Against the backdrop of a high gaming revenue base in Q1 last year, NetEase Games still achieved a 7% revenue growth in Q1 this year, with multiple products under its umbrella achieving record high revenue and delivering a steady response. Recently, more than 10 new game developments have been released in one go, and there will be plenty of ammunition in the second half of the year.
Today, NetEase (09999. HK) released its Q1 2024 results. Among them, the revenue from games and related value-added services was 21.5 billion yuan, a year-on-year increase of 7%, accounting for 80% of the company's total revenue, basically in line with institutional expectations.
Further decomposition reveals that revenue from online games accounts for 95.2% of the aforementioned business revenue, with 93.4% and 92.7% in the previous quarter and the same period last year, respectively. Among them, revenue from mobile games accounted for 78.6% of online gaming revenue, accounting for 76.7% and 72.3% respectively in the previous quarter and the same period last year.
The growth in performance is supported by products, In Q1, multiple games under NetEase achieved record high revenue. Including long-term operational products such as "Fantasy Westward Journey" mobile game, "Fifth Personality" and "Leading the Land". The performance of the new game is also quite impressive, with "Beyond the World" topping the iOS download chart in January and ranking third on the best-selling list in March and May. "All Star Street Ball Party" and "Peak Speed" have entered the Chinese Hong Kong, Macao, and Taiwan markets, topping download and best-selling charts in multiple regions.
With the reserve of new games, especially the launch of major games, institutional insiders believe that NetEase Games will have strong growth momentum in the future. Recently, at the NetEase Gaming 520 press conference, more than 10 new games, over 30 popular games/IPs, and platform products were released and updated. The first heavyweight open world martial arts game to debut, "The Sixteen Sounds of Yan Yun," announced that it will be officially released for public testing on July 26th. Another well-known IP, Eternal Realm, also announced the latest development progress and real machine demonstration of the mobile game "Eternal Realm.".
In the new product segment, there is also an international IP product worth paying attention to - "Marvel Ultimate Reversal". This 2022 overseas card "Dark Horse" has announced that it will be released domestically by NetEase. In addition to developing new games, more than 30 popular games in operation have also released new content for the second half of the year.
It is worth mentioning that in April this year, NetEase, Blizzard, and Microsoft jointly announced the resumption of cooperation, and Blizzard's domestic server is expected to return this summer. This move has attracted market attention, and institutional insiders believe that IP players such as Warcraft are expected to return, and future development cooperation for IP sequels is worth looking forward to. But currently, NetEase has not disclosed the latest progress on the return of Blizzard's national server.
In terms of other financial data, NetEase achieved a revenue of 26.9 billion yuan in the first quarter of 2024, a year-on-year increase of 7.2%; Under non GAAP accounting standards, the net profit attributable to the company's shareholders was 8.5 billion yuan, a year-on-year increase of 11.8%. Among them, Youdao's revenue was 1.4 billion yuan, a year-on-year increase of 19.7%; Cloud music revenue reached 2 billion yuan, a year-on-year increase of 3.6%; Innovation and other business revenue reached 2 billion yuan, a year-on-year increase of 6.1%.