The Dream Factory Origin Story

Every great company has an origin story, but few have one as improbable—or as perfectly suited to the internet age—as the tale of miHoYo. Before their name became synonymous with billion-dollar mobile games and global cultural phenomena, before Genshin Impact dominated app store charts and made anime-style open-world games a mainstream proposition, before the word "gacha" entered the vocabulary of mainstream gamers worldwide, three students at Shanghai Jiao Tong University were just trying to make something cool for themselves and their friends. They had no venture capital, no industry connections, no business plan to speak of. What they had was passion, a shared love of anime and games, and the peculiar conviction that they could build something meaningful from their dormitory rooms.

This is the story of how that conviction was tested, nearly broken, and ultimately transformed into one of the most successful game companies of the modern era. It's a story about the collision between artistic idealism and commercial reality, about the courage to fail spectacularly before learning how to succeed, and about the strange alchemy that transforms a fan project into a cultural force. To understand miHoYo—now rebranded as HoYoverse but still carrying the DNA of those early days—we must first understand the dreamers, their world, and the moment in history that made their particular combination of talents not just viable, but potentially revolutionary.

The year was 2012. The smartphone revolution was in full swing, but the gaming industry was still grappling with what this meant for the future of entertainment. Console makers fretted about the implications of free-to-play mobile games. PC gaming had not yet experienced its renaissance of titles like Fortnite and League of Legends. Japan, the spiritual home of anime and manga, remained largely insular in its gaming culture, with titles rarely finding significant success outside their domestic market. Chinese gaming companies were primarily focused on the massive domestic market, churning out free-to-play titles designed to maximize revenue through aggressive monetization rather than creative innovation. It was into this landscape that three young men would step with ambitions that seemed, to most industry observers, almost comically naive.

Cai Haoyu, Liu Wei, and Luo Yu met as students at one of China's most prestigious universities, where they bonded over their shared passion for anime and games. This was not an uncommon interest among young Chinese people of their generation—Japan's cultural exports had been seeping into Chinese youth culture for decades, creating generations of fans who consumed anime, read manga, and played Japanese games with an intensity that often surprised Western observers. But Cai, Liu, and Luo were not merely consumers. They were creators at heart, people who looked at the media they loved and felt the urge to contribute to it, to become part of the worlds that had captured their imagination. This desire would eventually drive them to found miHoYo, but before that could happen, they needed to fail first.

Failure, in the context of startup mythology, often carries a certain retroactive glory. We tell stories of legendary crashes and burns that preceded ultimate triumph, and in the telling, these failures become almost necessary stages in the hero's journey—trials that forge character, lessons that prevent greater catastrophes later on. The reality is messier. Failure is painful, uncertain, and frequently terminal. Most companies that fail do not get a second chapter in the narrative. But miHoYo's first significant failure would prove instructive precisely because of what it revealed about the founders' priorities and their willingness to sacrifice comfort for creative vision.

The project was called FlyMe2TheMoon, and it existed in the early days before the company even had its eventual name. The concept was ambitious for a student project: an anime-style visual novel that would tell an emotional story about sacrifice, love, and the weight of choices. The name itself was a loving reference to the classic Sailor Moon anime, where the phrase "I will knock on that door of yours, even if I have to fly to the moon to do it" had become a touchstone for fans of romantic anime storytelling. This was a project made by fans, for fans, with no expectation of commercial success. It was an act of love, an attempt to create something that would honor the medium they adored.

The execution, however, revealed the gap between aspiration and reality that afflicts so many passionate but inexperienced creators. FlyMe2TheMoon suffered from the classic pitfalls of amateur game development: scope creep that exceeded the team's technical capabilities, art that didn't quite achieve the polished look they were aiming for, and a narrative that tried to do too much in too little space. The project was eventually released, but it garnered little attention and fewer players. For most observers, it would have been the end of any serious ambition to work in the gaming industry. For Cai, Liu, and Luo, it became a masterclass in humility and a foundation for everything that would come later.

What made FlyMe2TheMoon valuable was not its success—it had none—but what it taught the founders about the requirements for creative execution at scale. They had learned, in that cramped dormitory development environment, that passion alone could not substitute for discipline, that vision required infrastructure to achieve, and that the gap between loving a medium and being able to produce professional-grade work within it was vast and unforgiving. More importantly, they learned that these lessons could be learned. The failure had not broken them. It had revealed what they needed to work on.

The decision to formalize their collaboration and create a company came from this experience, but it was also driven by a more pragmatic recognition. The mobile gaming market in China was exploding, with smartphones becoming ubiquitous and app stores creating unprecedented opportunities for small developers to reach massive audiences. The barriers to entry that had protected the traditional gaming industry—requiring physical distribution, retail relationships, and massive marketing budgets—were collapsing. In their place was a new ecosystem where quality and viral potential could, in theory, substitute for corporate backing. For three students with technical skills and creative ambitions, this represented an opening that previous generations of aspiring game developers could never have imagined.

The founding of miHoYo in 2012 represented a calculated bet on this new paradigm. The company's name, a hybrid of Chinese and English that would later prove unpronounceable for many Western speakers but sounded perfectly natural to Chinese internet users, reflected its founders' bicultural aspirations from the start. They were Chinese by birth and circumstance, but their creative influences were heavily shaped by Japanese anime and global gaming culture. The company would serve both markets, or perhaps more accurately, it would serve the emerging global market for anime-style games that had no geographic home.

The early months of the company were marked by the kind of scrappy improvisation that characterizes most startups. The three founders, now officially in business together, operated out of small rented spaces, paying themselves minimal salaries while pouring everything they had into the next project. Their strategy, such as it was, reflected the lessons of FlyMe2TheMoon: they would focus on smaller, more achievable projects that could be completed with their limited resources while demonstrating the quality of their craft. They were building a portfolio, proving to themselves and potential future investors that they could execute.

The first such project was a web-based game called Guns Girlz, or in its Chinese title,崩壞學園 (Honkai Gakuen).