2024-08-22 16:46Financial Data and Key Metrics Changes - Total net revenue for Q2 2024 was RMB25.5 billion (approximately $3.5 billion), representing a 6% year-over-year increase [18] - Total net revenue from games and related VAS was RMB20.1 billion, up 7% year-over-year, primarily due to increased revenue from mobile games [18] - Gross profit margin for the second quarter was 62.9%, compared to 59.9% in the same period of 2023 [40] - Non-GAAP net income attributable to shareholders for Q2 totaled RMB7.8 billion (approximately $1.1 billion) [62] Business Line Data and Key Metrics Changes - Youdao's net revenue was RMB1.3 billion, a year-over-year increase of 10%, driven by online marketing services [60] - NetEase Cloud Music's net revenue was RMB2 billion, a 5% increase compared to the same period last year, mainly due to membership subscriptions [60] - Innovative business and others generated RMB2.1 billion, a slight increase compared to the same quarter of 2023 [60] Market Data and Key Metrics Changes - Mobile games accounted for approximately 76.4% of total net revenue from online game operations [18] - Identity V ranked number four on China's iOS top grossing chart in July and number two in August [30] - Justice Mobile reached the number three position on the iOS top grossing chart in June [10] Company Strategy and Development Direction - The company aims to expand its reach domestically and internationally through innovation and robust community ecosystems [4] - There is a focus on enhancing the game portfolio with diverse content and global partnerships [12][35] - The company is committed to investing in R&D to drive future growth [41] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the performance of new titles like Naraka: Bladepoint Mobile, noting that 70% of players had never played the PC version before [44] - The company is optimistic about the long-term potential of its games and the ability to maintain player engagement [70] - Management highlighted the importance of continuous content updates and community engagement to sustain game longevity [71] Other Important Information - The current share repurchase program has repurchased approximately 12 million ADSs for a total cost of approximately $1.1 billion [20] - The effective tax rate for the second quarter was 16% [41] Q&A Session Summary Question: Performance of Naraka: Bladepoint Mobile - Management reported that 70% of players on the mobile version had never played the PC version, with nearly half being new to NetEase games [44] Question: Adjustments to Fantasy Westward Journey - Management stated that adjustments are aimed at refreshing gameplay and maintaining quality, which is common for long-standing titles [67] Question: Revenue Growth of Identity V - Management attributed the revenue growth to continuous efforts in game quality and experience over the past six years [70] Question: Justice Mobile's Performance - Management noted that the game has entered a stable operation phase and emphasized the importance of maintaining player activity and ecosystem diversity [71] Question: AI's Impact on Game Production - Management highlighted that AI has been integrated into various aspects of game development, significantly improving efficiency [82] Question: World of Warcraft's Player Metrics - Management indicated that the return of World of Warcraft has exceeded expectations, attracting both new and returning players [99]