The gacha game makes billions, and Microsoft is intent on getting a similar IP for themselves.
Microsoft is investing heavily in Chinese game development in the hope of finding its own Genshin Impact after missing out on the gacha game the first time around.
That is according to a report in Reuters (thanks, VGC), that claims the success of Genshin Impact - which has generated over USD $3.7 billion since launch - has focused the US software giant's attention on Chinese development studios.
Genshin Impact is the biggest game to come out of China, and its multiplayer, cross-platform nature has made it a smash hit on PC, mobile, and PlayStation, where it is a console exclusive.
That console exclusivity came after Sony partnered with Genshin Impact's Shanghai-based development studio HoYoverse early on in development. Reuters sources claim Microsoft held similar talks, but a potential deal went nowhere - a fate they don't want to repeat.
Fear of missing out again has seen Microsoft build a team to scout for Chinese games, hoping to entice "independent studios with big-money offers" for games that would likely end up on its Xbox Games Pass.
According to Reuters, Microsoft has signed a deal with Shanghai-based Recreate Games for their upcoming multiplayer title Party Animals to launch exclusively on Xbox, and more deals are expected.
"Xbox contacted many projects in China and these projects primarily focus on developing console and PC games," said Chief Executive of Recreate Games, Luo Zixiong.
Chinese Game Developers Are Leveling Up
Chinese games and the development studios behind them have been rapidly catching up with their Western counterparts, and interest from gamers in Chinese-developed games has exploded since the launch of Genshin Impact.
Speaking to Reuters, Daniel Ahmed, senior analyst at researcher Niko Partners, said:
"Chinese game developers are trying to standardize their development tools, create advanced production processes, invest in really large-scale teams,
"Ultimately, that helps provide them with the competitive edge to reach a broad audience both in terms of geography and platforms."
Regulations in China, which restrict the number of foreign imports, have also helped spur this growth, as well as the wooing back of engineers to China who had previously left to work for top publishers in the West.
Sony was the first to sense the opportunity. In 2017, they launched the "China Hero Project", a gaming accelerator program designed to help Chinese developers publish games on PlayStation. So far, of the 17 titles they have supported, seven have reached the market, according to Reuters.
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