995, the epoch-making “The Legend of Sword and Fairy” was released and caused a sensation.
There are many reasons for this sensation. The earliest batch of Taiwanese game developers produced many amazing works with their own game experience and creativity. They combined the martial arts and fairy tale themes that are well-known in the Chinese world with the popular JRPG gameplay at the time. Whether in terms of picture accuracy or gameplay, the works can be in line with the world’s first-class level – at that time, games had not yet fully entered the era of competing in functions and development scale, and a team of dozens or even dozens of people could produce quite good commercial works.
In addition, the uneven development of East Asia at that time and the scarcity of Chinese games made the Taiwanese game industry take the lead in terms of time, location and people. The reason why Taiwan became the birthplace of piracy, agency and even many original works later was largely because it was the only region with the conditions to intensively contact relatively advanced game culture in the Chinese environment at that time, and the local hardware and software technical capabilities to carry out some “reference” and then develop the research and development of original works. At the same time, although the mainland was already in the early stage of reform and opening up, the degree of economic development and openness was still not as good as that of Taiwan. With the personal computer and console ownership rate of mainland residents at that time, I am afraid that they might not even be able to play pirated games, let alone consume genuine games or even make games. The territory and market of Hong Kong are not only smaller than Taiwan, but also relatively speaking, there is not much accumulation of game culture and technology.
Even international competition was not that fierce at the time. In 1997, South Korea was caught in the Asian financial crisis and was temporarily unable to make any achievements in the game industry. The Japanese game industry has always been in a leading position in East Asia, but its dominant platform has always been consoles. Therefore, Taiwanese games were able to develop smoothly on PCs, and many classics were produced based on the DOS system at the time.
Under such circumstances, when these games that tell the stories of Jin Yong and Gu Long, with exquisite and colorful graphics and played in Chinese, appear in front of players, it is natural that they can immediately set off a national trend on both sides of the Taiwan Straits.
In 1995, home computer systems were updated from DOS to Windows, which was more open and had powerful multimedia processing capabilities, and computer games began to develop rapidly. Game development became more and more professional and complex. Developing and porting games on new systems required more professional programmers. A group of software talents entered the game industry, further expanding the scale of the industry, and a group of new-era games continued to become popular on both sides of the Taiwan Strait.
So, in a sense, the rise of Taiwan’s game industry in the 1980s and 1990s was the result of the personal talents of early game developers and the external environment. According to estimates by the Taiwan Institute for Information Industry Research Institute, the final consumption amount of the game market in Taiwan in 1998 reached NT$2.8 billion (about RMB 693 million that year). In contrast, the first game industry report in mainland China showed that the game output value in 2001 was RMB 100 million.
But this cannot change an underlying fact: the overall market environment in Taiwan is actually inherently insufficient. Not only is the scale limited, but there are also some stubborn management problems, especially serious infighting within the company. When combing through the history of the game industry, Taiwanese content creators often summarize it as management “taking shortcuts” and “disrespecting talent.” These factors have led Taiwanese companies to enter the mainland market, and even the more distant markets of Japan, South Korea, and Malaysia, but they have been repeatedly frustrated. As time goes by, the competitiveness of the mainland game industry has come from behind, and cracks have begun to appear in the glorious edifice of the Taiwanese game industry.
But that was a thing of the past. In the 1980s and 1990s, Taiwan’s gaming industry was still thriving.
2
In the 21st century, the gaming industry ushered in the Internet era. Various “Online” games became the new trend. Taiwanese manufacturers were very sensitive to the changes in the situation. They started to act as agents, operate and develop online games very early, actively tried to enter the mainland market, and once achieved quite good results.
“Lord of Kings” is often considered “China’s first graphic online game”. Its predecessor was a text-based MUD game developed by Taiwanese developers Chen Guangming and Huang Yuzhen. Later, Huacai Software, which had previously represented “Delta Force 3”, made the game graphic and provided server and technical support. In 1999, the graphic version of “Lord of Kings” was released in the Taiwanese market. In 2000, Huacai Software introduced the game to the mainland. In just one month, it reached a record of 10,000 people online at the same time. Considering the number of people online in 1999, this was a pretty amazing number.
Taiwanese manufacturers also represented many Japanese online games, among which the more famous one was “Stone Age” represented by Huayi International. This turn-based RPG game became very popular after it was introduced to the Taiwanese market, and was also very popular after it was tested in mainland China in December 2000. Softstar Games followed closely and represented Square Enix’s “Magic Baby”.
