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While Dong Zhanbin hardly plays video games himself, some of the titles he has invested in are now among the most played across China. These include Dragon Nest M, which brought in nearly RMB 1 billion in revenue in its first month on the market.

As a founding partner at Qingsong Fund, Dong has also overseen the release of Three Kingdoms and Jieji Sanguo (an RPG similar to King of Fighters), which brought in returns of more than 60 times their original investment within six months. However, as the video game industry quickly expands to a multibillion-dollar business, he has switched his focus to other areas including social gaming.

When he helped set up Qingsong in 2012, desktop gaming was still king though smartphone titles were also gaining traction. Dong seized on the chance of investing in mobile gaming startups as he expected their business models to be similar to those of traditional gaming firms. “During the PC era, we figured out that the clearest revenue model was video games,” he said. “And in the mobile era, entrepreneurs would repeat the same process.”

In the fund’s first phase, Dong and his team invested in more than 20 startups. But then the focus shift completely. “Tencent and NetEase had taken up the lion’s share of the entire market and listed gaming companies left very few opportunities for startups,” Dong told Technode.

“There can be some chances for social games, such as our Werewolf investment in 2017,” he said.

Dong didn’t invest in any video games after the first-phase but that didn’t mean he had given up on the gaming sector — Laoyuegou, a gaming community for Chinese players, has become the biggest gaming search engine in China while audio-based social game Werewolves boasts over 60 million users.

He explained that his investment strategy is driven by younger gamers’ desire to make friends. According to QuestMobile, the number of active GenZ gamers has reached 275 million in China as of this June and social features are a key draw.

“Making friends is the most basic requirement for younger generations to rid them of loneliness and to help them connect,” he said.

Rachel Zhang is a reporting intern in TechNode's Shanghai office. She is earning a master's degree in journalism at the University of Hong Kong and holds a bachelor's degree in electrical engineering....

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