Source of this article: Time Weekly Author: Li Jing
On the evening of April 29, the Youzu Network (002174. SZ) released its 2021 annual report.
According to the annual report, Youzu's operating income was 3.204 billion yuan, and the net profit attributable to the shareholders of the parent company was turned into a profit of 168 million yuan, an increase of 356 million yuan over last year. At the same time, the company's capital structure continued to optimize, as of the end of the reporting period, the asset-liability ratio was 26.09%, down 15.03 percentage points year-on-year, and bank debt fell by 1.53 billion yuan.
In 2021, Youzu has experienced pressure and challenges, making steady progress in the midst of change. Not only the main business and system structure have been adjusted successively, but also a new strategic direction has been clarified, and a series of innovative measures have allowed the outside world to see the resilience of the youzu.
On the one hand, under the focus strategy, Youzu "focuses on the main business, the main track and the main project, and tilts the internal resources to game research and development." On the other hand, based on the advantage genes in the card track and facing the future, youzu Network has clarified the new strategic direction of "global card +". In order to promote the substantive implementation of the focus strategy and the new strategy, Youzu has also carried out incentives and organizational changes, such as completing the comprehensive upgrading of the R&D and distribution architecture, and releasing a new incentive system of "20+X".
In addition, after more than 8 months, the first batch of domestic game version numbers in 2022 were finally issued. On the evening of April 11, the State Press and Publication Administration released the "April 2022 Domestic Online Game Approval Information", in which Youzu's "Chronicles of the Three Kingdoms: Pocket Battle" was listed.
Affected by this news, the opening of the market on the morning of April 12, the stock price of Youzu Network rose and fell.
A new transformation in all directions
In 2021, Youzu completed the voyage from "focus and stability" to "change and development".
In the first half of the year, in order to be able to move forward better, the Youzu made fine adjustments internally. Youzu upgraded the five major studios of Youth Studio, War Studio, Qianlong Studio, Baichuan Studio and Inigami Studio to first-level departments, so that they have more independent operation and decision-making power. At the same time, the Innovation Institute was established, which is responsible for technological breakthroughs, artistic exploration, and innovation category extension. Youzu also made it clear that no less than 10% of the gross investment is used every year in the research and development and investment of next-generation technology products, innovative projects and products.
In order to reward value creators with value, Youzu has also implemented a "20+X" incentive policy. "20" means a commitment to give not less than 20% of the operating profit to the business team. "X" means that Youzu is willing to share the company's growth benefits with the backbone of the business and high-potential employees.
In the first half of the year, the "foundation" was laid, and in the second half of the year, the youzu continued to carry out drastic reforms, and made steady strides in effective measures.
In the third quarter of 2021, Youzu CEO Chen Fang clarified the new strategy of "Global Card +" in the "Letter to the Highest Priority Investors (All Employees)". The existing offering structure has also been adapted to serve a new strategy.
It is understood that "globalization" has always been the strategic direction that the nomads have long adhered to. The "card +" has two meanings: on the one hand, the evolution of cards, that is, continuous optimization and improvement in terms of gameplay and technology; on the other hand, the integration of cards, the core underlying concepts such as card play, design, fun and so on are combined with other types of products for integration and innovation.
In order to further deepen Youzu's "Global Card +" strategy, Youzu officially established the "Global Distribution Division". Such a change allows the originally limited regional distribution talents to have a larger global market stage and accumulate diversified distribution means. The company has also effectively improved the quality and efficiency of issuance through a series of measures such as the integration and reorganization of various departments and the internal bidding system of the issuance team.
In terms of product research and development, Youzu continued to increase R&D investment, in 2021, the company's R & D investment increased significantly by 9.29% year-on-year to 622 million, and the proportion of R&D investment in operating income increased from 12.10% in 2020 to 19.41% in 2021.
By the end of 2021, the proportion of R&D personnel in the total number of you people is 70.10%. As of December 31, 2021, Youzu and its subsidiaries held 882 trademarks, 278 software copyrights, and 27 copyright registration certificates for works of art.
Make a card track faucet
As can be seen from the existing adjustments, Youzu has chosen to focus on the card games they are good at.
In fact, relying on the accumulation of years of research and development experience, Youzu has achieved many excellent results in the field of cards through continuous product iteration and refined operation to create a category moat.
In 2015, Youzu's card benchmark product "Three Kingdoms" was launched, and in 2019, the company launched "Junior Three Kingdoms 2", which has maintained the forefront of the domestic App Store best-seller list since its launch, and has been certified by Forbes World Records as "the most popular three kingdoms card game brand", laying the company's position in the card field.
In 2020, the company continued the "Junior" series of IP launch strategy cards "Junior Three Kingdoms: Zero", and the launch of this product further consolidated the company's layout in the card track.
Nowadays, Youzu takes the "Juvenile" series as the main card IP, and builds the Youzu card product matrix through a number of "Juvenile" series works such as "Junior Three Kingdoms", "Juvenile Journey to the West", "Juvenile Romance of the Three Kingdoms 2", "Juvenile Romance: Zero" and so on.
