On March 25, Zulong Entertainment released its 2021 annual financial report. According to the financial report, the revenue in 2021 was 920 million, down 23.8% year-on-year, and the loss during the year was 300 million, narrowing by 60% year-on-year.
Among them, the revenue of the mainland market was 380 million yuan, a year-on-year decrease of 8.4%, and the revenue of overseas markets was 530 million yuan, a year-on-year decrease of 32.1%.
By 2021, Zulong has launched a total of 16 game products, and the cumulative registered users of 11 games in operation have reached 130 million. Among them, 3 games have a cumulative global turnover of more than 3 billion yuan, 6 games have a global cumulative turnover of more than 1 billion yuan, and 7 games have a cumulative turnover of more than 100 million yuan in the first month after their release.
Among them, the most eye-catching "Dragon Fantasy" has a cumulative flow of more than 3.8 billion, "Under the Hongtu" has a cumulative flow of more than 1 billion, and the long-term performance of many classic games in operation, such as "Dream Immortal", "King of Kings 3D", "Royal Sword Love", "Six Dragons Battle" and so on, is relatively stable, contributing to Zulong's continuous revenue.
In addition, the financial report also shows that Zulong will launch 11 games in the next three years, and Zulong has great confidence in the market performance of "Noah's Heart", avatar mobile game "Avatar: Reckoning", "In the Name of Shining" and project code name: Sigmar, which will be launched in 2022.
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Annual revenue of 920 million, a decrease of 23.8% year-on-year
Among them, the revenue of Zulong's development and licensing business was 470 million yuan, a decrease of 20.9% year-on-year, while the revenue of comprehensive game distribution and operation was 450 million yuan, a year-on-year decrease of 26.7%.
Regarding the decrease in revenue, Zu Long explained that the two games "Noah's Heart" and the project "Codename: Sigmar" invested additional R&D time and resources to optimize, so the two new games were delayed and failed to be released as scheduled in 2021, and the "Dream New Land" released at the beginning of the year also performed less than expected.
From the perspective of revenue structure, Zulong's revenue in the mainland market in 2021 was 380 million yuan, a year-on-year decrease of 8.4%, and the overseas market revenue was 530 million yuan, a year-on-year decrease of 32.1%.
At the same time, Zulong is also increasing research and development and marketing. R&D expenditure increased by 30.6% year-on-year to 700 million, and marketing increased by 53.5% year-on-year to 250 million. The increase was mainly due to promotional and advertising expenditure and employee benefit expenditure. Zulong will successively issue SLG products in many countries and regions in the middle of 2021, and 2021 will be the main investment period and growth period of products. At the same time, Zulong also set up a subsidiary company in Guangzhou to actively expand overseas distribution channels.
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16 mobile games, with a total of more than 130 million users
As of December 31, 2021, Zulong has launched 16 boutique mobile games in more than 170 regional markets (such as China, Hong Kong, Macao and Taiwan, Southeast Asia, South Korea, Japan, Europe and the Americas), and currently has more than 130 million users worldwide in operation of 11 games.
Among them, 3 games have a cumulative global turnover of more than 3 billion yuan, 6 games have a global cumulative turnover of more than 1 billion yuan, and 7 games have a cumulative turnover of more than 100 million yuan in the first month after their release.
Dragon Fantasy is the first 3D next-generation MMORPG mobile game built with Unreal Engine 4 in China. It has been online for about a year and a half in Europe, the United States and Japan, and through continuous version updates, effective market launches, and linkage activities with the internationally renowned IP "EVA", the game has performed stably in the long run. As of December 31, 2021, the game has accumulated more than 3.8 billion yuan and has nearly 40 million registered users worldwide.
("Dragon Fantasy" Daily Service Ranking in the past year)
As the first SLG mobile game created by Unreal Engine 4, "Under the Red Map" has performed steadily for a long time since the launch of Chinese mainland. The game will be launched in 2021 in Japan, Southeast Asia, China, Hong Kong, Macao and Taiwan, Europe and the United States. On March 31, 2021, the game was released independently in Japan, won the iOS and Google recommendation positions, and reached the top 5 of the iOS free list in the first week of launch, and then launched on April 14 in Hong Kong, Macao and Taiwan, China, and topped the iOS free list on the first day. In October and November 2021, the game was independently released in Europe, the United States and Vietnam, and was recommended by Google many times. On January 20, 2022, ZuLong released the game in South Korea and won the 4th place in the Google Free List within 10 days of its launch.
By the end of 2021, the cumulative turnover of "Under the Hongtu" has exceeded 1 billion yuan, and the cumulative registered users have exceeded 6.2 million.
("Under the Big Picture" ranking in the past year)
Zulong released a new game, Dream NewLand, in January 2021, a turn-based MMORPG mobile game developed by Unreal Engine 4. The game topped the iOS Free List on its first day Chinese mainland launch.
In addition to the above games, the long-term performance of many classic games in operation, such as "Dream Immortal", "King of Kings 3D", "Royal Sword Love", "Battle of the Six Dragons", etc., is relatively stable, and will continue to contribute revenue to Zulong in 2021.
