China Mobile Games releases full-year results: Adjusted net profit turns from loss to profit, excluding non-operating profits reaching 107 million yuan

【Game-Time News】

On March 27, Hong Kong-listed company China Mobile Games (0302.HK) announced its 2023 performance report. The report shows that in 2023, China Mobile Games achieved total operating revenue of 2.6 billion yuan (RMB, the same below); it achieved an adjusted net profit of 5.379 million yuan, and overall turned a loss into a profit. Due to the low base in 2022, the year-on-year increase was 103%. After deducting the impact of non-operating income and expenses on profits, operating profits were 107 million yuan.

According to the financial report, the company added more than 92.87 million registered users in 2023, an increase of 9.8% compared with the same period. Among other key performance indicators, the average monthly active users rose to 17.05 million, a year-on-year increase of 9.9%; the average monthly paying users were 1.19 million, a year-on-year increase of 5.8%. Among them, the mini-game business achieved revenue of 600 million yuan, becoming a new business growth point.

In 2023, many games planned to be released by China Mobile Games have successfully obtained version numbers, such as “New Legend of Sword and Fairy”, “Ultraman: Assembly”, “Swallowing Starry Sky: Dawn”, “My “Edward Sword Diary” will be officially launched in 2023. At the same time, with the rapid development of AIGC technology, China Mobile Games has also applied AIGC in independent research and development and distribution business links to achieve cost reduction, efficiency improvement and game innovation. The financial report disclosed that in 2023, minor players under the age of 18 will account for less than 0.01% of mid-range game revenue.

The publishing business performed steadily, and mini-games became a new business growth point.

In 2023, China Mobile Games’ publishing business will generate revenue of 2.133 billion yuan, with overseas revenue accounting for 10.6%. Specific to games, the role-playing card game “New Legend of Sword and Fairy: Wielding the Sword”, based on China Mobile Games’ own IP and jointly published by China Mobile Games and Celadon, will be officially launched in June 2023. It ranked No. 1 on the free list and No. 14 on the best-selling list in the Apple Store every month, and was recommended by the superstars of the Hardcore Alliance. In December 2023, “New Legend of Sword and Fairy” was launched in Hong Kong, Macao and Taiwan. In the first month of its launch, it ranked first in the free list of the Apple App Store in the above three regions, first in the best-selling list in Hong Kong and Macao, and third in the best-selling list in Taiwan. results.

In addition, the mobile card game “My Sword Diary” developed by China Mobile Games-invested Yuefu Interactive Entertainment was launched in May 2023. In the first month of its launch, it ranked first on the TapTap popular list and ranked third on the Apple Store free list. , ranked 21st on the best-selling list.

“Douluo Dalu: Shrek Academy”, jointly published by China Mobile Games and Tanwan Games, received a version number in July 2023, and launched an online reservation event in August 2023. The number of reservation players exceeded 6 million, and it was successfully launched in It was officially launched on January 31, 2024. In the first month of its launch, it ranked first on the Apple Store free list and first on the TapTap popular list.

While new games performed well, previously launched games also brought stable revenue to China Mobile Games. “The New Legend of the Condor Heroes: Iron-Blooded Heart”, “Zhenhun Street Born to Be King” and “Douluo Dalu – The Return of God of War” independently published by China Mobile Games, as well as “One Piece Passion” jointly produced with a third party “, “Dynasty Warriors”, and other games that have been launched online will still contribute revenue and profits to China Mobile Games in 2023.

At the same time, China Mobile Games is actively deploying the mini-game section. As of 2023, China Mobile Games has launched a number of small games such as “Kyushu Sword Legend” and “Gunslinger: Border King”, bringing it more than 600 million yuan in revenue. The new mini-game “Country Love Management Life” authorized by Benshan Media has started a billing test at the end of 2023 to verify the commercialization model, and is planned to be officially launched in the first half of 2024. It is understood that mini-games have become a new addition to the gaming industry, and the market has maintained rapid growth. According to data released by Juju Engine, the overall market size of China’s mini-games has reached more than 40 billion yuan in 2023, and will further grow by 2024, with the overall expectation exceeding 60 billion yuan. Under the rapid growth of the market, the mini-game sector is expected to become a new growth curve for China Mobile Games.

Looking forward to 2024, there are still many highlights in China Mobile Games’ publishing business. A number of blockbuster IP games such as “Douluo Dalu: Reversal of Time and Space”, “Fighting Sky: Peak Showdown”, “Naruto: Master of Konoha”, “New Three Kingdoms Cao Cao”, “Chat Group Daily Life” and other projects It will be launched on the market in 2024, and many of its games have completed testing and are available for pre-order.

At the same time, China Mobile Games will continue to vigorously promote the mobile game “New Legend of Sword and Fairy: Wielding the Sword” in Hong Kong, Macao and Taiwan, and plans to successively launch “Douluo Continent: Shrek Academy”, “Fights Break the Sphere” in Hong Kong, Macao and Taiwan. : Peak Showdown”, “Douluo Dalu: Reverse Time and Space” and “Codename: FA” and other games, and will launch the “Dynasty Warriors” mobile game in Japan to increase the scale of game revenue in overseas regions.

