As of December 14, 2023, NetEase's Hong Kong** value reached HK$530.6 billion, surpassing Meituan's market capitalization of HK$519.2 billion, and also surpassing JD.com to become China's fourth-largest internet company by market capitalization, behind Tencent, Pinduoduo and Alibaba.
On November 16, NetEase released its financial report for the third quarter of 2023. Among them, NetEase's net income in the third quarter was 27.3 billion yuan, a year-on-year increase of 116%；Non-GAAP net profit from continuing operations attributable to shareholders of the Company was RMB8.6 billion, up 15% year-on-year7%。
At the same time, the financial report mentioned that there will be personnel changes in NetEase's top management. Yang Zhaoxuan, the company's chief financial officer, has submitted his resignation to the board of directors due to personal reasons and will no longer hold this position on November 30, 2023. Until June 30, 2024, Yang will continue to serve as an advisor to the company to ensure a smooth transition for the company in the search for a successor.
The game business blossomed in many places.
NetEase performed well in the gaming sector in the third quarter. According to the financial report, in the third quarter, NetEase games and related value-added service revenue was 21.8 billion yuan, compared with 18.7 billion yuan in the same period last year, a year-on-year increase of 165%, thanks to the multi-point flowering of NetEase's game business.
In the third quarter, the mobile game "Against the Cold" performed outstandingly. On June 30, 2023, NetEase's mobile game "Against the Cold" was officially launched and was in public beta on all platforms. The mobile game is different from traditional MMO games. Most of the traditional MMO games belong to kryptonite games, which are typical of high-value pay-to-play games. Games take different ways to get players to spend. At the same time, it will also extend the player's character leveling time, causing the player to "liver" the game. However, "Against the Cold" has given up numerical payment, and players can play it even if they don't spend money, which has a strong sense of user experience. It can be said that "Against the Cold" has truly achieved "no liver, no krypton, no volume". With this feature, after the launch of the mobile game, "Against the Cold" has received high attention and recognition from players, and has achieved strong user growth. According to NetEase, after the launch of the mobile game "Against the Cold", the number of registered players exceeded 50 million in only 45 days of public beta.
Not only that, the mobile game "Against the Cold" also continues to launch a "game ** low price" ** war. The game is designed with a beautiful look to entice players to buy it at a bargain price of six yuan. It is reported that at present, the sales volume of the "six-yuan game" of the mobile game "Against the Cold" has exceeded 100 million. In traditional MMO games, exquisite fashion can be purchased for hundreds or even thousands of dollars. There is no doubt that this kind of beautifully designed and low-priced ** battle can not only help the mobile game "Against the Cold" gain a good user reputation, but also help it obtain strong business income and build a large-scale small-amount user payment ecosystem. At the same time, NetEase has innovated in other game tracks. On June 20, 2023, NetEase launched "Peak Speed", which is a racing mobile game that simulates real operations. It has attracted a large number of players with its realistic body design, highly realistic art style, and realistic racing experience, and has been widely praised. At present, "Peak Speed" is still at the top of the game's best-selling list.
And on August 23, 2023, the open beta of the game "All-Star Street Ball Party" will be launched. In the game, players will become a basketball coach and form a team to participate in various competitions. "All-Star Street Ball Party" is NetEase's first game that is not launched on Android channels, and its 1.5 billion yuan channel share is transferred to players, which has aroused heated discussions among players. This game creates a new and interesting gaming experience for players with its beautiful art design, gorgeous skill effects, and other features. According to reports, after the game "All-Star Street Ball Party" was launched, it won the first place in the iOS overall list, free list, and best-selling list many times.
In addition to the new games launched by NetEase, NetEase's classic games such as "Fantasy Journey to the West" and other popular games such as "Egg Boy Party" and "The Fifth Personality" have performed steadily and unabated. At the meeting, NetEase's management also disclosed the preparations and launch plans for a number of new games. The mobile games "Condor Shooting", "Sixteen Voices of Yanyun" and "Mission Zero" are currently in the final stage of preparation before launch. Among them, "Condor Shooting" and "Mission Zero" will be launched before the second quarter of next year at the latest.
Increase investment in key technologies such as AI.
According to the financial report, since 2023, NetEase has continued to increase key technologies such as AI large models, with a cumulative investment of more than 12 billion yuan in the first three quarters. In the third quarter, NetEase invested 4.3 billion yuan. During the quarter, the first AI vertical model in the fields of education and email was recorded, injecting impetus into the innovation and development of digital business and the digital transformation of the physical industry.
At the same time, NetEase's AI self-developed technology is also reflected in the game field. In the field of games, as the world's first open-world game with large-scale AI gameplay, the mobile game "Against the Cold" continues to innovate, pioneering AI custom voice and other gameplay, and the number of "AI teammates" playing with them has exceeded one billion. "Egg Boy Party" has also updated a variety of AI functions, which can help players change the color of the map with one click, generate actions, etc.;It has also launched functions such as multi-person co-construction of maps, further lowering the threshold for creation and improving the quality of creation. By the end of August, the number of maps in the game had exceeded 100 million. At the same time, NetEase technology has also contributed scientific and technological strength to the Hangzhou Asian Games, such as NetEase Intelligent Enterprise to provide intelligent real-time translation for players and guests from all over the world, with zero accidents throughout the processNetEase Media is the official online brand promotion service provider of Hangzhou ** Association, and uses AI technology to create creative columns such as "Hot AI Asian Games". It can be seen that NetEase uses AI to strongly activate user creativity and make breakthroughs in various entertainment scenarios.
