On the evening of April 29, Youzu Network released its 2021 annual financial report. 2021 is an extremely difficult year for Youzu, but after ups and downs, Youzu has not only adhered to it through focus and a series of reform measures, but also laid a solid foundation for future development.
According to the financial report, Youzu's operating income in 2021 was 3.204 billion yuan, and the net profit attributable to the shareholders of the parent company turned into a profit of 168 million yuan, an increase of 356 million yuan compared with last year. Youzu Network also disclosed the first quarter report of 2022, and the company's first quarter revenue reached 545 million yuan and net profit reached 0.8 billion yuan.
On the occasion of the release of Youzu's 2021 financial report, this article analyzes the practice of Youzu in building a category moat with high-quality ideas from the aspects of operating products and new product reserves. In the face of the current industry environment with intensified competition, their turnaround this time has brought a lot of reference to the industry.
01
There are more than 30 games in the camp, and the turnover of self-operated cards accounts for nearly half
From the perspective of revenue performance, the company's total turnover in 2021 will reach 5.914 billion yuan, and there are currently more than 30 games in operation. Relying on years of experience accumulation, Youzu has created a mature long-term product management system, covering cards, SLG and other categories. The main products include the self-developed card games "Three Kingdoms of The Youth", "Chronicles of the Three Kingdoms of the Youth" represented by the "Junior" series, "Chronicles of the Three Kingdoms of the Youth: Zero" and "Journey to the West", SLG's self-developed games "Game of Thrones is Coming", "Infinity Kingdom", "Thirty-Six Plans", "The Great Emperor", as well as "Huawu Warring States", "Saint Seiya: Awakening" and other proxy games.
From the perspective of product categories, in 2021, the total flow of Youzu self-developed card products is about 2.567 billion yuan, accounting for nearly 43.41% of the total flow. Among them, the total flow of the "Nomad Boy" series of products is about 2.498 billion yuan, and the performance is relatively prominent. Through product differentiation positioning, juvenile series products grow together with users in the form of version updates, story preparation, and IP linkage. Youzu also pioneered the game industry's exclusive festival "616 Youth Day" to strengthen the brand awareness of teenagers, which have become the secrets of long-term operation.
Its long-term operation model product "Chronicles of the Three Kingdoms" has been online for more than 7 years, with more than 140 million registered users, and has been paying attention to maintaining the stability of product values and keeping pace with the times in art and special effects for many years, and the profitability of products and long-life cycle operations continue to be stable. In August 2021, "The Chronicle of the Three Kingdoms of the Youth" and "Armor Warrior" began to link, and the circle-breaking effect was significant. In January 2022, "Chronicles of the Three Kingdoms of the Youth" linked with the Internet celebrity IP "I Am Not a Fat Tiger" to open the seventh anniversary ceremony, and the main creator and the player live-streamed to celebrate together.
(In January, "Chronicles of the Three Kingdoms" and "I Am Not a Fat Tiger" IP linkage)
Its orthodox sequel, Chronicles of the Three Kingdoms 2, has been online for more than two years, and the Thai version was launched in April 2021, receiving the first recommendation from Google ICON, as well as the fourth and fifth best-seller lists, and ranked top 10 in the best-seller list for several months. At the same time, "Chronicles of the Three Kingdoms of the Youth 2" also carries out linkage with well-known IP such as "InuYasha", "Jiang Ziya", "Nine Songs of Heavenly Travel" and other well-known IPs, showing the enthusiastic spirit of the teenagers of the Three Kingdoms in the exchange with different cultural products.
(In March, "Chronicles of the Three Kingdoms 2" and "InuYasha" IP linkage)
In addition, the "Chronicles of the Three Kingdoms of the Youth: Zero" launched in 2020 inherits the ultimate painting style of the juvenile series, integrates the platoon deployment strategy cards with real-time competition, provides players with a new card game experience, and entered the game download list Top5 in the first week after the Korean version was launched in April last year, and was recommended by Google and Apple dual platforms. The classic card product "Journey to the West", which is about to celebrate its 6th birthday, also performed well in 2021, not only launching a number of large-scale versions, creating new PVE and PVP gameplay, but also achieving new breakthroughs in art standing painting and game painting style, and continuing to bring players new experiences.
