Recently, I met an early member of Tencent. His name is Feng Linyi, but most people call him, Night Cat, his nickname. He currently is the CTO of Think Speed Group, a company he founded with a few of his friends, including another early Tencent member, Kung Hoising.
Early days in Tencent
Night Cat joined Tencent in 1998, when the company had only Pony Ma (currently Tencent’s CEO), Zhang Zhidong (currently Tencent’s CTO), Xu Chenye (currently Tencent’s CIO) and a few early members. His technical skill is superior and the first edition of QQ, Tencent’s flagship product, was developed by Zhang Zhidong and him. At that time, the instant messaging system was called OICQ, a clone of the American product ICQ. The system architecture they designed is still in use today, without any major changes. The product was only continually upgraded and expanded. Kung Hoising, Think Speed Group’s COO, was also involved in the development of QQ.
Online games
In May 2009, Night Cat and his team began to make online games. They developed a series of web games for the overseas market. Their first game was launched in October 2009. It is called “Napwar”, which means Napoleon War. It is an online strategy game based on European military history of Napoleon. Basically the game is free, but user can pay for better weapons and other game items. Afterwards, they launched “War of 2012”, “War Flow”, “Athuria”, and so on. All of them are online strategy games.
The company has signed an agreement with Aeriagames.com, one of the largest U.S. online game platforms, to promote its games. It has also signed an agreement with Gamewave Interactive Technology, which runs a leading web game platform in China. Currently, its games have a total of over 1 million users and game revenue reached HK$ 7 million last year. Night Cat estimated its game users would reach 15 million and revenue in online game would be over HK$65 million this year. In 2013, users could grow to 20 million and revenue would reach HK$200 million.
iTools – the new focus
As iPhone became popular in the recently years, Night Cat and his team started to develop a new product, in addition to online games. It is called, iTools (http://itools.hk/tscms/index.php?a=webpage&pid=12), a tool for users to manage their Apple iOS devices, including, iPhone, iPad and iPod. Users can easily view information on their devices, synchronize music / ringtones / photos / book / document with their computers, install software, download files from Internet, and so on.
Currently, there is another product in the market having similar functions. It is 91 Assistant, developed by NetDragon. But user have to jail-break their iOS devices, in order to use 91 Assistant. But for iTools, there is no need for jail-break. “It is very easy to use and it is fast,” said Stephen Chen, co-CEO of Think Speed Group. Since iTools launched in last July, its user have reached 3.5 million. Out of which, 40% are in China. Night Cat estimated iTools users could reach 25 million this year.
At present, as iTools is free, there is no revenue. However, when the user base is large enough, there would be income from advertisers who want to promote their apps through the iTools platform. Night Cat estimated they could earn about HK$31 million from advertising fee on iTools this year. In 2013, as the mobile advertising market become more mature, iTools’ revenue could reach HK$159 million when it has over 60 million users, said Night Cat.
Fast Growth in mobile Internet
China Internet Network Information Center (CNNIC) announced, as of the end 2011, Chinese netizens has reached 513 million, an increase of 55.80 million from the end of 2010. Internet penetration has rose to 38.3 percent. Mobile internet users has reached 356 million, up 17.5% from the year before. Close to 70% of internet user has used mobile devices to go online.
These trends are beneficial to Night Cat and his team. However, competition in the online game market is intensive. Moreover, as they target overseas market, they have to overcome the culture difference.
As for the company’s new focus, iTools, it could be the future of the company. However, currently the market is dominated by another competitor, NetDragon’s 91 Assistant. Almost every iPhone user in China has heard of 91 Assistant or is using the product to download software. Although iTools is more convenient and technically advanced, as there is no need to jail-break, it is difficult to change users’ habit. How to effectively promote the product would be crucial to iTools’ success.
Potential Partnership with Tencent
Both Night Cat and Gong Haising are from the founding team of Tencent. It is heard that the company is talking to Tencent for a potential partnership. Tencent is one of the largest Internet and online game companies in China. Its mobile QQ is also a must for every mobile phone users in China. If they can establish a good relationship with the Internet titan, it would help to promote iTools and their online game business.