As a large Internet company, NetEase attaches great importance to the establishment of a system for the protection of minors. On average, NetEase invests more than 100 million yuan per year in the protection of minors. It is understood that NetEase's core content products have all launched "youth mode" or related juvenile protection functions. Parents only need to bind their children's NetEase game account on the "NetEase Parental Care Platform"**, and they can query and manage the game duration and consumption with one click, and they can also set the account authority to prohibit games and recharge. The protection of minors has always been one of the most noteworthy issues in the Internet field. NetEase's huge investment in this area will not only enable it to implement measures to protect minors, but also establish a better image as a large company.
At the same time, in order to promote the solution of the industry problem of minors' "false real names", NetEase Games has upgraded the original face recognition verification function, through the SDK glare protection and the double verification of the server's 3D space-time and live body, to improve the accuracy of the AI face recognition algorithm, to solve the problem of minors using **, synthesizing** and other ways to bypass the verification mechanism, comprehensively protect the network security of minors, and build a solid protective barrier for minors.
NetEase Cloud** continues to promote the development of copyright and AI**.
According to the financial report, in the third quarter, NetEase Cloud's revenue was 197.3 billion yuan, down 16% year-on-year and slightly up 13%；Gross profit 53.7 billion yuan, a year-on-year increase of 608%, an increase of 21%；Gross margin was 272%, an increase of 13 percentage points year-on-year, a slight increase of 02 percentage points. NetEase said in the financial report that the quarter-on-quarter and year-on-year growth of cloud** gross profit was mainly due to the increase in membership subscription revenue and the continuous improvement of cost control.
According to reports, in the third quarter, NetEase has reached copyright cooperation with Bai Mifan, Li Yuchun, "Summer of the Band", etc., and many popular hits and bands have been launched in Yuncun. (g) The sales volume of i-dle's new ** "i feel" NetEase Cloud** exceeded 480,000 copies, and the total sales exceeded the 10 million mark, leading the 2023 annual list of the best-selling list. A huge number of quality** went online, which helped NetEase Cloud** win sales and copyrights. The radio drama "Sauvignon Blanc" has also gained the attention of a large number of users and ranked first on the NetEase Cloud ** overall list. NetEase Cloud** continues to broaden the sound consumption scenarios, meets the "audio" needs of different audiences, and prompts users to consume on the platform.
Not only that, NetEase Cloud** is also continuing to promote the development of AI**, launching the "private DJ" function. In terms of AI development opportunities, in 2018, NetEase Cloud Audio Lab invested in research on the combination of new technologies such as artificial intelligence to create the industry's first full-link AI production system. In August, Netease Cloud** and Xiaoice Company launched the national style-themed scenario program "Wind and Snow Qianqian" for the first time, and appeared on the first artificial intelligence (AI) evening "828·ai Night" hosted by People's Daily Online. The "Private DJ" function is the first **recommendation intelligent function, which shows the experience advantages of NetEase Cloud ** in personalized ** recommendations and improves the user experience.
NetEase Youdao launched the "Ziyue" education model.
On November 16, NetEase Youdao also released its financial report. According to the financial report, NetEase Youdao's net income in the third quarter reached 15400 million yuan, a year-on-year increase of 97%。Of this, 95.1 billion yuan, compared with 88.9 billion yuan, a year-on-year increase of 7%;Revenue from smart hardware was 25.2 billion yuan, up from 3.2 billion in the same period last year5.7 billion yuan, down 293%；*Marketing Services revenue was 33.6 billion yuan, compared with 15.8 billion yuan, an increase of 1135%。
Since the third quarter, NetEase Youdao has continued to promote technological innovation and use AI technology to support various services. In July this year, NetEase Youdao launched the first vertical model in the field of education in China, "Ziyue", and released six innovative applications based on this model - "LLM Translation", "Virtual Oral Language Coach", "AI Composition Guidance", "Grammar Concise", "AI Box" and "Document Q&A". At present, the "Ziyue" education model has officially passed the relevant filing of the "Interim Measures for the Management of Generative Artificial Intelligence Services", becoming the first batch of education models that have passed the filing. This means that the education model and its application products can be officially opened to the public.
Zhou Feng, CEO of Youdao, said, "AI continues to promote the development of our learning services, intelligent hardware and first-class marketing services, improving product quality and user satisfaction. In the early stage of the application of the education model, it has also received feedback from users. ”
Kejihui, a pioneer in financial and technological content, a senior editorial team, synchronizes with 30 online platforms. Zhang Zipeng ne w s m e d ia007).
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