Whip Bull reported today
On May 13, it was reported that Huya, a game live broadcast platform, released its first-quarter financial report in the evening, with a revenue of 1.504 billion yuan, a year-on-year decrease of 23.36%; net profit was 71.033 million yuan, a year-on-year increase of 79.32%; Adjusted earnings per share were $0.39, compared to $0.35 in the year-ago quarter, above analyst expectations of $0.19.
In terms of revenue composition, revenue from live streaming was RMB1.260 billion, and revenue from game-related services, advertising and other businesses was RMB244 million.
In the quarter, Huya Live's paid subscribers increased quarter-on-quarter to 4.4 million.
As of March 31, 2024, Huya had cash, cash equivalents, short-term deposits, short-term investments and long-term deposits totaling 9.420 billion yuan.
After Tencent authorized Douyin to open the two riot games "League of Legends" and "Honor of Kings", Huya, which was once sung, performed surprisingly in the first quarter.
1. Reduce costs and increase efficiency, and transform Huya into a "goods" game
Huya's increase in profits may be related to the change in commercialization logic.
At a time when short video platforms are greatly sharing the attention of users, spending financial resources and energy to seek user growth is likely to be a loss-making business.
Last year, Tencent decided to transform Huya and switch to the marketing channel of game publishing, which can not only cut the sky-high signing fees of some top anchors to reduce costs, but also create synergies with Tencent Games' business.
In May 2023, Huya announced that Tencent Vice President Lin Songtao replaced Huang Lingdong as Huya's chairman, effective immediately. At the same time, Lin Songtao continued to perform his duties at Tencent and was responsible for the application treasure business.
According to reports, Lin Songtao joined Tencent in 2003 and is currently serving as vice president of Tencent. Mr. Lin has held management positions in various business lines at Tencent, including QQ, QQ Zone, Open Platform, Guangdiantong, AppTreasure and Online Video Division.
This adjustment means that Tencent will further strengthen its industrial layout in the field of games. The new appointment will not only strengthen Huya's capabilities in game content distribution and commercialization, but also extend the layout of the industrial chain by synergizing Tencent's advantages in "content distribution + application distribution" in the game field.
In August of the same year, Huya disclosed its "three-year plan", which included game distribution, game props sales and game advertising business.
This model has been successfully verified on Douyin's game distribution tool small handle.
Judging from the results, Huya's plan has initially shown results.
According to the financial report, benefiting from the rapid growth of game distribution and advertising services, as well as game props sales revenue, in the first quarter, Huya's game-related services, advertising and other revenues reached 244 million yuan, an increase of 137.6% year-on-year and 30.7% month-on-month; Revenue as a percentage of total revenue reached 16.2%, up from 5.2% in the same period last year.
Wu Xin, co-CEO and vice president of finance of Huya, said that the gross profit margin in the first quarter increased to 14.7% due to the increased contribution of the business with higher gross margin to overall revenue and continued efforts in cost optimization. With further improvements in operational efficiency, the company's total operating expenses decreased by 17.8% year-on-year.
2. Heavy commercial monetization or heavy anchor users?
For now, the new commercialization model has played a key role in restoring profits, but sustainability remains in question.
As a game live streaming platform, anchors and users are undoubtedly fundamental. If the foundation is shaken, even the tallest building will face collapse.
According to the financial report, in the first quarter, the MAU of Huya Live mobile increased slightly year-on-year to 82.6 million. In the fourth quarter of 2023, this number is 8,550, a decrease of 2.9 million from the previous quarter.
In addition, the average number of mobile monthly active users on the Huya platform was 85.5 million in the fourth quarter of 2022, compared to 85.4 million in the same period in 2021.
Obviously, Huya's user growth has been slow to break through the bottleneck.
In this predicament, Douyin, a traffic depression, is the best choice for top anchors.
Since the beginning of this year, Tencent has licensed "League of Legends" and "Honor of Kings", two of the most popular domestic masterpieces, to Douyin.
This means that the copyright barrier of Huya Games has quietly collapsed in the handshake of the two giants, and the space on which it depends has been invaded into the hinterland.
You must know that in the past 5 years, although the content ecological construction of Douyin is the most perfect, however, without the above two games, at least in the game ecology, Douyin is lacking.
In the past, there were shackles of copyright and contracts, and the anchors were in Cao Ying's heart in Han.
Now that this shackle has been opened, coupled with the shrinkage of the signing fee, the anchor has left Douyin, and the loss of users is a predictable result.
On December 2, the former Huya anchor and the first brother of King Glory "Zhang Daxian" left Douyin to complete the live broadcast debut.
In the 4 years on the Huya platform, Zhang Daxian has accumulated 30 million fans, and no one knows how many fans he has followed.
Today, less than half a year after entering Douyin, Zhang Daxian has 56 million fans.
In other words, after removing the number of overlaps, Zhang Daxian completed the accumulation of fans in Huya in almost half a year.
The difference in the scale of traffic between the two platforms can be seen.
In February this year, League of Legends veteran anchor Sao Nan officially announced that he would start a live broadcast on Douyin. Its last live broadcast in Huya was at the end of July last year.
Sao Nan settled in Huya in 2015 and is an 8-year-old man of Huya, during which there has never been a conflict with the platform.
Compared with Zhang Daxian, who jumped horizontally between various platforms, the exodus of the sao man reflects the dilemma of Huya's traffic peaking.
With the passage of time, there will be more and more anchors whose contracts have expired in Huya, looking at the success of Zhang Daxian, Sao Nan and other anchors, how much are they willing to stay in Huya, and what reason can Huya keep them? Under the chain reaction, how many users can stay in Huya?
How to weigh the trade-offs between profitable or user anchors has become the most important proposition for Huya at present.
Perhaps Huya has realized this problem, on April 26, Huya announced the official launch of the "Tiger Billion Plan", which is expected to cultivate more than 1,000 industry-wide head anchors in the next three years, cooperate with more than 5,000 game projects, and help game distribution through the content marketing model, and divide 10 billion for game commercial anchors in the next three years.
However, in the face of Douyin's huge traffic pool and the temptation of commercial value, it remains to be seen whether the plan can prevent the platform's anchors from shaking. However, according to the market feedback after the financial report, at least Huya has achieved phased success.
After the earnings report was released, Huya surged 6.7%.