Source: Naavik

Zenless Zone Zero is HoYoverse’s new urban fantasy action RPG, a follow-up to fantasy action RPG Genshin Impact and last year’s sci-fi, turn-based battle RPG Honkai: Star Rail. It launched globally on July 4th on iOS, Android, PC, and PS5.

ZZZ takes place in a post-apocalyptic futuristic city known as New Eridu and has HoYoverse’s trademark high production values, as you can see in its trailer. It will undoubtedly have a big launch, given its moe than 40M pre-registrations. This figure easily beats Genshin (10M pre-registrations) and Honkai (23M).

Pre-Registrations vs Launch Week Downloads
Source: data.ai, Naavik

A look at data.ai estimates also suggests Genshin got 23M downloads during its launch week and Honkai generated 43M downloads. It should be noted that these data.ai figures only include Apple and Google’s mobile app stores, but HoYoverse games are also on various PC/console stores as well as third-party mobile stores, so the actual numbers will be even higher.

Source: data.ai, Naavik

However, all has not been rosy for HoYoverse, as we saw in our Honkai deconstruction. In Q1 2024 Genshin and Honkai combined made $284M in Apple/Google mobile store revenue compared to Q1 last year, when Genshin alone made more at $302M. This can be seen in the RPD trend for Genshin versus Honkai, a proxy metric for LTV, which shows that Honkai is still trailing behind Genshin by month 14 at $10.43 RPD to Genshin’s $13.64. 

Considering that HoYoverse games are F2P RPGs that monetize through their gacha systems, let’s closely examine ZZZ’s notably more F2P friendly gacha engine and compare its changes to the existing titles. With the resounding success of Genshin, titles like ZZZ allow HoYoverse to experiment with different gacha monetization models, suggesting potential areas for future growth in the world of gacha RPGs.

Gotta Catch 'Em All

ZZZ's Gacha System
Source: Naavik

ZZZ’s gacha shop follows a standard setup to all previous HoYoverse titles: Players can spend real money for rolls in a slot machine for a chance to acquire the rarest characters and weapons, which are needed to clear endgame content. Every three weeks, a new slot machine — or Banner, in the game’s parlance — is added to the shop featuring new, limited-time items with higher drop rates. Once the three weeks are over, these items are added to the standard Banner and the cycle continues with new Banners.

This is why there are revenue spikes every three weeks for HoYoverse games; players pull on the new Banners to get the latest and slightly more powerful characters and weapons. They are also usually in sync, with the featured character Banner and weapon Banner a perfect fit for one another.

This standardization makes the HoYoverse gacha engines across Genshin, Honkai, and ZZZ quite comparable, assuming the core gameplay and the metagame drive players equally effectively to regularly pull on the new banners. The dollar cost to pull is also standard across all HoYoverse games, at about $2 per pull, and the pity system — which guarantees that after “x” pulls the rarer drops are assured — makes for unbiased comparisons.

"Hope for the Best, Expect the Worst" — Gacha in a Nutshell

Character Gacha GI vs HSR vs ZZZ
Source: Naavik

When looking at the limited character Banner drop rates for ZZZ, though the chance of a five-star character has remained the same across the three games (at 0.60% for Genshin, Honkai, and ZZZ), the four-star character and weapon drop rates are more generous. ZZZ’s four-star character drop rate is 7.05%, more than double of Genshin’s 3.33%, while ZZZ’s four-star weapon drop rate is 2.35% versus Genshin’s 1.77%.

This change in drop rates does not hurt the superfans and elder players chasing after the five-star characters, but eases up the journey for all players, who can now more easily get a B-team of maxed out four-star characters to progress through the game. With ZZZ entering a space now crowded with gacha RPGs, this early generosity likely makes the game somewhat stickier.

Weapon Gacha GI vs HSR vs ZZZ
Source: Naavik

The weapon Banner drop rates in ZZZ have also increased across the board. The five-star weapon drop rate in Genshin is 0.70%, Honkai’s is 0.80%, and ZZZ’s is 1.00%. ZZZ also has a significant increase in the four-star weapons, more than doubling their drop rate.

