HoYoverse, the Shanghai-based creator of Genshin Impact, is exploring AI as it seeks to expand beyond its anime-inspired titles.

This move comes after a 23% decline in sales in 2024, with revenues falling to US$4.7 billion.

Genshin Impact has brought in US$6.2 billion in mobile revenue since 2020, based on data from Sensor Tower.

However, newer titles like Honkai: Star Rail and the upcoming Zenless Zone Zero have reportedly shifted audiences away from earlier games.

To address this, HoYoverse is developing new genres such as open-world and farming simulators.

The company has also hired developers from major studios like Ubisoft and Electronic Arts.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Breaking the China-to-global barrier: Why HoYoverse succeeded where others failed

Chinese games historically struggled to gain traction with Western players until Genshin Impact changed everything in 2020.

The game earned about $6.2 billion from mobile players and generated its $100 million development cost back within just two weeks of launch1.

This breakthrough came after decades of Chinese games failing to penetrate Western markets, where players readily embraced games from Finland (Angry Birds) and Japan (Pokémon) but not China2.

HoYoverse’s success coincided with anime’s growing popularity among Western audiences. For example, 42% of Gen Z Americans now watch anime weekly according to a Polygon survey, providing a cultural foundation for their anime-styled games1.

The company’s approach of combining familiar Western gameplay mechanics from titles like Breath of the Wild with anime aesthetics created a formula that felt both novel and accessible to global players.

Unlike earlier Chinese titles that were perceived as clones, Genshin Impact and its successors were seen as original and high-quality productions, helping overcome the historical stigma attached to Chinese games.

2️⃣ Beyond games: Tech diversification as a growth strategy