02
Adhere to the idea of high-quality products, and continue to increase R&D investment
Under the strategy of "Globalized Card +", Youzu insists on improving its independent research and development capabilities and pursues the guiding ideology of building a foundation of technology and making breakthroughs and innovations. It is worth mentioning that around the idea of high-quality products, Youzu has continued to increase investment in research and development in recent years.
According to the financial report, in 2021, the R&D investment of Youzu was 622 million, the proportion of R&D investment in operating income was 19.41%, and the R&D investment and proportion of the same period last year increased significantly, and the company's R&D personnel accounted for more than 70% of the total number of people.
(Youzu's R&D investment in the past two years)
By the end of 2021, the company and its subsidiaries hold 882 trademarks, 278 software copyrights, and 27 copyright registration certificates for fine art works, laying the foundation for the company's high-quality research and development.
In 2021, Youzu will comprehensively carry out R&D organizational reform, upgrade the five major R&D studios into first-level departments, stimulate the studio's independent operation awareness and improve decision-making ability, and establish an innovation institute, which is responsible for technological breakthroughs, artistic exploration, and innovation category extension. At the same time as the organizational structure change, Youzu has also introduced supporting talent incentives and made many efforts in the construction of organizational culture, committed to creating a pleasant, efficient, mutual trust and respect, and a working environment that is inclined to value creators.
At the company's anniversary in 2021, Youzu announced the "20+X" incentive policy, based on a profitable, stable and operable, clear and calculatable incentive plan, promising no less than 20% of the operating profit to the business team, and will optimize costs, improve human efficiency and accuracy of budget completion through a series of detailed rules and process management. In addition, the company has also passed the 2021 stock option incentive plan and the second phase of the employee stock ownership plan.
Youzu said that under the background of globalization, in the future, the company will integrate global resources and talents to do key product research and development, use global thinking to develop and design, and produce high-quality products to further enhance the strength of "global card +". At the same time, Youzu also made it clear that no less than 10% of the gross investment is used in the research and development and investment of next-generation technology products, innovative projects and products every year.
The atmosphere of knowledge and experience sharing within youzu is also extremely strong, not only has general skills and cultural literacy improvement training, but also customized high-frequency training courses and knowledge sharing activities for planning, technology, art and other professional directions.
(Technicians share views on internal forums)
03
Self-developed products are abundant in reserve, and constantly pursue high quality and innovation
On the basis of the implementation of "GlobalIzed Cards +", Youzu adheres to the idea of high-quality products and innovates products at multiple levels such as creativity, gameplay, themes, art, and technology. In the financial report, Youzu disclosed more than ten game product reserves, and many products will be released in the past two years.
(The company is currently rich in products on the R&D pipeline)
CodeName J is a two-dimensional numerical card game with extremely high-quality standing drawings, smooth cultivation of push maps, and a 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 peeling back the cocoon to explore the truth.
It is worth mentioning that "Junior Three Kingdoms: Pocket Battle" has won the first batch of game versions in 2022. In addition, the company's ongoing "Three-Body" series of IP game development is expected to be introduced to the market in the next 3-5 years.
04
epilogue
Youzu has the courage to assume social responsibility, actively establish, strictly implement, and continue to improve the anti-addiction mechanism of the company's products in response to the protection of minors, and strive to guide minors to use Internet services in compliance. At the same time, Youzu also attaches great importance to the inheritance and dissemination of traditional Chinese culture, actively excavates the intrinsic value of Chinese classic culture, and uses its own advantages in global distribution capabilities to promote cultural going to sea.
In 2021, Youzu has made remarkable achievements, and the future is still a combination of challenges and opportunities, Youzu will always be unswerving, forge ahead, under the premise of continuously consolidating the core competitiveness, further expand the advantages of globalization, and strive to become a "first-line game manufacturer with global influence".