NetEase Inc (NTES) Q3 2024 Earnings Call Highlights: Gaming Division Drives Revenue Growth ...

GuruFocus.com11-15

Total Net Revenue: RMB26.2 billion (USD3.7 billion), a 3% increase quarter-over-quarter. Gaming Division Revenue: RMB20.9 billion, up 4% quarter-over-quarter. Online Games Revenue: RMB20.2 billion, up...

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GuruFocus has detected 3 Warning Signs with JG.\n\nRelease Date: November 14, 2024\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.\n Positive Points \n\nNetEase Inc (NASDAQ:NTES) achieved total net revenue of RMB26.2 billion, with a significant contribution from its gaming division.\nThe company's popular game titles, such as Identity V and Naraka Bladepoint, reached record high revenues and player engagement.\nNetEase Inc (NASDAQ:NTES) successfully launched Naraka Bladepoint Mobile, which quickly topped the iOS charts and accumulated 50 million new users.\nYoudao, a subsidiary of NetEase Inc (NASDAQ:NTES), reported its first profitable third quarter with significant growth in AI-driven subscription services.\nNetEase Cloud Music saw healthy revenue growth and improved gross profit margins due to increased membership subscriptions and cost optimization.\n\n Negative Points \n\nTotal net revenues from games and related services declined by 4% year-over-year due to adjustments in PC live streaming services.\nGross profit margin for Youdao decreased year-over-year, primarily due to a decline in revenues from learning services.\nNetEase Cloud Music experienced a 2% quarter-over-quarter decline in net revenues from social entertainment services.\nInnovative businesses and others saw a 10% decrease in net revenue compared to the same quarter of 2023, mainly due to decreased advertising revenues.\nSelling and marketing expenses increased as a percentage of total net revenue, primarily due to higher marketing expenditures for new game launches.\n\n Q & A Highlights \nQ: What's the latest launch schedule for \"Where Winds Meet\" on PC and mobile, and how will the game integrate single-player and multiplayer modes? A: \"Where Winds Meet\" is set to launch on PC by the end of December, with the mobile version following shortly after. The game is designed to offer high-quality open-world exploration and social experiences. Players will start with single-player content and transition smoothly into multiplayer modes. Monetization will focus on tier-based cosmetic offerings and lighter models to foster a healthy social ecosystem.\nQ: How is NetEase planning to extend the lifecycle of \"Justice Mobile\" and \"Eggy Party\" given recent pressures on their grossing trends? A: For \"Justice Mobile,\" we aim to balance commercialization with user experience by enriching game content and exploring innovative monetization strategies. \"Eggy Party\" remains a high DAU product, and we are investing in long-term content development to provide more commercialization opportunities in the future.\nQ: Can you share more about NetEase's strategy for globalizing domestic studio games, especially following the success of \"Once Human\"? A: NetEase is pursuing a dual strategy: developing games in overseas studios for local markets and creating global releases from domestic studios. \"Once Human\" performed well, and upcoming titles like \"Marvel Rivals\" and \"Frostpunk\" are set for global release. We are confident in our ability to produce globally suitable content.\nQ: What has contributed to the better-than-expected reception of \"World of Warcraft\" and \"Hearthstone\" in China, and what are the future plans for these games? A: We have enhanced marketing and product strategies, including cross-brand collaborations and innovative social media campaigns. This has attracted new players and re-engaged existing ones. We expect strong long-term results and are planning to reintroduce \"Overwatch\" in China soon.\nQ: How has \"Naraka Bladepoint Mobile\" performed since its launch, and what are the differences in gamer profiles between the mobile and PC versions? A: \"Naraka Bladepoint Mobile\" has gained 50 million new users in four months. Mobile gamers have more diverse demands, including competitive play, social interaction, and cosmetic collection. We provide differentiated content for mobile and PC players, and the game is in a stable and healthy state.\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.This article first appeared on \nGuruFocus.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2483314043"}