Huya and Douyu were exposed to layoffs, and the game live broadcast reduced costs and increased efficiency

Wen | Lin Xiaobai

Internet companies opened the "cost reduction and efficiency increase", after the Little Red Book, B station live broadcast, Zhihu video, Huya, Douyu has sent out layoff news.

According to Tech Planet news, recently, Huya's overall layoffs, the proportion of layoffs in the international business was as high as 70%, and the operation team of Nimo, a product of the sea, shrank greatly; the domestic business team laid off 20%, mainly concentrated in innovative departments such as "cloud games", and the layoffs were crisp and clean, and the morning notice was done in the afternoon. It also terminated many recent graduates. In this regard, Huya replied that it would not comment.

At the same time, Huya's "difficult brother and difficult brother" Douyu has recently opened a layoff action, of which Douyu Live has laid off 30% of the overall staff, the main layoff business is game business and live broadcast brokerage, the layoffs are concentrated in shanghai and Beijing teams, and the Wuhan headquarters is also involved.

On April 7 this year, Penguin Esports, Tencent's mobile e-sports content platform, announced its delisting announcement, announcing that it would terminate its operations across all channels at 23:59 on June 7, 2022. After Penguin E-sports voluntarily withdrew from the competition, the top three game live broadcasting platforms in China were finally left with only Douyu and Huya, which started early. However, life for the two families is not good now.

In 2021, Huya's profit will decrease and Douyu will lose money

Not long ago, Douyu and Huya submitted financial results for 2021, from the financial report, the financial performance of the two major game live broadcasting platforms for one year is not too ideal, Huya's profit in 2021 is reduced, the growth rate is slowing down, and Douyu recorded losses.

Huya's revenue increased in 2021, but its net profit declined. Huya's annual revenue in 2021 was RMB11.351 billion, compared to RMB10.914 billion in the same period of 2020; net profit attributable to Huya was RMB584 million, compared with RMB884 million for the same period in 2020, down 33.9% year-on-year.

Among them, the live broadcast business accounted for 89.74% of Huya's total revenue, and it is still the main source of revenue, specifically 2.613 billion yuan in 2021, compared with 2.815 billion yuan in the same period of 2020, a year-on-year decrease of 7.2%. Huya's advertising and other revenue was 196 million yuan, an increase of 11.6% compared with 176 million yuan in the same period of 2020, accounting for about 10.26% of the total revenue.

In addition, Huya's paying users have continued to decrease since 2020, with the total number of paying users of Huya Live in the fourth quarter being 5.6 million, compared to 6 million in the same period of 2020, down 6.67% year-on-year.

In terms of fighting fish, revenue declined in 2021, turning from profit to loss. In 2021, Douyu achieved revenue of 9.165 billion yuan, compared with 9.602 billion yuan in the same period of 2020, down 4.55% year-on-year; net loss was 620 million yuan, net profit for the same period of 2020 was 405 million yuan, Douyu turned from profit to loss in 2021; adjusted net loss was 401 million yuan, and adjusted net income was 542 million yuan in the same period of 2020.

Live broadcast revenue, which is also the main source of revenue, fell by 3% year-on-year to 8.586 billion yuan, and accounted for 94.8% of the total revenue, accounting for a further increase. There was also a downward trend in advertising and other business revenue. Douyu's advertising and other revenue in 2021 was 570 million yuan, compared with 750 million yuan in the same period of 2020, down 24% year-on-year.

Douyu also said in the financial report that the main reason for the decline in Douyu's annual revenue is the year-on-year decline in live broadcast revenue and advertising revenue.

Like the difficulties encountered by Huya, Douyu also suffered from the dilemma of reducing the number of paid users in 2021, with the average number of paying users in the quarter of 2021 being 7.3 million, compared with 7.6 million in the same period of 2020, down 300,000 year-on-year.

The industry environment is not optimistic

Huya and Douyu are two of China's largest live game streaming and operation platforms, with a market share of more than 70% in game live streaming. Among them, Huya Market accounts for 40%, and Douyu exceeds 30%. Huya and Douyu have been listed on the US stock market.

