NetEase’s net revenue in the first quarter was 23.6 billion, and its games were actively developing overseas markets.
NetEase’s net revenue in the first quarter was 23.6 billion, and its games were actively developing overseas markets. NetEase’s four major sectors are: Online games, NetEase Youdao, NetEase Cloud Music, innovation and other businesses. In the first quarter, except for NetEase Youdao, the revenue of other sectors showed an upward trend. NetEase’s net revenue in the first quarter was 23.6 billion, and its games are actively expanding into overseas markets. NetEase's net revenue in the first quarter was 23.6 billion, and its games are actively expanding into overseas markets 1
On May 24, NetEase released its first-quarter financial report, with revenue still growing, but profits barely growing.
In the first quarter, NetEase achieved revenue of 2.3 billion yuan, a year-on-year increase of 14.8%; in accordance with U.S. GAAP, the net profit attributable to the company’s shareholders was 4.39 billion yuan, slightly higher than the 4.44 billion yuan in the same period last year. There are reductions. Excluding the impact of equity incentives and other aspects, based on non-US GAAP, the net profit attributable to the company's shareholders was 5.12 billion yuan, a slight increase from 5.08 billion yuan in the same period last year.
In summary, NetEase increased revenue but did not increase profits in the first quarter.
Judging from the performance of each business, NetEase’s most important online game business achieved revenue of 17.3 billion yuan, a year-on-year increase of 15.3; Youdao achieved revenue of 1.2 billion yuan, a year-on-year decrease of 10.4; Cloud Music achieved revenue of 2.1 billion yuan, a year-on-year increase of 38.6%; innovation and other businesses achieved revenue of 3 billion yuan, a year-on-year increase of 11.5%.
The game business accounts for 73% of total revenue and is still NetEase’s core sector.
On May 20, NetEase held a game conference and announced the latest progress of more than 40 games. The key product "Diablo Immortal" will be put into public beta on June 23, and it is expected to increase the revenue of NetEase games after it goes online.
According to NetEase, the domestic reservation volume of "Diablo Immortal" has exceeded 15 million, and the global reservation volume has exceeded 35 million. There are more overseas reservations than domestic ones, and increasing investment in overseas markets is also the general trend of the development of the domestic game industry.
According to Gamma statistics, the overseas market sales revenue of Chinese manufacturers in 2021 will be 18 billion US dollars, a year-on-year increase of 16.59; the Chinese game market sales revenue will be 296.5 billion yuan, a year-on-year increase of 6.4. Domestic regulations have become stricter and competition is fierce. Overseas markets have provided new growth opportunities for domestic manufacturers.
NetEase has previously achieved good results in overseas markets. Sensor Tower statistics show that in 2021, 30 Chinese mobile games were shortlisted for the Top 100 bestsellers in Japan, attracting a total of approximately US$3.46 billion. Among them, MiHoYo’s “Genshin Impact” ranked highest, followed by NetEase’s “Knives Out”.
In the conference call after the release of the financial report, NetEase CEO Ding Lei mentioned his concern for overseas markets. Ding Lei said that currently more than 80% of NetEase's R&D resources are invested in China, and the overseas proportion is more than ten percent. He hopes to expand to 40 to 50% in the future.
The European, American, Japanese and Korean markets are all important to NetEase. Ding Lei said that NetEase is actively seeking to discuss investment and cooperative development with various overseas teams.
NetEase CFO Yang Zhaoxuan revealed that NetEase will also publish "Harry Potter: Magic Awakening" in the Japanese market and "The Lord of the Rings" in the global market. In the future, NetEase will collaborate with more content and intellectual property partners to develop more game products independently or cooperatively.
For NetEase, whether the game goes overseas smoothly will be one of the main aspects of future performance. NetEase's net revenue in the first quarter was 23.6 billion, and games are actively expanding into overseas markets2
On the evening of May 24, NetEase announced its first quarter results for 2022.
The financial report shows that NetEase's net income in the first quarter was 23.556 billion yuan, a year-on-year increase of 1.48%; net profit was 4.394 billion yuan, slightly lower than the 4.439 billion yuan in the same period last year, and also lower than the 5.694 billion yuan in the previous quarter.