During this period, the Korean game industry took a different approach and sought development in the field of online games, and soon overtook other companies, producing excellent works such as “Lineage”, “Dragon Clan” and “RO Ragnarok”. Some Taiwanese manufacturers sensed the change in the trend, such as Orange Games, which was founded in 1995. Although it once won the annual sales champion with the stand-alone game “Convenience Store”, it has never been able to compete with manufacturers such as Soft-World and Soft-World. Later, they began to turn their attention to online games and achieved great success with “Lineage”, which was represented by NCsoft.
Facing the popularity of online games around the world, Taiwanese manufacturers have tried to develop their own games in addition to acting as agents. Many classic stand-alone IPs have embarked on the journey of online games. For example, since 2001, Softstar has successively launched works such as “The Legend of Jin Yong Online”, “Romance of the Three Kingdoms Online”, and “Devouring the World Online”.
The popularity of online games and the enthusiasm of players can be seen from the grand occasion of Internet cafes in the past. In 2021, a Taiwanese netizen visited an Internet cafe in Kaohsiung City. The Internet cafe is now hidden in the alleys and is very quiet. Rows of old wooden computer tables are placed with yellowed white old computers with “World of Warcraft” advertisements on them. In the heyday of online games around 2000, the store could buy display screens worth NT$24,000 (about RMB 5,375). At the busiest time, 17 machines were squeezed into the narrow store, and the crowd was packed.
A player who used to live nearby said that the Internet cafe carried most of his memories of primary and middle school. “I still remember that the aunt (the boss lady) was always playing ‘Jin Yong’!” Now, he has moved away for many years and has become the father of two daughters, but he still goes back to visit every year.
Like him, many people can’t forget their childhood memories during the heyday of online games: “I still remember when I was playing “Lineage”, people from the neighboring Internet cafe came over for a ‘real-life PK’…” Even the experience of being caught by their parents and being dragged home crying is an unforgettable good time in the eyes of these middle-aged players.
There are also many players in the mainland who are obsessed with these online games represented by Taiwan. “Stone Age” can be said to be the most popular game before “Legend of Mir 2”. In 2003, “Magic Baby” had tens of millions of registered users, attracting a large number of players who were not so fond of the high-pressure PK environment of “Legend of Mir 2”. Not only that, many Taiwanese manufacturers chose to rent servers from mainland portal websites, such as NetEase and Sina, in order to save server costs. This also made the latter see the huge potential and business opportunities of games.
However, the glory of Taiwan’s online games and agent-based online games in the mainland did not last long. Soon, they became the product of “an era that can never be returned to” on both sides of the Taiwan Strait.
There are many reasons. For example, some large manufacturers are slow to turn to the market, and their long-term experience in single-player games has made them lack experience in long-term operation of games. Soft World Technology is a representative of this type of manufacturer. Compared with R&D, the threshold for agency is low and the money comes quickly, but it has certain requirements for operation capabilities. Some Taiwanese manufacturers are not doing well in this regard, especially in cracking down on plug-ins and private servers, which have the greatest impact on the community environment and player enthusiasm. Many Korean online games, including the “Stone Age” mentioned above, have encountered similar bottlenecks after operating in Taiwan and the mainland for several years, which eventually led to the loss of players. Some Taiwanese players complained on social media that “(Manufacturers) make a lot of money after acting as agents for new games, and then shut down the servers the next year, repeating the same operation over and over again.” This remark is a microcosm of the poor operation of online games by many Taiwanese agents.
Online games have certain requirements for server scale and network technology, and Taiwanese manufacturers are not well prepared in this regard. Many players have protested against frequent disconnections, lost files, and lags. In 1999, Ultima Online, which set up servers in Taiwan, once had players “collectively commit suicide” in the virtual world to protest the poor connection quality. However, the Taiwan branch of Electronic Arts (EA) was powerless to solve such technical problems and could only wait for support from the original manufacturer in the United States.
Frankly speaking, Taiwanese game manufacturers have long set their sights on the mainland. Their idea is to use Taiwan’s advanced technology and development experience, as well as the mainland’s relatively cheap labor, to develop online games and operate them in the mainland market with a vast user base.