In addition, China Mobile Games is expected to launch more than 10 small game products in 2024, including “Country Love: Managing Life”, “New Legend of Sword and Fairy: Wielding a Sword to Ask for Love” and “Naruto: Master of Konoha” . Many of the above-mentioned games have obtained version numbers and are expected to bring considerable distribution revenue to China Mobile Games.

The self-research business is making steady progress. The number of reservations for the open-world game “World of Sword” has reached 4 million, and commercial testing will begin in May.

In 2023, China Mobile Games’ R&D business revenue will reach 215 million yuan, and R&D investment will reach 370 million yuan. During the reporting period, China Mobile Games applied AIGC technology to in-game art production and copywriting creation, reducing game research and development costs and improving research and development efficiency.

In terms of self-developed games, the Three Kingdoms-themed strategy mobile game “City Lord World” independently developed by Wenmai Interactive, a wholly-owned subsidiary of China Mobile Games, and exclusively published in the domestic market by Sanqi Interactive Entertainment, will be officially launched on the market in November 2023. Recommended by hardcore league stars every month.

It is understood that “City Lord of the World” is the first Three Kingdoms-themed strategy game launched by China Mobile Games. With the promotion and distribution experience of China Mobile Games and Sanqi Interactive Entertainment, China Mobile Games is expected to enter the Three Kingdoms-themed strategy game through “City Lord of the World” Game track and take your place. In 2024, China Mobile Games will continue to develop and launch the second Three Kingdoms-themed strategy game “Codename: Lord”, which is expected to further gain more market share in the Three Kingdoms-themed strategy game category.

In terms of e-sports games, the sports and competitive PC game “National Street Basketball” developed by China Mobile Games’ holding subsidiary Shanghai Zhoujing has obtained a version number in May 2023, and will start billing testing on December 29, 2023. The official summer public beta will be launched in 2024.

China Mobile Games’ self-developed games “Legendary World: Thunder Hegemony”, “Dragon City Legend”, board and card games, PC games and cloud games that will be operated online before 2023 also maintain continuous iterative upgrades and continue to contribute stable income to the company.

In terms of blockbuster self-developed games, Fairy Sword IP’s first open world RPG “Sword World” has obtained dual-end version numbers for mobile and PC in June 2023. The game currently has more than 4 million reservations and will be tested twice in 2023.

“World of Sword and Fairy” takes the 33rd year of the Fairy Sword calendar as the timeline entry point. Players will meet 32-year-old Li Xiaoyao here, the resurrected Lin Yueru, Wang Xiaohu, Li Yiru and many other classic characters who have just defeated Zen Master Qianye and solved the crisis, and many other classic characters. Together they experience a new story that has not been mentioned in the Fairy Sword IP. While maintaining the orthodox fairy sword flavor, the game also adds many original new characters and corresponding new plot content. For example, the mirror spirit “Chen”, which caused widespread discussion among players during the second beta test, will also add another original character “Yishu”, a Feng Shui master, in the next test of “World of Sword and Fairy”. “World of Sword and Fairy” improves the integrity of the game design through the “three-dimensional integration” design concept of plot, interaction, and visuals, allowing players to immerse themselves in exploring this oriental romantic fantasy world.

At the same time, “World of Sword and Fairy” also restores the most classic “Three Emperors and Five Spirits” setting in the IP worldview to the game. The scenes, monsters, NPCs, etc. in the game all have the special imprint of the Three Emperors system. For example, in the novice area “Guiyun Village” where players are initially located, the game has been iteratively optimized based on the experience feedback of second-test players. According to the setting where Guiyun Village is full of monsters, more Shennong system elements with a spirit-like atmosphere are added to the environment and architecture, making the entire Guiyun Village more recognizable and fairy-sword-like.

“World of Sword and Fairy” will also add more innovative gameplay in the next test to bring players a differentiated open world experience.As an animistic world, the game endows all items with “spirits”. Everything can be moved, grasped, and teased. In the third test, you can experience the new “Spirit Control” system, which allows players to conquer different spirits and become spiritual pets. The subdued spiritual pets can also be turned into stronger partners through continuous training and mutual growth. With the help of the abilities of spiritual pets, players can complete various challenges in the open world; they can also let spiritual pets assist in combat, providing richer combat strategy options. Spiritual pets can also participate in the construction of their homes, moving mountains and stones, refining elixirs, cultivating herbal plants, or playing a role in guarding their homes according to their different characteristics. Some featured spiritual pets also support riding, which greatly enriches players’ gaming experience in “World of Sword and Fairy”.

“World of Sword and Fairy” also pioneered the introduction of multiplayer home building gameplay, allowing different open world players to build their own homes in the same space for the first time. What’s more, you can invite friends and companions to create your own “fairy” community. Thousands of personalized construction modules make players’ UGC content full of possibilities, stimulating players’ desire to create and share.