According to the annual report of Youzu, during the reporting period, the company's game product flow totaled about 5.914 billion yuan, of which the total flow of card products was about 3.145 billion, accounting for 53.18% of the total turnover. The total flow of self-developed card products is about 2.567 billion yuan, accounting for nearly 43.41% of the total flow, of which the company's "juvenile" series products total about 2.498 billion yuan.
On the basis of the implementation of "Global Card +", Youzu's current R&D pipeline is rich in self-developed card products, and innovation has been carried out at multiple levels such as creativity, gameplay, theme, art, and technology. Numerical card mobile games "Code J" and "CodeWalker", placement card mobile games "Code IW" and "Code N3", card + SLG games "Code G" and "CodeName STAR", card + action game "Codename T3", turn-based card "Codename RB", shooting PVE "Codename Dawn" and many other self-developed products will be launched in the future.
Among them, "Code J" is a two-dimensional numerical card game, the product is based on high-quality standing drawing, smooth cultivation push map, refreshing combat experience as the core. Players will collect, develop their favorite characters in the fantasy world of the near future, and embark on adventures with them. Codewalker is a card RPG project that pays great attention to story content and artistic expression, and is committed to building a magnificent fantasy oriental fantasy industrial world. While inheriting the world view of the previous game "Three Kingdoms 2", the placement card mobile game "Codename N3" has greatly improved the artistic quality of the game, and at the same time boldly innovated the core combat strategy gameplay, greatly enhancing the differentiation between the characters and making the game experience full of fun. Code IW, which is also a card-like mobile game, focuses on multi-unit real-time combat, integrates placement and cultivation ideas, and combines sketch play to create a relaxed and casual card collection & cultivation experience. As an urban construction innovation SLG game, CodeName G focuses on story expression and gameplay fun, integrating a variety of simulated management and character plot growth, so that players can get a pleasant emotional experience. And "CodeName T3" is a thriller strategy action puzzle mobile game, players while solving different problems, while pulling out the cocoon to explore the truth.
It is worth mentioning that according to the annual report, youzu is developing the "Three-Body" series of IP games, which is expected to be introduced to the market in the next 3-5 years.
Continue to globalize the layout
While grasping the domestic market, the pace of tourists going to sea has not relaxed. According to the annual report data, the overseas income of the youzu reached 2.009 billion yuan, accounting for 62.71% of the total revenue, an increase of 7.60 percentage points over last year. The gross profit margin of overseas business revenue was 44.33%, an increase of 7.66 percentage points year-on-year.
In fact, globalization is still the main theme of the game industry. According to sensor tower, a mobile app data analytics company, 42 Chinese mobile games in 2021 earned more than $100 million in overseas markets, an increase of 5 over 2020.
In the past year, a number of Youzu products have been released online around the world, among which "Chronicles of the Three Kingdoms of the Youth 2" has successfully launched multiple versions in English, Thai, Spanish, Japanese, Korean, etc., and has achieved good results.
In September 2021, Metal Showdown was first tested in South America, and in early November, it topped the Google Play free list in 12 South American countries such as Brazil. In January this year, "War and Eternity" officially landed in Japan, also received strong recommendation from Google, and entered the top three of the iOS free list. At the beginning of April, the "Goddess Alliance: Chaos" released by the agent landed in Europe, America, Southeast Asia and other regions, and the public beta was recommended by the three ends of the overseas regions of Europe, America and Asia.
"In order to further improve the strength of the global research and development integration, this year, we put forward a requirement for the studio, that is, in the early stage of new product projects, it must be designed with a global mindset to produce game products that are loved by players around the world. In October 2021, the company established the Global Distribution Division, which effectively improved the quality and efficiency of the issuance through a series of measures such as the integration and reorganization of various departments and the internal bidding system of the distribution team. The nomad side said.
Game going to sea has become a strategic choice for most game companies, especially in recent years, domestic games have begun to take on the heavy responsibility of cultural dissemination overseas, and the international influence of Chinese culture and Chinese elements has increased.
In 2021, Youzu was selected as a "2021-2022 National Cultural Export Key Enterprise" identified by the Ministry of Commerce, the Central Propaganda Department and other five ministries and commissions. The overseas promotion project of "Chronicles of the Three Kingdoms of the Youth" was also selected as a special support fund project for "Chinese Culture Going Global" in Shanghai. In the future, the "Youth" series of products will further explore richer ways of cultural dissemination, enhance product connotation and competitiveness through R&D innovation and refined operation, and expand the influence of China's excellent traditional culture overseas.
At the company's 12th anniversary celebration last year, Youzu put forward the corporate mission of "science and technology to celebrate civilization". Youzu said that it will continue to pay attention to the changes and innovations of cutting-edge science and technology, use the power of cutting-edge technology to convey the value of culture, create more thoughtful and well-made original cultural export products for the global market, and help the excellent traditional culture with games as the carrier to truly "go global".