In 2003, an analysis article pointed out that the layout of Taiwan game manufacturers gradually focused on the mainland. Among the leading manufacturers, Softstar Information has set up Beijing Netstar Enix, Beijing Universe Star, Beijing Softstar and Shanghai Softstar in the mainland. Game Shinkansen, a subsidiary of Soft-World, has branches in Beijing and Shanghai. Yuquan International, which has developed “Swordsman” and “The Return of the Condor Heroes”, mainly carries out game distribution work in the form of outsourcing and cooperation with local telecommunications industries. Huayi has set up a subsidiary in Beijing that focuses on operations and opened a software development center in Sichuan.
But these attempts were not all smooth. First of all, the thinking of Taiwanese game manufacturers at the time was actually similar to that of Taiwanese companies building factories in mainland China. However, as a cultural product, the content of games needs to be closely related to the preferences of the market population it is targeting. From design, operation, to service and even pricing, the strategy suitable for Taiwan may not necessarily be suitable for mainland China. What’s more, some Taiwanese game developers are always accustomed to applying their experience from existing markets to new markets in their entirety – not to mention customs and habits, the huge gap in the number of people alone is enough to cause qualitative changes.
Secondly, Taiwanese game companies are generally small in scale and have a simple management style. After entering the mainland market, they often experience crazy expansion. With the huge market, the size and income of branches are often several times that of the Taiwan head office. In this comparison, most family-style company management problems have arisen during the expansion process – on the one hand, managers from Taiwan may not have the experience of managing and leading large-scale development teams; on the other hand, companies operating in the mainland have huge incomes, but because they are far away from the headquarters, they are often on the edge of the discourse power. Branches want to seize power, and the head office wants to reap the benefits, which eventually leads to frequent internal fighting.
Softstar Games once exposed this internal struggle to the players. In 2000, Softstar Games’ core production staff, including Yao Zhuangxian, the “Father of Chinese Paladin”, went north to establish Softstar Technology in Beijing. Later, in order to recruit talents in the south, Softstar Shanghai was established. However, the mainland branch and the Taipei parent company were always deadlocked over the ownership of the IP of “Chinese Paladin” and which group should produce it, which directly led to the ill-fated development of the second and third “Chinese Paladin”.
What made the situation even more serious was that many mainland companies were becoming strong competitors to Taiwanese companies in terms of agency and R&D. After seeing the profits from online games, a number of listed companies entered the market. Compared with companies like NetEase, Shanda, and Giant, Taiwanese companies had no advantages in terms of company size, cultural familiarity, corporate atmosphere, and salary. Game developers – whether producers or ordinary employees – no longer preferred Taiwanese game companies when looking for jobs.
In this environment, the good opportunities originally granted by the external environment are no longer available, and Taiwanese game manufacturers have gradually lost their irreplaceable characteristics in the Chinese environment. Many Japanese and Korean games that were originally distributed to the mainland by Taiwan have gradually been replaced by mainland agents as the mainland game industry develops.
At the same time, the early 20th century was also the era when electronic games began to be 3D. Taiwan manufacturers’ own funds and technical accumulation were not enough to keep up with this trend, and the audio-visual quality of their products was far behind that of American and Japanese games of the same period. At this time, it was no longer as difficult for players on both sides of the Taiwan Strait to access American and Japanese games. In comparison, the competitiveness of Taiwan manufacturers further declined.
Moreover, many creators still cling to the old 2D turn-based JRPG thinking and find it difficult to adapt to the social design and operation methods of the online game era. For example, former leading manufacturers such as Soft-World Technology prefer to rely on IP value agents and develop “fast food games” rather than independent research and development. Various rough works adapted from classic IPs such as “Romance of the Three Kingdoms” disappeared after a short period of popularity; they even tried adult Galgame, but it obviously did not help much to increase market share.
Wang Junbo, CEO of Soft-World Technology, once summarized the difficulties faced by Taiwanese manufacturers. In addition to the right time, right place and right people, “the most important issue is the issue of quantity, the quantity of the market, the quantity of capital and the quantity of products.” “Shanda, NetEase, Perfect World, Tencent and Sohu are all large Internet companies. They have all entered the game field and brought in a lot of funds. Taiwan is still dominated by those small companies fighting alone.”
In fact, if we only look at the revenue of each company, these Taiwanese manufacturers can still be considered successful. In 1999, the annual revenue of Soft-World was only NT$690 million (about RMB 170 million during the contract period). By 2011, the annual revenue of Soft-World Group was NT$7.87 billion (about RMB 1.92 billion during the contract period), and the volume increased more than ten times in ten years. What is gradually shrinking is the position of manufacturers in the market. Under internal and external troubles, the Taiwanese game industry has irreversibly begun to decline after the first decade of the 21st century.
(To be continued.)
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