Chinese tech giant NetDragon generated 3.7 billion yuan ($508.9 million) in the first half of 2023, representing a 13% year-on-year decrease, according to the company’s latest financial report.
Despite the decrease, gaming proved to be a particular strong point for the company, generating 1.920 billion yuan ($261.3 million), representing 58% of the total and an 8% increase from the same period in 2022 - a new record for the company. The company’s gaming interest also saw a 9% increase in core segmental profit, which stood at 1.1 billion yuan ($151.3 million).
"As China entered into a new post-pandemic era, we were able to capitalise on the domestic economic recovery as our gaming business resumed its growth trajectory in the first half of 2023, achieving revenue of RMB1.9 billion, an 8% increase YoY,” said NetDragon chairman Dr. Dejian Liu.
“We remained focused on executing our multi-pronged strategy of driving consistent revenue growth of our existing flagship games, continually investing in R&D to expand our pipeline of new games, as well as driving innovation with new technologies. As a result, our revenue growth for the period significantly exceeded the market growth again both in the PC and mobile segments. This is a testament to not just the strength of our IPs, but more importantly, the deep capabilities of our team."
Gaming leads the way
The gaming segment’s gross profit stood at 1.858 billion yuan ($258.6 million), at a gross margin of 97%. In contrast, the company’s educational segment saw a 249 million yuan loss in gross profit ($34.3 million) at a gross margin of 24%.
While the company’s gaming segment saw increases in revenue, it also recorded increases in operational costs. Research and development costs rose 16% year-on-year to 411 million yuan ($56.5 million), while administrative costs increased 3% to 156 million yuan ($21.5 million). However, there was a slight decrease in selling and marketing costs, which fell 1% to 187 million yuan ($25.7 million).
In April, NetDragon announced its intention to spin off its educational business, merging it with Gravitas Education Holdings.
