After the e-commerce business was split, the game business once again became Netease’s only growth engine.
On November 21st, NetEase was able to release the third quarter financial report for the 2019 fiscal year after the US stock market. According to the financial report, NetEase’s revenue for the quarter was 14.64 billion yuan, up 11.2% year-on-year and 22% quarter-on-quarter, far lower than Bloomberg’s expected 17.412 billion yuan. Based on US non-GAAP, net profit was 4.73 billion yuan, up 74% year-on-year and 20.5% quarter-on-quarter.
Revenues maintained steady growth year-on-year, and the chain ratio decreased significantly. This is related to the sale of NetEase koala e-commerce business data in this quarter. In addition, the game business revenue extension also has an impact (the summer game business revenue portion is generally delayed). Next quarter). The net profit has increased substantially, which is related to many investment M&A transactions. During the quarter, Netease sold Netease koala to Alibaba for US$2 billion, and reached a final agreement with Alibaba and Yunfeng on Netease Cloud Music for about US$700 million.
Since this year, NetEase sold the e-commerce business Netease koala, the e-commerce business sector only has a strict selection. Therefore, since the third quarter of 2019, Netease has changed its segment disclosure and will provide advertising services. And selected financial results are added to “Innovative Business and Other Business”. In addition, NetEase began to disclose its track record. At present, Netease has adjusted the business segment disclosed in the financial report to online game services, and has a creative and innovative business.
After the new financial sector, online game service revenue was RMB 11.534 billion, up 11.5% year-on-year, maintaining a growth of 10 billion for six consecutive quarters; It was RMB 345.9 million, up 98.4% year-on-year; Innovative business and other business revenues were 2.755 billion yuan, up 4.5% year-on-year.
After the e-commerce business was adjusted, Netease focused on the core game business, which also became the biggest driving force for Netease’s growth. Ding Lei also said: “Online games are still the cornerstone of our business, and its existing games and exciting new games in China and around the world are growing steadily.” The flagship game “Fantasy Westward Journey Online” hit a total revenue this quarter. New records, international brands including Knives Out, Identity V and Life-After in Japan also have good performance on the iOS list, for example in the three months of the quarter “Knives Out” has repeatedly won the highest iOS income list in Japan. “Identity V” became the highest iOS revenue list in Japan for the first time in September. In addition, Netease and Blizzard cooperated in China to launch Blizzard Entertainment’s “World of Warcraft Classic”, the total revenue and users increased by a year-on-year.
In addition to refocusing the game industryIn addition, NetEase has not given up its investment in other fields. Ding Lei disclosed in the financial report: “Our main investment areas are online games, online education, music and private label e-commerce. With the initial public offering Upon completion, we will continue to invest in knowledge tools, online courses and smart devices to improve the learning efficiency of Chinese society.”
After the release of the financial report, Netease’s share price fluctuated greatly. Before the press release, Netease fell 1.32% after the close.