Genshin Impact's 59% Profit Margin: What We Should Steal from This Monster

Hello! This is Keke Asahi.

Today, I want to write about Genshin Impact, which is both a "thorn in our side" and the "pinnacle of our aspirations" for those of us working in the entertainment industry.

Whether you are in the game industry or involved in any kind of creation, you must have thought this at least once.

"How on earth do they do it?"

A massive update every six weeks. Quality that knows no bounds. And it's free-to-play.

When you're shown this, your own work starts to look pretty small, doesn't it?

But you know, I don't want to just end this by saying "that's amazing," like we always do.

In this article, I will explore the question of how this monster was born, while dissecting the "unconventional mechanisms" behind it.

There is no such magic as a "six-week miracle"

First, let's talk about that update pace that surprises everyone.

Creating that volume of content in six weeks is madness by any normal standard. Rumors even flew around that "they must be making their staff work without sleep or rest."

But the reality was more calculated, and in a sense, even more terrifying.

Actually, they aren't making it in six weeks.

It's just that things prepared months or even years in advance happen to "land" at that exact timing.

To put it simply, it's like a conveyor belt sushi restaurant.

Because plates keep coming in front of you, you feel like it's incredible speed. But in the kitchen, they've been prepping the fish for hours, cooking the rice, and multiple chefs have been working in shifts to keep making the sushi.

In the case of Genshin Impact, multiple development teams are working in parallel.

While Team A is making the current version, Team B is working on the one after next, and Team C is working even further ahead.

That six-week cycle isn't the result of a speed contest, but the fruit of super-massive pipeline management.

In short, what we are seeing is not a victory of "speed," but a victory of "preparation".

Don't you think this story also applies to the AI era?

Claude Code has been rapidly enhanced in 2025, allowing anyone to build a product in just a few weeks. It's an era where you can bring ideas to life even if you can't write code.

But what Genshin Impact teaches us is that 'making' a product and 'continuing to deliver' it are two different things.

It's not just about making one thing and being done with it. It's about looking years ahead and running multiple lines simultaneously. I believe that ability to plan is what creates a sustainable difference.

More like a financial institution than a game company

Next, let's talk about money.

As you know, miHoYo (the company that makes Genshin Impact) is profitable, but the details are a bit abnormal.

A 59% profit margin.

To put it very simply, this means that for every 1,000 yen in sales, 590 yen remains in their hands.

In a world where a few percent is the norm for general manufacturing, and 20% is considered excellent for an IT company, this number is a bug, isn't it?

Moreover, the numbers on common sales ranking sites only account for the smartphone version.

When you include billing on PC and PlayStation, the scale balloons even further. It is said to be generating revenue on the same level as Fortnite.

It's not just a 'popular game'.

It even has aspects of a massive financial system that uses abundant capital to move the world.

When I worked in the entertainment industry, I had many discussions in budget meetings about whether it was possible to recover such investments.

Usually, you carefully calculate the return on investment. Because if you fail, there's no turning back.

But miHoYo's calculation formula itself is different. They operate with the idea of 'burning' the money they earn rather than 'protecting' it.

That is the next point.

'Don't spend cheaply, but buy high and invest even more'

A common misconception is that 'they can do it because labor costs in China are low'.

This is also a big mistake.

Actually, their salaries are incredibly high.

There is data suggesting they pay about double the average salary in the Shanghai gaming industry.

If I had heard this back when I had no money,
I might have sent them my resume right away.

What they are doing is not about "doing things cheaply."

"Generously reinvesting the massive profits they earn back into talent and development."

Instead of keeping the profits from gacha as retained earnings, they keep burning them as fuel to create the next "amazing thing."

This "determination to reinvest" is the real engine that keeps their quality consistent.

There is a scene often seen in Japanese entertainment companies.

When a hit is released, discussions about shareholder returns or retained earnings begin first. It tends to lead to the mindset of "we don't know if the next one will be a hit, so let's hedge our risks."

That in itself isn't wrong. But as a result, the funds available to bet on the next big challenge decrease.

miHoYo is the opposite.

When they have a hit, they bet even bigger. They pile on talent and development costs to the limit.

This is a "winner's strategy."

It's a risk that can only be taken by those who have already won. It's hard for those chasing them to imitate.

But, that is exactly why I think we should consider "reinvestment at our own scale."

The founder left, looking toward "what comes after games"

What is even more surprising is the movement of the founders.

Cai Haoyu, the central figure who created "Genshin Impact," stepped down as CEO and started a new company.

What they are doing there is AI.

They are trying to create a completely new experience where you can interact with characters using AI.

I think this is a sign that they are not resting on their current success.

They have intentionally separated the 'otaku soul' that pursues technology to the limit from the 'business soul' that manages the company, creating an environment where each can run wild to the maximum extent.

Not satisfied with 'Genshin Impact,' they are trying to change the very way stories are created in the unknown territory of AI.

Their gaze is directed much further into the future than we think.

This really makes me think, too.

When I was a company employee, I was just trying to make the project in front of me successful. I didn't have the luxury of thinking about three or five years from now.

But Haoyu Cai stepped down as CEO at a time when 'Genshin Impact' was doing great.

Normally, you would think, 'Why, when you could earn even more?' But I think the next game had already started in his head.

The sin of breaking the player's 'norm'

Finally, and this is the most troublesome point, 'Genshin Impact' has changed the standards for players.

'An update every three months? Isn't that slow?'

The number of players who feel that way has increased.

A pace that was once fast enough now looks like 'negligence'.

This is unbearable for other game developers.

The experience created by 'Genshin Impact,' where a new world expands every six weeks, has raised the bar for the entire industry to the limit.

I don't think this is limited to the game industry.

TV viewership dropped because Netflix and Spotify created the experience of 'any content you want, whenever you want'.

Because Amazon made next-day delivery the norm, 'waiting a week for delivery' is no longer acceptable.

When an overwhelming player sets a new standard, the entire industry is forced to compete on those terms.

That said, there is no point in despairing here.

What should we learn?

The greatness of 'Genshin Impact' is not just a matter of luck or the power of money.

It is a combination of planning years ahead, overwhelming reinvestment, and a hungry spirit that is always aiming for what comes next.

It is an extremely logical 'victory of strategy' where all these elements are combined.

Therefore, what we should learn from this is not to fight them on their own turf.

If we try to go head-to-head, we will die.

Instead, just as they changed the world through 'preparation' and 'resolve,' I believe we should think about how we can prepare wisely within our own scale and invest our available resources into a single breakthrough.

In the AI era, anyone can build a product. It can take shape in four weeks.

But the difference between us and 'Genshin Impact' is born after the product is made.

A pipeline that looks years ahead. The resolve to bet the money you've earned on the next step. The decisiveness to move to the next field even after succeeding.

Rather than envying the monster, we should steal its thought process and apply it to our own way of fighting.

I believe that is the survival strategy for those of us who have nothing.