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There will be 11 games launched in the next three years
According to the financial report, in 2022, Zulong expects to have a good performance in the upcoming "Heart of Noah", the Avatar mobile game "Avatar: Reckoning", "In the Name of Shining" and the project code: Sigmar.
To create a diverse portfolio of different genres and diverse games, Zulong expects to launch 11 games around the world between 2022 and 2024, including MMO, SLG, female direction, shooting, strategy cards and other types of game products.
"Noah's Heart" is the core product of Zulong in the MMORPG circuit in 2022. Based on the immersive planet created by Unreal Engine 4, this adventure mobile game uses the power and expressiveness of Unreal Engine technology to create a seamless spherical continuous map for players. And the game breaks through the class restrictions of traditional MMORPG, providing players with a more open and free play experience.
The game completed a total of 3 closed tests in 2021 and 2 paid tests in early 2022. Currently, the game is being further tuned and is expected to be officially released in 2022.
Avatar: Reckoning is an innovative product that combines MMORPG and shooting, and the release of this product also represents that Zulong has stepped into the track of multiplayer online shooters. The absolute advantages of the world's top IP "Avatar", Zulong with top R&D strength and Top Distribution Capability of Tencent, IP-R&D-distribution will be verified on this product.
"In the Name of Shining" is a female mobile game, the game covers a wealth of gameplay such as dressup, makeup, face shape customization, plot deduction, home construction, etc., aiming to create a UGC platform for ultra-high-quality female image creation, which is Zulong's first attempt in the female category.
The game has gained a high degree of attention in the market since its official announcement, with more than 1 million appointments on TapTap. As of the earnings announcement date, the number of bookings for the game on TapTap has exceeded 1.3 million. The game is scheduled to be released in several countries and regions in 2022.
Project codename: Sigmar is the second SLG mobile game launched after "Under the Big Picture" for global distribution. The game is derived from the original IP of Western magic themes, and adopts American cartoon style, including a combination of simulated management, large sandbox free march and RTS battle and other settings. The game is scheduled to be tested overseas in 2022, Zulong will adopt the method of first overseas and then domestic self-publishing, and various pre-announcement marketing and marketing activities are underway.
"Three Kingdoms" is an SLG mobile game based on the three kingdoms created by quoting well-known IP, and is currently in the game development stage.
Project Codename: IM is a national style fantasy strategy card game created by Unreal Engine 4.
Project Codename: SE is a Western-style strategy card + mobile game created by Unreal Engine 4.
Project Codename: Rebirth is an open-world role-play+ multi-platform game product created by Unreal Engine 5.
Project Codename: Tinder is a futuristic sci-fi-inspired, next-gen graphics game created by Unreal Engine 5 in the open-world survival-building genre.
With the expansion of product types from MMORPG to multiple categories and rich and diverse styles such as SLG, feminine and strategic cards, and the continuous improvement of the organic model of "R&D integration", it is expected that the life cycle of Zulong Games will be further extended, which will make a more stable and sustained contribution to revenue.
In terms of talent layout, in 2021, Zulong will add 158 new R&D personnel and 86 new issuance and operation personnel, and the total number of people will increase from 1200 in 2020 to 1500, of which R&D center personnel account for about 82%, and distribution and operation center personnel account for about 12%.
In 2021, Zulong set up a new subsidiary in Guangzhou, and is committed to actively expanding overseas distribution channels. As of the date of the financial report announcement, Zulong's industry talents have a layout in Beijing, Shanghai, Guangzhou, Chengdu and Changchun, forming an organic model of "research and transportation integration" with Beijing as the center, gradually expanding to the more developed areas of the game industry in the country, continuously absorbing high-end industry talents with points and areas, and gradually improving the "research and transportation integration".
In terms of the strategic layout of globalization, Zulong has always accelerated the pace of "going out". Chinese mainland the tightening of supervision of the game industry, the increasingly fierce competition in the industry, the "boutique" route with content as the king has become a development trend, exploring the "multi-category" track to meet the differentiated needs of users, and accelerating the pace of "going out" to expand the "global" layout has become the key to success.
In recent years, Zulong has had a strong advantage in the Asian markets such as Hong Kong, Macao, Taiwan and Southeast Asia, among which the markets in Japan and South Korea have made strong expansion, and in the European and American markets of high-paying users, it has also achieved more eye-catching results.
In terms of IP reserves, Zulong already has a number of global head and even top authorized IP, including Avatar, Dragon Clan (series of novels), Three Kingdoms Heroes and so on. At the same time, Zulong also has a wealth of original IP accumulation, including "Six Dragons Battle" and "Royal Sword Love". Zulong's top IP products cooperated with internationally renowned manufacturers have enhanced Zulong's influence in the world, and the release of the Avatar mobile game "Avatar: Reckoning" project represents the recognition and confidence of the world's top manufacturers in Zulong's research and development strength, which will also open more opportunities for global quality cooperation.