Chinese giant NetEase shares its Q1 2020 financial results

by Ragid Hallak
NetEase

NetEase is one of the biggest names in the Chinese market and in the mobile games market. Recently, the company shared its financial results for the first quarter of 2020 that ended on the 31st of March. Net revenues were RMB17.1 billion (US$2.4 billion), that’s an 18.3 increase compared to the same period last year. As expected, most of the revenue came from online games services. To be exact, online games revenue accounted for RMB13.5 billion (US$1.9 billion). 14.1 percent up compared with the first quarter of 2019.

70% of online games revenue was from mobile games

Based on the report, mobile games revenue accounted for about 70.3 percent of online games’ net revenues. It’s 70.4% and 72.1% down for the preceding quarter and the first quarter of 2019, respectively. Furthermore, Gross profit was RMB9.4 billion (US$1.3 billion), an increase of 21.2% compared with the first quarter of 2019. Titles like Fantasy Westward Journey and New Westward Journey Online II and recent hits “delivered strong performances” for NetEase. Total operating expenses were RMB 4.9 billion ($690.8 million), up 22.8% year-on-year.

NetEase

An artwork from Fantasy Westward Journey.

Also, the company talked about its games pipeline that has “thrilling titles” planned for launch in the coming months. These games are Fantasy Westward Journey H5, King of Hunters, PES Club Manager. Other upcoming titles in cooperation with other big companies are also planned like Harry Potter: Magic Awakened, Ghost World Chronicle, Revelation mobile game, Diablo Immortal, Pok√©mon Quest and, MARVEL Duel.

NetEase saw success in Japan too

William Ding, Chief Executive Officer and Director of NetEase said the following in the report:

The strength of our games business is supported by our growing portfolio of games with impressive longevity across an increasingly broad variety of genres. Encouraged by our success in overseas markets such as Japan, we are more confident and committed than ever to extending our reach internationally.

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