A few days ago, Zulong Entertainment released its 2023 annual report. The annual report shows that in 2023, Zulong Entertainment will increase revenue and profits, and compared with 2022, Zulong Entertainment's main financial indicators will be greatly improved.
In 2023, Zulong Entertainment will achieve revenue of 908 million yuan, a year-on-year increase of 55.53%, and a net loss of 315.6 million yuan for the year, a year-on-year decrease of 58.94%.
Revenue rose sharply and losses narrowed, mainly due to the launch of "In the Name of Shining" in Chinese mainland, Europe, America and Southeast Asia last year.
In the second half of 2022, Zulong Entertainment's self-developed and self-developed female-oriented mobile game "In the Name of Shining" was launched in Singapore, Malaysia, Japan and other regions, and after its launch, it has achieved outstanding market performance.
In March 2023, the mobile terminal of "In the Name of Shining" will be officially launched in China. On the first day of its launch, "In the Name of Shining" topped the free list of domestic IOS platforms, and dominated the list for four days, and the next day it entered the top ten best-selling lists of domestic IOS games. And in September last year, the PC side of "In the Name of Shining" also officially met with domestic players.
As of December 31, 2023, the cumulative number of registered users of "In the Name of Shining" exceeded 12 million. At the same time, as of the release of the annual report, the game's global cumulative turnover has exceeded 1 billion yuan.
In addition to the new product "In the Name of Shining", the long-term operation of many game products of Zulong Entertainment has also made a lot of profits. Zulong Entertainment currently has 13 games in operation, and 7 games have a cumulative global turnover of more than 1 billion yuan. Among them, the two games "Dragon Fantasy" and "Dream Zhuxian" have a cumulative global turnover of more than 4 billion yuan, and "Under the Ambition" has a global cumulative turnover of more than 1.6 billion yuan.
Last year, the new product "In the Name of Shining" exploded, and in addition to the stable and long-term operation of mature products, there were also new games and new projects, which were finally shelved before they could meet the market.
Among them, the affected ones include the previously high-profile "Avatar: Return to Pandora" project.
"Avatar: Return to Pandora" is an MMOPRG+ shooting game product, which first appeared in Zulong Entertainment's 2021 annual report. In the original concept of the project, "Avatar: Return to Pandora" will be a three-strong joint product of "the world's top film and television IP + Zulong R&D + Tencent global distribution".
However, in November last year, Zulong Entertainment announced that the release strategy of the "Avatar: Return to Pandora" project was changed from the previous Tencent distribution to the company's self-developed and self-published. This added to the cloud.
In January of this year, Zulong Entertainment announced the termination of the project.
The shelving of the project may have been largely due to poor test results. After all, in the international market, another "Avatar" IP game has a mediocre reputation, with a score of only 7 points.
What is the profit impact of the termination of the project?
In the annual report, Zulong Entertainment made a provision for the impairment of intangible assets of 22.304 million yuan in the annual report.
Regarding the termination of the launch of the "Avatar: Return to Pandora" project, Li Qing, chairman and CEO of Zulong Entertainment, said that it is to "integrate advantageous resources and concentrate on more profitable product projects to create a more favorable environment for the company's future development." ”
At the same time, he believes that "in the fiercely competitive, complex and changeable market, only based on the present, reduce costs and increase efficiency, in order to open up a broader living space for enterprises."
Under the cost reduction and efficiency increase, Zulong Entertainment's R&D expenditure has decreased from 746 million yuan in 2022 to 582 million yuan, a year-on-year decrease of 22%.
In addition, it is worth mentioning that compared with the projects disclosed in the annual reports from 2021 to 2023, under the cost reduction and efficiency increase, it may not only be the "Avatar: Return to Pandora" project that will be affected.
The 2023 annual report discloses that the product reserves for 2024 are:
"Project Codename: IM", original IP, a Chinese-style idle RPG mobile game built with Unreal Engine 4;
"Project Codename: E", a strategy card game adapted and developed based on the "Dragon" series of novels and animations;
"Heroes of the Three Kingdoms: Honghu Hegemony", an SLG game based on the IP of "Heroes of the Three Kingdoms";
Product reserve for 2025:
Project Codename: Odin, an MMORPG+ game based on the Dragon Clan series of novels and built on Unreal Engine 5;
"Project Codename: F" and "Project Codename: G" are in the game proposal stage, and the genres are MMORPG+ games and numerical card games, respectively.
Previously, Zulong Entertainment's product "Project Code: Rebirth" disclosed in the 2022 annual report was not mentioned.
According to the information disclosed in the 2022 annual report, "Project Codename: Rebirth" is an original IP "open world + role-playing" game, and the project is in the "game production" stage and is expected to be launched in 2024.
In 2022, the official public account of "Zulong Entertainment and Art Center" released a Demo of Unreal Engine 5 art technology verification - Ruin, and at the end of the tweet, it was also revealed that "Project Codename: Rebirth" will be an "open world + shooting" game, and external staff will be recruited.
In addition, there has been market information previously that "Project Codename: Rebirth" was originally created by the Hollywood team, and the game will also add artificial intelligence NPC characters.
At the same time, there is a market view that after the research and development of "Avatar: Return to Pandora", the technical wealth accumulated by Zulong Entertainment will also help develop its original IP "Project Codename: Rebirth".
And now, with the termination of the Avatar project, the original IP, "Codename: Rebirth" of "Open World + Shooting", may not be optimistic.