Both companies have Tencent behind them. Tencent Holdings, through its subsidiaries, owns a 36.9% stake in Huya, accounting for 50.9% of Huya's total voting rights. At the same time, Tencent is also the largest shareholder of Douyu, holding about 38.0% of the equity and voting rights of Douyu.

Considering that Huya and Douyu have been fighting each other in the field of game live broadcasting, and the homogenization competition is intensifying, Tencent, as the majority shareholder, has always hoped that the two companies will merge.

On October 12, 2020, Huya and Douyu jointly announced that they had officially accepted the merger invitation proposed by the major shareholder Tencent for a strategic merger. After a year, the dust of the merger of tiger tooth fighting fish fell to the ground. On July 10, the State Administration for Market Regulation announced that the Tencent-led Huya Douyu merger case was banned on anti-monopoly grounds.

After the merger of tiger tooth fighting fish was stopped, the fighting fish has been in the water. First, the stock price fell all the way, and the market value shrank by more than 90% compared with the high point in 2021; the co-founder, director and co-CEO of Zhang Wenming Company left; at the beginning of this year, there was news that Tencent intended to privatize Douyu.

Although Huya won the 5-year LPL (League of Legends Professional League) exclusive broadcast rights for 2 billion, the high copyright fee also broke the record price of copyright events. In addition, it has signed Chinese exclusive live event broadcasting copyright agreement with ESL. The rapid growth of copyright fees has become a greater burden on platforms to improve operational efficiency.

Since 2020, the number of paying users of Huya and Douyu has decreased to varying degrees.

Not only that, but the big bad situation of the whole game live broadcast is not optimistic. Starting from 2019, the growth of the user scale of the entire game live broadcasting industry began to slow down, and the number of game anchors and the number of bullet strips sent by users declined. According to the "2021 Game Live Broadcasting Industry Insight Report" released by Xiaohulu Big Data Research Institute, in 2021, in the case of a significant contraction in the large-market data indicators of China's game live broadcasting industry, only the live broadcast time increased by 0.35% year-on-year. For example, the number of game streamers dropped from 13.958 million to 11.974 million; the number of bullet strips sent fell from 31.056 billion to 22.723 billion; the contribution index dropped from 11.318 billion to 10.267 billion; and the number of contributors fell from 405 million to 374 million.

At the same time, crossover players such as Kuaishou, Douyin, and Station B are working on game live broadcast tracks, eating away at the market share of Douyu and Huya.

Since the first investment in 2013, Station B has invested in a total of 48 game companies and 49 animation-related companies, covering almost the upstream and downstream industrial chains of ACG (animation, comics, games). Station B not only set up an e-sports club and launched a series of game creator support programs, but also spent 800 million yuan to seize the exclusive broadcast rights of the world's e-sports event, the largest traffic of the global e-sports competition- the League of Legends S Tournament. In addition, the per capita gift value of Station B reached 50.89 yuan, far exceeding other live broadcast platforms.

Douyin and other headline products also bet on game content without stinginess, there is news that from the beginning of 2018, today's headlines intend to invest in and acquire game studios, and by 2020, the game team under the headline system has expanded to more than 1,000 people. Game content that complements game production is also highly valued by products such as Douyin and Watermelon Video.

Kuaishou has been quietly laying out the game live broadcast field since 2016, successively winning the "Glory of kings" professional event live broadcast copyright, the 2019 "League of Legends" global finals live broadcast copyright, the 2020 KPL event copyright, etc. Data from the 2020 ChinaJoy Global E-sports Conference show that as of the end of May 2020, the monthly active users of Kuaishou Game Live have exceeded 220 million, and the monthly active users of game short videos have exceeded 300 million.

Game live broadcasting is directly linked to the rise and fall of the game industry, the game version number is suspended for 263 days, many game companies lay off and shut down, and the head game products have also been affected by the "new regulations on the prevention of addiction of minors", the number of users has decreased, and the game live broadcast industry has been under pressure.

Mergers are stopped, growth has peaked, and industry competition is becoming more and more fierce, for Douyu and Huya, choosing layoffs is a "must" for survival.

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