On March 28, NetDragon Network Holdings Limited (NetDragon) announced its 2023 annual results at its earnings conference.
According to the report summary, in 2023, NetDragon's total revenue will be 7.10 billion yuan, gross profit will be 4.40 billion yuan, and net profit will be 550 million yuan.
Among the total revenue, the revenue of the "game and application services" segment was RMB4.19 billion, accounting for 59.0% of the Group's total revenue, and the profit by operating category reached RMB1.40 billion.
Game revenue accounted for 89.7% of "games and app services" revenue, with full-year revenue of RMB3.76 billion, rebounding from 2022 and up 9.6% year-on-year (down 5.8% year-on-year in 2022).
Specifically, in 2023, NetDragon's domestic and overseas game revenue increased by 10.5% and 4.5% year-on-year, respectively.
The revenue of mobile games was RMB3.17 billion, up 11.1% year-on-year, accounting for 84.3% of the total game revenue, while the revenue of mobile games was RMB590 million, up 2.0% year-on-year, accounting for 15.7% of the total game revenue.
Liu Dejian, Chairman of NetDragon, said at the press conference: "NetDragon's gaming business has achieved revenue growth in nine of the past ten years, with only 2022 experiencing a decline in the face of a slowdown in domestic economic growth due to the pandemic, and the growth has reached 3.9 times in ten years. “
NetDragon's main game products are "Demon Domain", "Demon Domain Interoperable Edition", "Heroic Soul Blade" and "Conquest".
The report shows that the total annual revenue of "Demon Domain" IP products reached 3.43 billion yuan, a year-on-year increase of 12.4%, of which mobile game products such as "Demon Domain" terminal game, "Demon Domain Interoperable Edition" and "Demon Pocket Edition" have achieved varying degrees of revenue growth.
The report points out that the growth of the "Magic Domain" IP product matrix is due to: first, the high-frequency content gameplay update mechanism, second, to meet the needs of players, improve the player experience to achieve ecosystem balance, and third, to improve the service level for paying users, driven by the top-level design of this "troika", not only activated the growth potential of the old IP, but also achieved a jump in player participation, in 2023, the average game time of "Demon Domain" IP users increased by 50.4% year-on-year.
"Blade of the Soul" and "Conquest" have been brought to life through e-sports events and gameplay innovations respectively.
In addition, the report also mentions the specific application of AIGC in different aspects of NetDragon's game business, and from Q1 to Q4 of 2023, the use rate of AI in NetDragon's art production has increased from 14% to 58%. At the same time, with the help of large language models, NetDragon has saved 300% of labor hours in the same cycle (from Q1 to Q4 2023).
According to the report, in the future, NetDragon will continue to promote the research and development of new game projects on the premise of continuing to maintain the revenue growth of existing games, which will cover social leisure, card placement, top-down shooter multiplayer competition, MOBA, MMORPG and two-dimensional games. In addition to expanding its existing markets, the company is expanding its gaming business to other markets such as Japan, the Middle East, and Indonesia.
It is worth mentioning that NetDragon has spun off its overseas education business in December 2023 and merged with GEHI, a company listed on the New York Stock Exchange, to complete the listing of related businesses, with a combined valuation of US$800 million at that time, and the business entity was renamed Mynd.ai, Inc., which is currently another major business segment of NetDragon.