As of March 31, 2022, NetEase’s cash and cash equivalents, current and non-current time deposits and short-term investment balances totaled 107 billion yuan, and the cash flow generated from operating activities in the first quarter was 4.583 billion yuan. , lower than the previous quarter (8.369 billion yuan) and the same period last year (5.543 billion yuan).
Game revenue continues to grow. At the analyst meeting after the financial report, NetEase CEO Ding Lei focused on future game overseas plans, hoping to cooperate with more outstanding overseas teams and let them participate in content development. Overseas markets can account for 40-50% of NetEase’s total game revenue.
Game revenue in the first quarter was 17.3 billion yuan
35 million people around the world have pre-ordered "Diablo: Immortal"
From In terms of revenue structure, NetEase's four major segments are online games, NetEase Youdao, NetEase Cloud Music, innovation and other businesses. In the first quarter, except for NetEase Youdao, the revenue of other sectors showed an upward trend.
Among them, gaming revenue still contributes the most. NetEase’s online gaming services business’s net revenue in the first quarter was 17.3 billion yuan, a year-on-year increase of 15.3%.
The general background is that the growth rate of the Chinese game market is slowing down. Gamma Data released the "Game Industry Report from January to March 2022", which shows that in the first quarter of 2022, the actual sales revenue of the Chinese game market was 79.474 billion yuan. , a year-on-year growth of 3.17, which is lower than the year-on-year growth rate in the same period in 2021. At the mobile game level, in addition to long-term products such as "Genshin Impact" and "Fantasy Westward Journey" bringing revenue growth, new games such as "Civilization and Conquest" also contributed to growth, but the growth of new games was not as good as the same period last year.
According to statistics from the third-party platform SensorTower, the top three mobile games in terms of global revenue in the first quarter were Tencent’s “Honor of Kings”, “PlayerUnknown’s Battlegrounds” and MiHoYo’s “Genshin Impact”. "Genshin Impact" has sparked a craze around the world. Will MiHoYo's rise take advantage of this trend and have an impact on NetEase?
"The global game market has huge space, and it is difficult for NetEase and MiHoYo to roll up," Zhang Shule, a senior game industry analyst, told a reporter from Securities Daily, "But in the first quarter, NetEase Games' performance was only It can be said that it is quite satisfactory, and the product continuity performance is as good as ever and the quality is slightly ahead of its domestic counterparts. ”
What is worth looking forward to is the cooperation between NetEase and Blizzard Entertainment. The developed "Diablo: Immortal" will be launched in June. Currently, the game has received more than 35 million reservations worldwide, and more than 15 million reservations in China.
It is reported that "Diablo: Immortal" is developed based on NetEase's self-developed engine Messiah. Currently, NetEase has two self-developed engines, Messiah and NeoX, which respectively support the development of games such as "Knives Out" and "Onmyoji" and "Harry Potter: Magic Awakening".
In Zhang Shule’s view, “‘Darkness’ and ‘Harry Potter’ have different IP attributes. The latter, as a game adapted from film and television, is more about feelings, while the ‘Darkness’ IP has mature games. Features and a strong fan base, the success or failure of the new game will also determine the key step for NetEase to move from a game revenue giant to an international quality giant. ”
Game overseas market share 10
Ding Lei hopes to expand to 40-50 in the future
From August last year to April this year, there were no new batches of domestic game versions, so game manufacturers are focusing on overseas markets, and NetEase is no exception.
In April, games such as "Tianyu" mobile game and "The Lord of the Rings: Rise to War" were launched in the Japanese market, attracting the attention of overseas players.
Next, NetEase will also launch the console and mobile game versions of "Everlasting" and "A Chinese Ghost Story", and will launch "Harry Potter: Magic Awakening" in overseas markets.
