Former manager at NetEase Inc
- China’s gaming market development in Q1-Q4 2021, plus domestic and overseas gaming market segment development
- Current game content censorship criteria and trends, impacts on games by type and guidelines on players’ overspending on games
- Reasons for the suspended game licence issuance, plus forecast on the restart of game review and approval
- Whether the launched games are subject to the regulations, possible impacts and game companies’ countermeasures
- NetEase’s (HKG: 9999) core domestic mobile games – Q1-Q3 GMV performance review and evaluation on games launched in H1 2021
- Harry Potter: Magic Awakened – monthly GMV performance since Q3 and growth trends, user feedback and operational strategies
Officially published at the China Digital Entertainment Congress, the China Gaming Industry January June 2021 Report (2021 年 1-6 月中国游戏产业报告) shows that in H1 2021, the actual sales revenue generated in China’s gaming industry amounted to RMB 150.493bn, representing a steady growth of 7.89% YoY. The actual sales revenue from Chinese-made online games reached RMB 130.112bn, up by 8.3%YoY, accounting for over 80% of China’s gaming industry as a whole. More than 80% of the RMB 130.112bn came from mobile games. According to the July-September 2021 Mobile Game Report (2021 年 7-9 月移动游戏报告) published by Gamma Data, in Q3 2021, the actual sales revenue in China’s mobile game market was RMB 55.469bn, a decrease of 0.85% QoQ but an increase of 9.09% YoY. Can you analyse the fluctuations in the total game sales revenue in China in 2021 based on the statistics I just cited and your own observations? What about the gaming market development trends and competitive dynamics in Q3 and Q4?
You mentioned that regional press and publication administrations need time to recruit more personnel and organise internal training programmes on new regulations, so they are unlikely to resume the game review and approval process very soon. Some people said that regional administrations have delayed the resumption of the game review and approval process because they need time to check whether approved games conform to anti-addiction rules and other rules intended to protect minors, which is a heavy workload. What do you think of this?
In August, there was news that A Dream of Jianghu (一梦江湖), NetEase’s mobile role-playing game, offered a limited-time return for Rumengling (如梦令), a prop priced at RMB 248,000, but many users complained that it was too expensive. Can you comment on this kind of gameplay and incident? Will there be more restrictions on the overspending by adult players and the price of game props? What do you think of the future risks in game pricing mechanisms?
What are the main changes in the core requirements of game content censorship compared with the past, and what regulatory pressures are faced by different types of games?
You just mentioned The Day After Tomorrow and Undawn. NetEase has already launched The Day After Tomorrow. Will such doomsday-themed games be taken off the shelf?
You mentioned that the Honor of Kings is an MOBA game, and a big proportion of its users are minors. However, Tencent’s Q2 results seem to show that its players under 16 contributed only 2.6% of its revenue, right?
You mentioned earlier that the regulations on gacha games may lead to a certain limit on the daily GMV of Genshin Impact, but may not exert serious impacts on the total GMV. What are the reasons for that?
According to the documents issued at that time, NetEase and Bilibili were mentioned regarding game content censorship. Does this mean that these two companies have to face greater impacts under such regulations and need to make more adjustments accordingly? How to estimate the impacts on their revenue?
Do you think the games that are still in operations at present can serve as good examples of game content for the successful approval of other games in the future to a certain extent? Some developers are also launching mobile versions of their old PC games. If PC games are still in operations, mobile versions of the same games are likely to get approved. Do you think this assumption is tenable?
Could you analyse the impact on NetEase’s revenue from the self-inspection or rectification of its hard-core games that involve users’ overspending by citing Onmyoji or other games as examples?
The server of the Chinese version of Fortnite, a masterpiece shooting game operated by Tencent in China, was announced to be shut down some time ago. The game has been in public beta test for three years. Why did its public beta test come to an end so suddenly? Does this have anything to do with certain policies?
There are still many questions left, so we plan to make an appointment with you for another interview the next week or the week after next. In the remaining few minutes, could you introduce something about NetEase’s GMV? Could you predict NeEase’s overall performance in Q3 2021 in terms of its core mobile games and PC games? In particular, could you comment on Harry Potter: Magic Awakened launched in Q3?
Gain access to Premium Content
Submit your details to access up to 5 Forum Transcripts or to request a complimentary one week trial.
The information, material and content contained in this transcript (“Content”) is for information purposes only and does not constitute advice of any type or a trade recommendation and should not form the basis of any investment decision.This transcript has been edited by Third Bridge for ease of reading. Third Bridge Group Limited and its affiliates (together “Third Bridge”) make no representation and accept no liability for the Contentor for any errors, omissions or inaccuracies in respect of it. The views of the specialist expressed in the Content are those of the specialist and they are not endorsed by, nor do they represent the opinion of, Third Bridge. Third Bridge reserves all copyright, intellectual and other property rights in the Content. Any modification, reformatting, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, transferring or selling any Content is strictly prohibited