“World of Sword” also uses more cutting-edge technologies in its research and development and player experience, with AI and AIGC capabilities being used in depth. For example, each of the NPCs in “World of Sword and Fairy” is a living being, and will show corresponding behaviors according to changes in the natural environment, improving the authenticity of the virtual world and bringing a more vivid open world experience of Sword and Sword. For example, when the weather is bad, the NPC will go home early; even if it rains, the NPC will hold up an umbrella and so on. In addition, with the help of technological applications such as AI face pinching and intelligent voice, the game has also greatly enriched players’ personalized expression and improved the interactive experience.

According to official disclosures, in the next test of “World of Sword and Fairy”, the user experience will be enhanced through the optimization of four major plot aspects; five new innovative gameplays will be added, including the addition of the two most core system gameplays to ensure the freshness and freshness of the product. Playability; and seven major basic quality improvements to optimize user sensory experience and bring players a new iteration of the oriental romantic fantasy world.

The game also plans to launch its first paid test in May 2024, and is scheduled to be officially launched within the year.

IP licensing business continues to grow, and the value ecosystem of Xianjian IP continues to expand

In 2023, China Mobile Games’ IP licensing business revenue will reach 257 million yuan, a year-on-year increase of 75% in 2022.

Among them, China Mobile Games has in-depth laid out the entire industry chain cooperation of the “Legend of Sword and Fairy” IP, covering games, film and television, animation, content literature, music, derivatives and live entertainment, and has joined hands with top partners in related fields to jointly create Fairy Sword IP Universe.

In terms of IP industry chain cooperation, China Mobile Games successfully launched the plot card mobile game “New Legend of Sword and Fairy: Wielding a Sword to Ask for Love” in 2023 and achieved excellent results. The idle idle mobile game “Legend of Sword and Fairy: A New Beginning” co-operated by China Mobile Games and Kaiying Network has been launched in 2023 and ranked fifth on the best-selling list in the WeChat mini-game rankings. The first fan community “Legend of Sword and Fairy” based on the IP “Legend of Sword and Fairy” is open to users for registration in 2023.

In terms of film and television, the “Legend of Sword and Fairy 4” film and television series produced by China Mobile Games and iQiyi and others has been officially broadcast on the iQiyi platform in January 2024.At the same time, “Legend of Sword and Fairy VI” launched by Shandong Film and Television will also be officially released on Tencent Video in January 2024.

broadcast. The film and television drama “Legend of Sword and Fairy One” co-operated by China Mobile Games and Penguin Film and Television has been completed in 2022 and is expected to be released in 2024.

In the field of animation, China Mobile Games has reached a strategic cooperation with Penguin Film and Television to jointly produce animated series of “Legend of Sword and Fairy 1” and “Legend of Sword and Fairy 3”. The trailer for the animated series “Legend of Sword and Fairy III” will be released in 2023, and the animated feature film is scheduled to be released in 2024.

In addition to film, television and animation, China Mobile Games continues to develop derivatives of the Fairy Sword IP. For example, in the field of trendy toys, China Mobile Games has cooperated with Bubble Mart. After jointly launching the first blind box series “Legend of Sword and Fairy Chinese Traditional Festival Series Figures” in 2022, the second blind box will be launched again in 2023. The series of “Legend of Sword and Fairy Chinese Traditional Musical Instruments Series Figures” is on sale globally.

At the same time, China Mobile Games has cooperated with well-known partners such as Liangxiao Shamei, Kaitian Studio under Shanghai Qiku Network Technology Co., Ltd., and Bandai Namco (Shanghai) Entertainment Co., Ltd. to continue to launch Hanlingsha in 2023 Figures, Yue Qingshu statues, Jiu Sword Fairy figures, etc. In addition, in November 2023, the production of interactive image works based on the IP of “Legend of Sword and Fairy” jointly created by China Mobile Games, Qishuyouyu, HippoJoy, and INTINY was officially launched.

In addition, the Fairy Sword real-life entertainment project planned and launched by China Mobile Games is in the final preparatory stage before operation, and is expected to start trial operation in the four provinces and municipalities of Shanghai, Hangzhou, Anhui, and Chongqing in 2024. By bringing the “Legend of Sword and Fairy” game to life, the online event marketing activities of the “Legend of Sword and Fairy” IP will be closely integrated with offline activities, presenting a more immersive, interactive, interesting and rich offline experience for Sword and Fairy fans.

Focusing on the future, with the trend of cross-border cooperation between game IP and film, television, animation and other industries, many high-quality contents of Fairy Sword IP will continue to be released. Based on the IP of “Legend of Sword and Fairy”, China Mobile Games has established an IP game ecosystem with first-mover advantages and a universal layout of Fairy Sword IP, which will continue to expand the ecological value of Fairy Sword IP, and is expected to drive China Mobile Games’ own value to further amplify and achieve sustainable development. develop.