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Text |Radar Finance, Author |Longsail, edDeep.On December 22, NetEase's share price fell sharply, once falling by 2824%, and the decline is still more than 25% as of press time.
On the news side, the National Press and Publication Administration issued the "Measures for the Administration of Online Games (Draft for Solicitation of Comments)", mentioning that online games must not set inducing rewards such as daily login, first recharge, and continuous recharge, and all online games must set user recharge limits.
The Draft for Comments also mentions that online game publishing business entities shall not provide or condone the trading of virtual props in the form of speculation, auctions, etc. For users' irrational consumption behaviors, pop-up warnings should be carried out. In addition, when providing random selection services, online game publishing business units should make reasonable settings for the number and probability of drawing, and must not induce online game users to spend excessively.
As of press time, Tencent Holdings fell nearly 15%, and Bilibili (09626.).HK) fell more than 11%, and Kuaishou (01024HK) fell nearly 9%, Meituan-W (03690.HK), Alibaba-SW (09988HK) followed suit.
In terms of A-shares, media stocks and game stocks fell at the opening in the afternoon, Sanqi Mutual Entertainment, Mingchen Health, Yao Ji Technology, Gigabit and other stocks fell to the limit, and Zhangqu Technology and Baotong Technology fell by more than 10%.
Radar Finance noticed that the reason why NetEase fell significantly was mainly because of the relatively high proportion of games in revenue. Radar Finance understands that the current revenue of NetEase can be divided into four main sectors, which are games and related value-added services, Youdao, cloud**, innovation and other businesses. However, judging from the proportion of each business to total revenue, NetEase has the problem of "bias".
In the third quarter of this year, games and related value-added services contributed 21.8 billion yuan to NetEase's net income, contributing nearly 80% of NetEase's total net income in the quarter. In the same period, Youdao, Yun**, Innovation and other businesses won NetEase's net income of 1.5 billion yuan, 2 billion yuan and 2 billion yuan respectively, but the total revenue of the aforementioned businesses accounted for only about 20% of NetEase's total net income in the same period.
In fact, NetEase is indeed qualified to be among the first-tier game operators in China, and popular games such as "Onmyoji", "The Fifth Personality", and "Fantasy Journey to the West" are all created by NetEase. In the latest three-quarter report, NetEase also disclosed the latest developments of many of its games.
For example, the mobile game "Against the Cold" achieved strong revenue and user growth, with more than 50 million registered playersNetEase's first self-developed basketball game, All-Star Street Ball Party, topped the iOS best-selling list in China at the end of OctoberAt the same time, NetEase's classic flagship game products such as the "Fantasy Journey to the West" series are still popular among players, and other popular games such as "Egg Boy Party", "The Fifth Personality" and "Naraka: Infinite" are still popular.
Although NetEase has successively won a number of popular games, the strength of many players in the same game track as NetEase should not be underestimated. According to the November 2023 global revenue ranking list of Chinese mobile game publishers released by Sensor Tower, a total of 37 Chinese manufacturers were listed in the top 100 of the global mobile game publisher revenue list this month, and the aforementioned manufacturers attracted a total of 18US$700 million, accounting for 383%。
Among them, NetEase ranks second on the list, and in front of it is NetEase's old rival Tencent, which has long occupied the position of the industry leader with national games such as "Glory of Kings", "Peace Elite", "League of Legends Mobile Game", and "Battle of the Golden Shovel".
It is worth noting that Byte has contracted greatly in the gaming field this year.
On November 27, after the news of layoffs fermented, ByteDance confirmed the news that its game business will undergo a large-scale business contraction. As soon as the news came out, the HRs of major game manufacturers went out one after another and staged a big drama of "fishing for people".
According to the statement given by Sina Technology, Byte's large-scale abandonment of the game business has been repeatedly discussed by Yan Zhi, the head of the business, and Liang Rubo, CEO of ByteDance. Liang Rubo believes that although the game business has made certain achievements, in the past few years, Byte Games has pursued "big and comprehensive", the project is not focused, and the resources are scattered, so it should invest its energy and resources in more basic, more innovative and more imaginative projects.
Although ByteDance has spent a lot of money and recruited talents for many years for the layout of games, ByteDance seems to have responded to an evaluation from the outside world - "there is no gene to make games". Since its inception, Lightyear has brought a number of games to market, but most of them have received mediocre or short-lived responses. This year's "Crystal Nucleus" and "Planet: Reboot", which are vigorously promoted by Chaoxi Lightyear, have achieved small results, but it remains to be tested whether the brilliant performance can be sustained. Compared with its opponents, ByteDance has never been able to come up with national-level game products of the same size as "Honor of Kings", "Peace Elite", and "Genshin Impact".
Some market participants believe that Byte's contraction game has stepped on the pulse of policy in advance.