Huaxia Times reporter Shi Feiyue reports from Beijing
Although Douyu achieved a turnaround from losses to profits in 2023 through cost reduction and efficiency improvement, the slowing growth of the game live streaming market, the negative impact of Douyu founder Chen Shaojie's arrest last year on the platform, and the loss of multiple major anchors due to these two factors have continued to cause Douyu to suffer losses this year. On September 12th, Douyu released its second quarter financial report, which showed that its main data were lower than the same period last year.
Fortunately, under the governance of the interim management committee, Douyu's business structure has been further optimized. In the second quarter, its revenue from innovative business, advertising, and other businesses was 1.8 times that of the same period last year, accounting for 23.4% of the total revenue. Industry insiders suggest that Douyu is still in a relatively stable position in the gaming live streaming industry and can continue to implement existing business adjustments. However, it is also possible to jump out of the gaming industry and try related businesses such as entertainment, education, and technology.
Revenue and profit decline year-on-year
According to the financial report, in the second quarter of 2024, the total revenue of Douyu platform was 1.032 billion yuan, with a gross profit of 84.2 million yuan and a gross profit margin of 8.2%; Recorded a net loss of 49.2 million yuan, with an adjusted net loss of 45.5 million yuan; The quarterly average MAU for mobile devices is 44.1 million, with 3.4 million paying users.
Compared with the same period last year, Douyu's various data have declined and turned from profit to loss. In the second quarter of last year, Douyu's total revenue was 1.392 billion yuan, with a gross profit of 189 million yuan and a corresponding gross profit margin of 13.6%; Net profit of 61.4 million yuan; The average MAU on mobile devices is 50.3 million, with 4 million paying users.
The decline in data, in the view of Zhang Xiaorong, the director of the Institute of Advanced Technology, is caused by multiple factors. "From the perspective of the overall market, the growth of the market has slowed down, and the internal volume of the industry has intensified, especially the rise of short video platforms and the intensified competition in the live broadcast industry. Douyu is facing fierce competition from Tiktok, Kwai and other platforms, and its market share has been squeezed."
The rise of the game live broadcast service on short video platforms such as Tiktok has a lot to do with its "wall breaking" behavior with Tencent, a big game player. Today, Tencent's three ace games have all achieved interoperability with Tiktok to varying degrees. On January 20, the "PEL Peace Elite Professional League" account announced that the "Peace Elite" E-sports event was officially launched in Tiktok; One day after the official announcement of "Peace Elite", "Glory of the King" also officially ushered in the full opening of Tiktok live broadcast; From February 6, the live broadcast of Tiktok of League of Heroes was also fully open.
In addition, Tiktok has a large number of users and a high degree of activity, which will inevitably affect live game platforms such as Douyu. According to QuestMobile, the average monthly active users of Tiktok reached 766 million in the first quarter of this year.
From the perspective of Douyu itself, its founder Chen Shaojie was arrested on suspicion of running a casino, and the impact on the company is still ongoing. Combined with the rise of the short video game industry, Douyu has lost several top anchors. The departure of these anchors not only reduces the platform's traffic and revenue, but also affects user stickiness and the platform's brand image, "Zhang Xiaorong told reporters from Huaxia Times.
In April of this year, some media reported that Chen Shaojie had been released on bail pending trial after the Spring Festival, but he may face a criminal judgment in the future. Five months have passed now, and there have been no other reports about Chen Shaojie. A few days after Chen Shaojie's arrest was announced last year, Douyu proposed a solution to this incident, which was for the board of directors to establish a temporary management committee to temporarily be responsible for the company's daily operations.
On September 13th, a reporter from Huaxia Times learned from Douyu that the company is still operated by the Temporary Management Committee.
In addition, Zhang Xiaorong stated that Douyu has made a series of adjustments to its content ecosystem, which may have affected user experience and revenue in the short term. Regarding this, Douyu mentioned in its financial report that due to the weak macroeconomic environment, Douyu has offered lower priced products and reduced promotional activities focused on acquiring paying users.
Nevertheless, Douyu still has confidence in the company's future development. Douyu stated that although its financial performance will face some pressure in the short term due to challenges in the macro environment and changes in the business environment, it will still have the ability to ensure the steady progress of its own business in the future by relying on its core competitive advantages, optimizing company resource allocation, deepening multi-party cooperation, and continuously investing in new businesses with growth potential.
Significant optimization of business structure
In fact, the slowdown in the growth of game live streaming business in recent years, as well as the occurrence of the Chen Shaojie incident last year, have destined Douyu to face "difficulties" in terms of performance in the short term.
However, under the governance of the temporary management committee, Douyu is also actively undergoing diversified transformation, that is, by flexibly adjusting its operational strategies, continuing to deepen game manufacturer services, and combining game version updates, new props, summer and holiday seasons to continuously try more diverse cooperative promotion methods, enhancing the company's commercialization capabilities.
In the second quarter of this year, Douyu's innovative business, advertising, and other business revenue reached 242 million yuan, which is 1.8 times higher than the same period last year. Its revenue contribution accounted for 23.4%, a significant increase from 9.6% in the same period of 2023.
Among them, game membership income based on the sale of game props is the main source of innovative revenue growth. Douyu stated that in the second quarter of this year, the platform continued to use mature community and commercial tools to increase business revenue by enriching game props categories, increasing platform rights and marketing frequency. For example, in the Heping Elite zone, based on rare props provided by game manufacturers and promotion inside and outside the platform, the promotion frequency of game membership services was increased, effectively improving business revenue. Douyu stated that the platform will promote relevant commercial models to more regions in the future.
In addition, in the second quarter of this year, Douyu further strengthened its cooperation with manufacturers, focusing on the launch of new games. The platform launched various live streaming incentives and special operation activities during the public testing and promotion period of multiple products such as "Juequ Zero", "Mingchao", "Jianwang 3 Boundless", and "DNF Mobile Game".
In addition to trying more business models, in the traditional game live streaming business, Douyu launched a summer anchor recruitment plan in June this year to address the phenomenon of anchors leaving. It invested millions of cash and millions of exposure resources, and broke the traditional anchor recruitment model of broadcasting specific game categories. It does not limit the broadcasting categories and provides new anchors with more choices of live content to attract more anchors to join.
Although this series of reforms has not yet been able to pull Douyu out of its performance difficulties, there have been some improvements compared to the first quarter of this year, such as narrowing losses and further optimizing business structure. In the first quarter of 2024, Douyu recorded a net loss of 88 million yuan, with an adjusted net loss of 85.7 million yuan; The advertising and other business revenue was 239 million yuan, accounting for 23% of the revenue contribution.
It should be noted that the reform measures of Douyu are mainly focused on game live streaming. Zhang Xiaorong suggested that in addition to these adjustment measures, Douyu can also expand non game live streaming content, such as pan entertainment, education, technology, etc., to attract more types of users, and use AI technology to optimize content creation and distribution, improve content production efficiency and personalized recommendation accuracy.