However, since the dollar-per-pull is the same across all games, the increased 0.30% chance for a five-star drop for the same dollar price is likely to hurt ZZZ, when compared to Honkai and Genshin.

It is also likely that these better odds can incentivize more spending and get more players in the flow of using the weapon Banner after primarily pulling on the character Banner. Which side of the LTV equation this falls will be seen in the RPD trendline once the game is live for some time.   

Standard Gacha GI vs HSr vs ZZZ
Source: Naavik

ZZZ has the same drop rates for five-star items, but the four-star items see a drastic increase for the standard gacha, which players usually avoid spending real money on. This was kept exactly the same between the last two games, Genshin and Honkai.

There is a trend in ZZZ, compared to other HoYoverse games, for all the gacha machines to be more generous in terms of four-star characters and weapons. As mentioned above, this makes the early to mid-game progress much smoother than other gacha RPGs. 

This is also why, after the global success of Genshin, other gacha RPGs that followed — like Tencent’s Tower of Fantasy and the recently released Wuthering Waves by Kuro Games — have slightly higher drop rates than Genshin.

Similarly, as a new contender in the space, ZZZ’s generous gacha machines are likely designed for a faster pace of item collection and progression to hook players right away, at the cost of slightly cannibalizing five-star item sales.

ZZZ’s New F2P-Only Gacha Machine

ZZZ's unique F2P Gacha
Source: Naavik

ZZZ also introduces HoYoverse’s first new gacha machine in a decade: a soft-currency-only Banner that players can pull to receive support characters called Bangboos. Players collect tickets to pull at this Banner by engaging in events and completing story missions, but unlike all the other gacha machines, this Bangboo Banner is not available for real money purchases.

In ZZZ, players’ teams include three characters and one Bangboo, versus four characters in other HoYoverse games. Therefore, players need fewer five-star items to max out their teams, which takes fewer pulls on the gacha Banners to complete. This is doubly true since the odds of receiving five-star items have risen, compared to Genshin and Honkai. If we connect the dots, we can see how this may hurt ZZZ’s relative monetization over the long term.

ZZZ has one more difference from its HoYoverse predecessors to combat this reduction in deck size: While in Genshin and Honkai players begin with a character that has five-star combat, in ZZZ the protagonists are noncombat characters who guide the squad in battle. This change to a noncombat protagonist basically ensures that ZZZ players still need to continually update their team with three five-star characters, despite the change in deck size.

“Every system is perfectly designed to get the results it gets”

HoYoverse has been operating many of the industry’s most lucrative gacha engines for over a decade now (as we covered in its founding journey). There’s no question that ZZZ is going to be HoYoverse’s next blockbuster hit, especially given the over 40M pre-registrations, but it will be interesting to see how the revamped and friendlier gacha engine impacts the game’s relative monetization.

Plus, as we saw with Honkai’s launch, there was cannibalization across the company’s games, and if that’s the case again here, there might be an impact on what the biggest spenders end up contributing, compared to previous games.

With a tentpole success like Genshin, much of HoYoverse’s experimentation around gacha monetization falls to successive titles like Honkai and now ZZZ. This can be seen elsewhere in the industry: King’s strategy for Candy Crush Saga is to try out offers and live ops in titles like Candy Crush Soda or Friends before the successful tests make it into the flagship title.

Genshin’s gacha engine has remained the same since its launch. Honkai has been out for 14 months and is still playing catch-up with Genshin in terms of LTV, so its gacha engine changes have not made it back to Genshin yet. ZZZ’s more generous approach, and the addition of a soft-currency-only banner, are risky moves. But if they prove fruitful, they are likely to make it into other HoYoverse games.

Even if these new changes don't propagate across its portfolio immediately, HoYoverse as a whole is still an average of $10M a month better off with Honkai and Genshin both on the market than before, with Genshin alone. So over the lifetime of the game, it's still a worthwhile investment and also a defensive move against other publishers. With ZZZ’s release, HoYoverse is further flexing its long-term dominance in its genre of gacha RPGs.

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