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NetEase profits tumble 20% in Q1 as Onmyoji and New Ghost lose traction

Battle royale hits Knives Out and Terminator 2: Judgement Day offset lost revenue

NetEase profits tumble 20% in Q1 as Onmyoji and New Ghost lose traction

NetEase’s gross profits tumbled by 20 per cent $949 million year-on-year for the three months ending March 31st 2018.

The Chinese publisher attributed decreased revenue from mobile games such as Onmyoji and New Ghost as the main reason for the drop.

Battle royale boost

It claimed however that increased revenue from battle royale hit Knives Out and new release Chu Liu Xiang helped offset the losses.

Indeed NetEase’s string of battle royale games such as Knives Out and Rules of Survival, as well as Terminator 2: Judgement Day, have proven lucrative ventures for the publisher.

Revenues for NetEase’s online games services arm, which includes mobile, also fell by 18.4 per cent to $1.4 billion.

Overall revenue from NetEase came in at $2.3 billion for the quarter, up 3.9 per cent.

“We continue to dominate China's MMORPG market with our new chart-topping title, Chu Liu Xiang, which modernised MMOPRG gameplay," said NetEase CEO William Ding.

"Our strategy to introduce games in non-MMORPG genres is also beginning to bear fruit. Monetisation for Knives Out and Terminator 2 is ramping up smoothly, and Identity V, our very first ABA game, attracted a huge fan base immediately following its launch in April.

"We are committed to executing on our game diversification strategy, and we are becoming more adept at reaching non-MMORPG users. As we work to expand our award-winning portfolio of online games, we expect our marketing costs will normalise going forward, compared with our marketing expenses in the first quarter of 2018.”


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Craig Chapple is a freelance analyst, consultant and writer with specialist knowledge of the games industry. He has previously served as Senior Editor at PocketGamer.biz, as well as holding roles at Sensor Tower, Nintendo and Develop.