NTES(NTES)2024-05-23 15:55Financial Data and Key Metrics Changes - Total net revenue for Q1 2024 was RMB26.9 billion (approximately 1.2 billion), up 12.5% year-over-year [65] - Cash position remained robust with net cash of approximately RMB113.4 billion as of March 31, 2024, compared to RMB110.9 billion at the end of 2023 [65] Business Line Data and Key Metrics Changes - Mobile games accounted for approximately 79% of total net revenue from online game operations [36] - Youdao's net revenue was RMB1.4 billion, a year-over-year increase of 19.7%, primarily due to online marketing services [36] - Gross profit margin for Youdao decreased to 49% from 51.7% in the same period last year due to a higher revenue portion from online marketing services [37] - Cloud Music's gross profit margin increased to 38% from 22.4% in the same period last year, attributed to increased membership revenue and cost optimization [63] Market Data and Key Metrics Changes - Racing Master achieved significant success in both domestic and international markets, ranking number one on the iOS grossing chart in Taiwan and Macau [24] - Eggy Party reached over 40 million daily active users (DAUs) and expanded its thematic diversity [22] - Identity V celebrated its sixth anniversary with record-breaking revenue and DAU [21] Company Strategy and Development Direction - The company is focusing on expanding its game portfolio, particularly in the shooting game genre, to capture a larger market share [4] - There is a commitment to innovation in gameplay and technology, with plans to introduce new titles and enhance existing ones [43][51] - The company aims to strengthen its R&D capabilities and partnerships to broaden its genre base and reach global markets [53] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term sustainability of their games, emphasizing the importance of player enjoyment and engagement [74] - The company is actively working on titles for the global market, with successful games already established in regions like Japan [103] - Management noted that they have not observed a significant downgrade in consumer spending on games, attributing this to the emotional value provided by their offerings [116] Other Important Information - The company is committed to ESG practices, showcasing a reduction in greenhouse gas emissions by 11% compared to 2022 [34] - A renewed agreement with Blizzard Entertainment was announced to bring beloved titles back to China [54] Q&A Session Summary Question: What is the outlook for the Naraka: Bladepoint mobile version? - Management indicated that the testing phase validated innovations and boosted team confidence, with a launch expected during the summer vacation [93] Question: What is the status of the Condor Hero game? - Management confirmed that the game is performing within expectations and is undergoing upgrades for longevity [68] Question: What is the future game pipeline beyond 2025? - Management stated that details will be disclosed at the appropriate time, emphasizing ongoing development efforts [100] Question: How is the company addressing the consumption downgrade trend in China? - Management noted no significant changes in gamer spending patterns, highlighting the emotional value of their games [116]