MiHoYo & Genshin Impact

Four college friends in Shanghai spent three years building a free game. Genshin Impact launched in September 2020 and earned $390 million in its first month. Within two years, it crossed $4 billion in total revenue. Mihoyo had never released a global title before. The business model was Gacha, a mechanic borrowed from Japanese capsule toy machines. Players spend real money on randomized character pools. The chance of getting a top tier character is 0.6%. A player who wants a specific character spends on average $160. 70% of revenue comes from 5% of players. Those 5% spend an average of $2,000 per year. Mihoyo released new characters every three weeks, each with unique abilities and storylines.