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NetEase revenue rose 4% year-on-year in Q4 2022

The gaming giant’s latest financial report highlights a year of growth
NetEase revenue rose 4% year-on-year in Q4 2022

NetEase saw a 4% increase in net revenue in Q4 2022 compared to the same period in 2021, rising to 25.4 billion yuan ($3.7 billion).

The company’s latest financial report shows that the majority of the company’s revenue over the period came from games and related value-added services, which stood at 19.1 billion yuan($2.8 billion). This represents a 1.6% year-on-year increase.

Gross profit in the quarter rose 2.5% year-on-year, reaching 13.2 billion yuan ($1.9 billion) while operating expenses increased 6% to 8.8 billion yuan ($1.3 billion). Gross profit margin for games and value-added services for the quarter was 59.1%, compared to 65% in Q3 and 60.9% in Q4 2021.

"We experienced solid growth in 2022. Primarily as a result of the ongoing popularity of our leading games and the expansion of our range of products and services, we ended the year with total net revenues reaching 25.4 yuanbillion in the fourth quarter," said NetEase CEO and director William Ding. "Focusing on our flagship titles and new games alike, in 2022 we brought more players into the fold with our diverse and growing game content. For example, Eggy Party represents a significant breakthrough for us in the casual game arena. The new addition further enlarges and diversifies our user base, augmenting our robust portfolio of games. We are very excited to introduce more new games to broader demographics, which we believe will pave the way for our solid future growth."

A successful year

Net revenue for the 2022 fiscal year stood at 96,495.8 million yuan ($13,990.6 million), representing a 10% rise from 87,606 million yuan ($12,698.4 million) in 2021.

Games and related value-added services once again proved to be the strongest performing branch for the company, generating net revenue of 74,556.5 million yuan ($10,811.1 million) throughout the year, compared to 67,819.3 million yuan ($9,830.3 million) in 2021, representing a 9% increase.

Gross profit for the year stood at 52,766.1 million yuan ($7,650.4 million), compared to 46,970.8 million yuan ($6,808.3 million) in 2021, an year-on-year increase of 12%.

In contrast, net revenues for the company’s search engine, Youdao, fell 6% from 5,354.4 million yuan ($776.1 million) in 2021 to 5,013.2 million yuan ($726.8 million) in 2022.

Overall, NetEase emerged from 2022 in an advantageous position, having managed to avoid the industry-wide trend of decline following the Covid boom. This is especially notable given that the company’s home country, China, imposed a number of strict regulations on the gaming industry in 2022, leading to game sales falling 10.33%. This marred the release of one of the year’s biggest releases, Diablo Immortal, which NetEase co-developed. The game’s launch was delayed more than a month in the country, but Its eventual release proved to be a massive success, with China leading the way as the game generated $97 million in revenue in August 2022.

We listed NetEase as the top mobile game maker of 2022.