Netease reported 25.6% YoY growth in total net revenues in Q4 2020 and the education sector grew by 169.7%.
Netease expanded user base and diversified portfolio with new games launched in the Chinese market in Q4 2020 including:
- Revelation mobile game, which was released in January 2021 and topped China’s iOS download chart soon after its launch, capturing wide interest from players.
- Introduced new titles including For All Time, Unknown Future, Akasha Book, and Yu-Gi-Oh! Duel Links.
It continued the popularity of a number of mobile titles that climbed China’s iOS top grossing chart in the past few months including Fantasy Westward Journey and Westward Journey Online mobile games, Invincible and Life-After.
It deepened NetEase Games’ international reach with Knives Out leading Japan’s iOS top grossing chart several times in the fourth quarter. At the beginning of 2021, Netease launched Revelation mobile game.
The advanced exciting game pipeline, including Elysium of Legends, Infinite Lagrange, Harry Potter: Magic Awakened, The Lord of the Rings: Rise to War, Nightmare Breaker, Ghost World Chronicle, Diablo® Immortal™, and Pokémon Quest.
Netease continued strong growth from Youdao’s learning services and learning products for the fourth quarter of 2020, with net revenues up 198.8% and 253.8% year-over-year, respectively and positive net operating cash flow of approximately RMB129.0 million (US$19.8 million).
Netease Financial Highlights
Netease’s net revenues in Q4 2020 reached RMB19.8 billion (US$3.0 billion), an increase of 25.6% compared with the fourth quarter of 2019.
- Online game services net revenues were RMB13.4 billion (US$2.1 billion), an increase of 15.5% compared with the fourth quarter of 2019.
- Youdao net revenues were RMB1.1 billion (US$169.6 million), an increase of 169.7% compared with the fourth quarter of 2019.
- Innovative businesses and others net revenues were RMB5.3 billion (US$805.3 million), an increase of 41.3% compared with the fourth quarter of 2019.
Net revenues for the fiscal year 2020 were RMB73,667.1 million (US$11,290.0 million), compared to RMB59,241.1 million for the fiscal year 2019.
Gross profit was RMB9.9 billion (US$1.5 billion), an increase of 20.9% compared with the fourth quarter of 2019.
Total operating expenses were RMB6.9 billion (US$1.1 billion) in Q4, an increase of 32.1% compared with the fourth quarter of 2019.
Net income from continuing operations attributable to the company’s shareholders was RMB975.7 million (US$149.5 million) in Q4, which includes net exchange losses of RMB1.8 billion (US$276.2 million) and net investment loss of RMB271.9 million (US$41.7 million).
Non-GAAP net income from continuing operations attributable to the Company’s shareholders was RMB1.6 billion (US$244.9 million).
Basic net income from continuing operations was US$0.04 per share (US$0.22 per ADS). Non-GAAP basic net income from continuing operations was US$0.07 per share (US$0.36 per ADS).
Chinese independent musicians on NetEase Cloud Music doubled in 2020
NetEase Cloud Music announced its new “Music Talent” initiative on 17 December 2020 to leverage its competitive edge as a community to connect, inspire and engage quality content creators to cater to the country’s booming music industry.
Music Talent is a new concept incubated and developed by NetEase Cloud Music. With this new initiative, NetEase Cloud Music aims to support and grow the Music Talents on the platform who create derivative music content, such as music videos, radio podcasts, playlists, and other forms of mediums to broadcast and distribute music.
The initiative aims to help more everyday artists to earn an annual income of over RMB 1 million or more, and facilitate the development of music multi-channel network (MCN) companies.
This initiative also demonstrates NetEase Cloud Music’s ongoing emphasis on content creation, especially the exploration of diverse forms of high-quality and high-value content generation.
Since 2016, NetEase Cloud Music has focused deeply on supporting the development of original music and fostering creativity. The platform is home to over 200,000 Chinese independent musicians as of October 2020, a 100% year-over-year growth.
As part of the initiative, NetEase Cloud Music will provide platform-certified talent with a wide range of support, such as traffic referrals and revenue incentives, among others.
Support may also include helping talent diversify their income sources through incentives and business cooperation, and providing professional guidance on content creation.
NetEase Cloud Music has also harnessed the unique advantages of its community to attract a large number of young users, with over 90% of its users being under 29 years old.
These users are keen to create and share high-quality music in a variety of forms and have a willingness to pay for such content.
Additionally, with an established user-generated content (UGC) ecosystem, NetEase Cloud Music is committed to providing its Music Talent and independent musicians with all-around support and ideal growing conditions.
Check out Tencent’s performance here.