In the analyst meeting after the financial report, NetEase CEO Ding Lei said, "NetEase attaches great importance to overseas markets and overseas game development. Currently, NetEase's game overseas market revenue accounts for more than 10%. In the future, we hope The overseas market share can reach 40-50. At the same time, NetEase hopes to cooperate with more excellent overseas teams and let them participate in content development. ”
In fact, NetEase has already. Accelerating the deployment of global gaming talents. In January this year, NetEase established Nagoshi Studio in Japan. The studio is led by Nagoshi Nohiro, the well-known game "Yakuza" series producer, and will develop new games for the global market.
This month, NetEase established its first U.S. game studio dedicated to PC and console game development. The head of the studio, Jack Emmert, has decades of experience in the MMORPG field. His main works include "City of Heroes", "Neverwinter", "Star Trek Online" and "DC Universe Online".
"Although the number of game versions has decreased compared with previous years, the trend of domestic high-quality games has not changed. Therefore, overseas markets will remain an important market target for domestic game manufacturers for a long time to come."
A brokerage analyst told a reporter from Securities Daily that in the 1.0 period when domestic game developers went overseas, they just changed the skin and language of the finished games, while in the 2.0 period, they have begun to localize them for different regions. Products, further advancement is to integrate into the local game culture, set up local studios or acquire studios, and focus on research and development in different regions.
"Games with different themes, different terminals, and different distribution regions do have obvious differences in user group structure, but NetEase is confident in making games that meet the needs of different regions, different consumer groups, and different terminals." Ding Lei expressed further. NetEase's net revenue in the first quarter was 23.6 billion, and games are actively expanding into overseas markets 3
NetEase announced its unaudited financial results for the first quarter ended March 31, 2022. In the first quarter of 2022, NetEase's net revenue was 23.6 billion yuan, a year-on-year increase of 14.8%; under non-GAAP, net profit attributable to the company's shareholders was 5.1176 billion yuan, a year-on-year decrease of 1%.
Blue Whale TMT Channel reported on May 24 that today, NetEase announced its unaudited financial results for the first quarter ended March 31, 2022. In the first quarter of 2022, NetEase's net revenue was 23.6 billion yuan (RMB, the same below), a year-on-year increase of 14.8%; under non-GAAP, the net profit attributable to the company's shareholders was 5.1176 billion yuan, a year-on-year decrease of 1%.
Specific to each business, the net revenue of online game services was 17.2727 billion yuan, of which the net revenue from mobile games accounted for approximately 66.9% of the net revenue of online game services. , while the previous quarter and the first quarter of 2021 were 68.3 and 72.8 respectively; Youdao's net revenue was 1.2005 billion yuan; NetEase Cloud Music's net revenue was 2.0672 billion yuan; the net revenue of innovative business and other businesses was 3.0154 billion yuan.
In addition, NetEase invested 3.4 billion yuan in R&D in a single quarter, and its R&D investment intensity reached 14. In the first quarter, NetEase Games accelerated global R&D and talent deployment, accelerating the promotion of self-developed games to go global. NetEase Cloud Music's gross profit margin increased to 12, and its original musicians were once again nominated for the Golden Melody Award. NetEase Youdao expands its R&D investment and increases its efforts in education digitization.
On May 20, "Diablo: Immortal", jointly developed by NetEase and Blizzard Entertainment, announced that it will be launched overseas on June 2 and June 23, 2022 in China and Southeast Asia markets respectively. . Currently, "Diablo: Immortal" has received more than 35 million pre-orders worldwide, and more than 15 million pre-orders in China. It is worth noting that "Diablo: Immortal" is developed based on NetEase's self-developed engine Messiah.
In April 2022, NetEase Yanxuan will celebrate its 6th anniversary. In the first quarter, NetEase Select Pro members increased by 65% ??year-on-year. In March 2022, NetEase Media became the first company in the industry to provide customers with long-term panoramic metaverse marketing solutions based on NetEase technologies and products such as virtual people, digital assets, and virtual event spaces. Internet company.
In Q1, the number of video plays on the NetEase News client increased by 44% year-on-year, the per capita post viewing time increased by 83% year-on-year, the number of daily active users of NetEase’s open courses increased by more than 20% year-on-year, and the number of NetEase knowledge video authors increased by 207.