Has the industry winter passed? Last year, the net profit of Youzu Network was 168 million yuan, and overseas revenue accounted for more than 60%.

(Image source: Oriental Fortune)

After experiencing a series of turbulences such as the death of the founder and the loss of performance, the Youzu network seems to be gradually coming out of the haze.

Recently, the Nomad Network (002174. SZ) released its 2021 annual report, and the data shows that the company achieved operating income of 3.204 billion yuan during the reporting period, down 31.87% year-on-year; the net profit attributable to shareholders of listed companies was 168 million yuan, a turnaround from the same period last year. 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 the past year, the company has focused on its main business, main tracks and main projects, launched a number of games in key global markets such as Europe, America, Japan and South Korea, and Southeast Asia, and improved the company's profitability through effective cost control." The relevant staff of the Youzu Network told the "China Times" reporter.

Overseas revenue accounted for more than 60%.

In response to the decline in revenue in 2021, Youzu Network said in the annual report that in addition to the high revenue base caused by the impact of the epidemic in 2020, due to the focus on the main projects, the key new game products originally scheduled to be launched in the reporting period have received more resource investment and extended the development cycle, while the company has terminated some non-strategic non-boutique products; in addition, the company has reduced the amount of inefficient advertising last year.

The reporter noted that overseas markets have become an important source of revenue for youzu networks. 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.

Regarding the main reasons for the growth, Youzu Network said that during the reporting period, the company implemented the focus strategy and lean growth strategy, paid more attention to precision and ROI (return on investment) in overseas advertising, and correspondingly reduced the amount of overseas advertising and improved the gross profit margin of overseas products.

In fact, more and more game manufacturers are focusing on the game to go global. 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.

Guohai Securities released a report on going global, in 2021, the global mobile game market size reached 90.7 billion US dollars, China's self-developed mobile game overseas revenue of 16.09 billion US dollars, is expected to reach a maximum of 127.3 billion US dollars in 2024, when China's self-developed mobile game overseas revenue up to 39 billion US dollars, the highest proportion of 45% in the overseas mobile market. As more domestic manufacturers increase overseas investment, it may double the market space for overseas investment, and the share is expected to further expand.

As for whether the company will continue to focus on overseas markets in the future, the above staff said that the focus of the company's development in the future is not to be domestic or foreign, but to globalize. The company has clarified the strategic direction of "global card +", and Youzu is committed to strengthening the comprehensive strength of boutique research and development and global distribution, and providing services for global players with high-quality card products. Youzu Network also put forward requirements for the studio, in the early stage of new product projects, with a global thinking to design, produce high-quality products, in order to produce game products loved by players around the world.

"Based on the strategic direction, the company has adjusted the issuance structure, integrated the domestic and foreign distribution teams in October 2021, established a global distribution division, and effectively improved the quality and efficiency of the issuance through a series of measures such as the integration and reorganization of various departments, and served its 'globalization' strategy." Nomadic network representation.

Won the first game version numbers in 2022

In terms of products, card games are at the heart of the Nomad network. According to the annual report data, during the reporting period, the company's game product flow totaled about 5.914 billion yuan, of which the card product flow totaled 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.

It is worth noting that after an 8-month window, on April 11, the State Press and Publication Administration announced 45 domestic game versions, of which Youzu Network's "Chronicles of the Three Kingdoms: Pocket Battle" was also among them.

According to data from the State Press and Publication Administration, from 2018 to April 2022, the number of approved versions of domestic games has decreased significantly, and the number of approved versions has decreased from 2055 to 45. "At present, the anti-addiction measures for minors have been actively implemented in the whole industry and good results have been achieved. The re-issuance of the version number will help the supply of game products to get back on track, alleviate the shortage of new products in the market caused by the suspension of the version number and the problem of the industry's internal volume, and is more conducive to boosting industry confidence, producing more high-quality games, and promoting the high-quality overseas of the mainland game industry. Gao Dongxu, founder of The China Entertainment Think Tank, told the China Times reporter.

In addition, the development of the "Three-Body" series of games is the focus of the industry, and Youzu Network has the rights to develop, publish, adapt and derivative products of the "Three-Body" IP. In this regard, the annual report also revealed that the company is developing the "Three-Body" series of IP games, which is expected to be introduced to the market in the next 3-5 years.

In the competitive environment of high-quality games, Youzu Network's investment in research and development has greatly increased. According to the annual report data, in 2021, the R&D investment of Youzu Network increased 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 company's R&D personnel account for more than 70% of the total number of people. "The company will invest no less than 10% of its gross investment in the research and development and investment of next-generation technology products, innovative projects and products every year." That's what the nomads said.

Gao Dongxu said that in the future, the mainland game industry will develop to the boutique and innovative industry, although there are currently a large number of game companies going to sea, but there are still relatively few products that can form a sustainable influence, and innovative boutique games are an important development direction for game manufacturers.

Responsible Editor: Xu Yunqian Editor-in-Chief: Gong Peijia