On February 29th, NetEase released its financial reports for the fourth quarter and full year of 2023. According to the financial report, NetEase's total revenue in 2023 was 103.5 billion yuan (RMB), an increase of 7.3% compared to 96.5 billion yuan in the same period last year; Under non GAAP accounting standards, the net profit attributable to the company's shareholders from continuing operations was 32.6 billion yuan, an increase of 43.0% from 22.8 billion yuan in the same period last year.
NetEase's revenue in the fourth quarter of 2023 was 27.1 billion yuan, an increase of 7.0% year-on-year and a decrease of 15.4% month on month; Under non GAAP accounting standards, the net profit attributable to the company's shareholders from continuing operations was 7.4 billion yuan, a year-on-year increase of 54.2% and a month on month decrease of 14.0%.
Games, Youdao, Cloud Music, and Innovation are NetEase's four main businesses. In the past year, NetEase Games had a total annual revenue of 81.6 billion yuan and a revenue of 20.9 billion yuan in the fourth quarter. NetEase Cloud Music further strengthened its membership commercialization, with an annual revenue of 7.9 billion yuan, achieving annual profit for the first time; In the fourth quarter, the revenue was 2 billion yuan, and the gross profit margin increased to 30.3%. NetEase Youdao released the "Confucius" Education Model 2.0, driving annual revenue to 5.4 billion yuan and quarterly revenue to 1.5 billion yuan. The annual revenue of innovation and other businesses was 8.6 billion yuan, with a revenue of 2.8 billion yuan in the fourth quarter.
NetEase CEO Ding Lei stated that the company's performance has grown healthily in 2023, with many business sectors developing well. NetEase will continue to provide innovative and high-quality products and services, continuously output high-quality content, enhance user experience, accelerate cross industry digital and real innovation integration, and promote industry progress through practical applications.
The game industry's first batch of integration into the "underage mode", leading party games
Starting from 2023, NetEase has achieved the top spot in five major gaming tracks, including casual parties, MMO, racing, basketball, and second tier women, through the implementation of AI (Artificial Intelligence) self-developed technology, innovative gameplay and content.
During the Spring Festival of the the Year of the Loong, the national original paradise game "Egg Boy Party" was joined by three "Spring Festival Galas", including the "CCTV 2024 Online Spring Festival Gala". With the advantages of 40 million active users, 500 million registered users and 100 million maps, it ranked first in party games. Peak Speed has performed well in the Chinese Hong Kong, Macau, and Taiwan markets, topping the iOS best-selling and download charts in its first week of launch in Taiwan. The All Star Street Ball Party became the first basketball mobile game to reach the top of the iOS best-selling chart. In addition, the February mobile game "Eternal Sorrow" was approved for release, and the game has achieved end-to-end graphics quality in low power consumption on mobile devices. It will be first tested on April 1st.
NetEase Games became one of the first game manufacturers to add a "minor mode" to their entire product line. After the implementation of the Regulations on the Protection of Minors on the Internet, all NetEase gaming products have been integrated into the "Minors Mode" on the basis of the anti addiction system, and 63 products have been deployed. In addition, NetEase has launched a special winter vacation protection program for minors for the fourth consecutive year. The "minors mode", which includes protection functions such as one click ban on playing, ban charging, and content blocking, has been used more than 3 million times. More than 10000 gray and black games involving adult account transactions have been taken down from third-party platforms, and 3.8 million abnormal real name registered accounts have been processed in the game.
A record high R&D investment of 16.5 billion yuan, AI technology empowers industries such as gaming and education
NetEase will increase its research and development efforts quarter by quarter in 2023, with an annual R&D investment of 16.5 billion yuan, reaching a new high in history. Self developed technologies such as AI big models have fully empowered core businesses.
As the first mainstream game to apply AI gameplay on a large scale, the mobile game "Against Water and Cold" is based on the underlying Fuxi AI model and pioneered the virtual newspaper system "Da Song Toutiao". The AI automatically generates over 300 million illustrated news stories based on player interests. Egg Party continues to upgrade its UGC (User Content Production) creation tool equipped with AI algorithms, lowering the threshold for map creation and helping players in the amusement park to exceed 100 million maps, with a maximum of over 120 million views per map.
NetEase Youdao has released the "Confucius" Education Big Model 2.0, launching multiple native applications of the big model, including the virtual human oral coach Hi Echo 2.0 and the AI tutoring teacher Xiao P. Youdao's online marketing service has seen a year-on-year increase of over 50% for five consecutive quarters, with a revenue increase of 97% in the fourth quarter of 2023. The NetEase Fuxi Intelligent Loader Platform, developed based on the NetEase Industrial Big Model, was selected as an excellent case of the 2023 Industrial Metaverse by the Industrial Culture Development Center of the Ministry of Industry and Information Technology at the end of last year.
In 2023, NetEase launched five anti fraud functions, including detection, early warning, blocking, reporting, and intelligent outbound calling, based on the industry's first AI underage protection patrol system. It also collaborated with authoritative anti fraud organizations to launch public welfare science popularization, covering over 20 million people on a monthly basis. At the same time, NetEase Games assisted local police in cracking down on the fraud industry chain, seized more than 10000 illegal online accounts, and banned 5394 off game live streaming rooms, short videos, and chat groups.