In today's industry, it would not be possible for a high production value serialized game like Genshin to exist and continue year after year if it were a box purchase game. That is fantasy economics. Take a look around at how the Western AAA box purchase model has been breaking apart for the last several years with flop after flop and studio closures. Black swan hits like Elden Ring and BG3 are the exception. Most games are not hits.
We know from
Mihoyo president Cai Haoyu and
one of the Genshin lawsuits that the initial development of the base game of Mondstadt + Liyue and 22 playable characters cost $100 million, for a simultaneous global cross platform release on PC, Playstation 4, Android, and iPhones. With the gacha model it took Mihoyo 2 weeks to recoup their initial costs. But annual development/operations (adding new content every 40 days, more events and quests, adding more patch lands like Dragonspine and characters, developing the expansion lands like Inazuma, etc) costs $200 million USD per year.
If each year of Genshin was sold as a box purchase game where your progression carries over from entry to entry (ie Inazuma 2021, Sumeru 2022, Fontaine 2023, Natlan 2024, etc), with each entry after the first one costing $200 million USD to produce and was sold for $60, then that becomes $40 Mihoyo gets after 30% platform fees. 200,000,000/40 = 5,000,000 copies need to be sold per game at $40 for that game to break even.
But you don't want to be breaking even. You want to be making enough profit to beat the stockmarket, because if you have all of these hundreds of millions of dollars and you are not reliably beating the stockmarket, then you mind as well just invest into that instead because the stockmarket is safer and nearly guaranteed. The annual stock market return is 10.5%.
Compound Interest Calculation: Future Value = 200,000,000 x (1.105)^2 = 244,205,000
ROI: = 244,205,000 - 200,000,000 = 44,205,000
Total Target Revenue: = 200,000,000 + 44,205,000 = 244,205,000
244,205,000/40 = 6,105,125 = 6.11 million copies sold at $40 each to reach revenue target
Look around. Is every Assassin's Creed entry selling 6 million copies at full price within the first few months before the deep discounting begins? And Square is consistently disappointed with the sales of their games. And those are established brand names, not new unknown quantities like Mihoyo was. And if Genshin was a $60 box purchase game, would anywhere near as many phone players be paying $60 for it? That would leave you with the Playstation and PC audiences, cutting your total sales. Also bear in mind that a huge part of Genshin's success was that it was available on phones and thus available to people in poorer or less developed countries outside of the US where people do not have gaming PCs or Playstations. And now the economy is getting worse off even in America as people are tightening their belts and spending less on entertainment.
The only thing like this hypothetical is the Trails series (annual serialized RPG series, anime), but the production values are not as fabulous. Trails does not get a brand new nation every year like Genshin. You get a new nation developed once every 4 to 5 years, and then the games in between add in a few extra new towns. A common complaint from Trails fans is that they spend too many hundred+ hour long games games in the same nation/towns. Trails does not have new content patches every 40 days. Trails is not voiced in four languages. Trails does not carry over all of your progression from game to game. Etc. How many millions is each Trails game selling within a few months of release before the discounting begins? So far, none. But Trails does not have global crossplatform release like Genshin does, and is not available on phones, so it is hard to compare (tl;dr Falcom has made a lot of mistakes like sticking to Playstation when Japanese JRPG players had long since abandoned it and gone to Switch. Falcom ignored promoting their games in the West and in China until very recently and missed the window of opportunity to get big there, etc).
Also bear in mind that people only have so much time and money to play games. Genshin had the first mover status of being far and away the highest production value of its kind in that genre with a global crossplatform launch and available on phones. In the five years since Genshin's release, only Mihoyo's next gacha game Honkai Star Rail has attained the same yearly revenue. After Genshin and HSR, the next highest earning 3D Asian gacha game in Wuthering Waves, which at best only makes a mere 30% of what Genshin/HSR does. (This is why there is skepticism about these other 3D Asian gachas coming up like ANANTA, Silver Palace, Azur Promilia, Ark Knights Endfield, etc).
Interesting that it's the only collab Hoyo has ever agreed to with another franchise
