Q1 2022 NetEase Inc Earnings Call
Speaker 1: No.
Speaker 2: Thanks today's audience and planned to be underway shortly. We appreciate your patience and peace remain underline. Thank you.
Speaker 1: Good day and welcome to the net isast thir quarter 2022 earnings conference call, today's conference being recorded at this time, I would like to turn the conference over to Margaret shif. I are Director of net. Next pisco headmaap.
Speaker 3: Thank you, operator. Please note the discussion today will contain forward-looking statements relating to future performance of the company and are intended to qualify for the safe harbor from liability as established by the? U's Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and in this discussion.
Speaker 3: A general discussion of the risk factors that could affect net's business and the financial results is included in certain filings of the company with the Securities and Exchange Commission, including its annual report on Form 20 -f and the announcement and the filings on the website of Hong Kong stock exchange. The company does not undertake any obligation to update this forward-looking information, except as required by law.
Speaker 3: During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the 2022 first quarter earnings news release issued earlier today. As a reminder, this conference is being cordorted. In addition, investor presentation and a webcast replay of this conference call will be available on the netti's corporate website at IR netes's Com.
Speaker 3: Joining us today on the call from netis senior management is Mr William Dean, chieflie Executive Officer, Mr Charles, an Chief Financial Officer, and other members of the senior management. I will now turn the call over to Charles, who will read the prepared remarks on behalf of William. Thank you Margaret, and thank you everyone for participating in today's call. Before we begin, I would like to remind everyone that all percentages are based on RMB.
Speaker 4: We kick off 2022 with a solid quarter advancing each of our business lines, with total revenues coming in at RMB 23.6 billion, up nearly 15% year-over-year, and our net operating profit increased 29% year-over-year to RMB five point five billion.
Speaker 4: Online gains revenues were RMB 17.3 billion, borrowing by 15% year-over-year.
Speaker 4: Our flagship pitthholes continued to impress with their remarkable longevity and strength. In the first quarter, revenue from Fantasy Westward Journey online and new Westward Journey online too, continued to grow steadily, demonstrating naty's core competence in operating franchise ipps over impressive duration and longevity of about 20 years.
Speaker 4: With immersive festive activities and engaging new expansion packs during the Chinese New year period. We are thrilled that these apic games remain as attractive and appealing to the players as ever.
Speaker 4: We are actively growing many other long-lasting franchises in addition to these legacy titles, keeping our content French with years of perseverance and dedicated craftsmanship.
Speaker 4: Take life after, as an example, our open world in a survival game first introducceding 2018 continues to lead its category with its distinctive survival gameplay.
Speaker 4: Since its operation of more than three years ago, we've been frequently rolling out bigak updates for life after, on an almost quarterly basis, refreshing players appetites with numerous content updatesin the first quarter, the spring festival version of life after graf, again to the forefront once again on China's iOS top growrossing chart.
Speaker 4: In terms of newly launched titles: nearly one year since its launched, narrowa Blade point maintains strong engagement levels with fast paced content updates including new gameplay Heroes and weapons.
Speaker 4: Adding to our regular update schedule. We are tracing for a significant update, including the first new map to bring new excitement to the whole player community in the second half of this year.
Speaker 4: Featuring unchained mlay comeback narrative playpoint was a huge breakthrough for us in eport and has become one of the most popular games on live streaming platforms in China.
Speaker 4: To round out the gaam's ecosystem, we established a multti-tieer tournament system consisting of scrimines, regional tournament and a world championship, catering to different player groups, including the general public, as well as professional teams across different regions.
Speaker 4: In January we concluded the first worldad championship tournament, the game's highest level of competition, which attracted considerable attention from essports fans worldwide and brought global players in exciting visual feast.
Speaker 4: We are also seeing growing momentum with Infinite bl granch. Similar to our original SLG game- Invincible. This next generation SLG title has begun to show healthy, sustainable growth trend in the first quarteras the game advances, we are steadily gaining more confidence in our ability to extend the success of SLG games to an even broader demographic.
Speaker 4: In April we launched that by daylight mobile in Asia. co-developed with behaviour and published by us. That by daylight mobile is the mobile version of the famous asymmetrical battle arena game.
Speaker 4: Bring players unrivvaled, asymmetrical competitive experiences on mobile platforms.
Speaker 4: Soon after it's debute that by daylight mobile optops the iof tunl chart in both Japan and Thailand with very strong user engagement.
Speaker 4: In the second half of the year we plan to bring to the world more exciting titles which we hope to thrill our growing global community.
Speaker 4: In particular, we are extremely excited to have diabro Immortal slated for release on the second of June in most global markets.
Speaker 4: And last Friday, at our annual game day event, we announced that the China launch of the ablo Immortal is now confirmed for June , the twenty-third.
Speaker 4: As one of the gamamer community's most anticipated tiitthles this year. theaverro andimmortto marks one of the most ambitious game relief in the diaverro franchises 25 -year history and will bring fans and new players at uncompromised to put a gaming experience.
Speaker 4: Preregistration has been exceptional, with more than 35 million people preparing for the battle to come worldwide, including 15 million in China and countingthe. abro immoorto supports both cross play and cross progression, allowing global players to join the fight which with each other, regardless of platform, while being able to seamlessly transitioned between mobile and PC gameplay.
Speaker 4: We consideidred the view of DI ablo immoortto: a huge opportunity to show the world, particularly Western gamer community, about nety's strong rnd capability.
Speaker 4: We take a very global view of our online GME business, and Diablo IM model truly embodies the sort of worldwide appeal that we hope to possess.
Speaker 4: Next in the pipeline we will be introducing narrative Bladepoint on Council. The development is well on track and we are definitely excited about its prospect and to welcome Council players to our global narrative Bladepoint community.
Speaker 4: Equally exciting is our planned global market launch of Harry Potter Magic Awakened.
Speaker 4: Which captivated the Chinese market since last September . While we are putting great efsets into the global version, we are also simultaneously working intensively to update the game in China, regularly rolling out new cards, costumes and gameplay to add even more fun.
Speaker 4: Our reach pipeline goes far beyond these titles and we continue to initiate new projects on schedule.
Speaker 4: As usual, we held our 2022 and new game product launch event last Friday of May twentyieyears.
Speaker 4: Revealing the latest information about other exciting titles in the pipeline, including the mobile versions of Justice and narrowa Blade. Point Aggie party, a casual game, raw of war, vla football and mission zero.
Speaker 4: We encourage you to read through our press release about this event or watch last Friday's event replay to get more comprehensive information.
Speaker 4: In 2022. We have made more solid progress in globalization.
Speaker 4: We have always been relentless in our drive to invest in and empower our people, and we are incredibly excited to have more global talents joining us.
Speaker 4: After years of strategic planning, we now have a number of first party overseas studios across Japan and North America, each of them being led by top industry veterans who are using their creativity to forge their best titles on netadde' platform.
Speaker 4: For example, our three Japanese studios aim to bring, aim to build great councle games for both the Japanese and the global audience.
Speaker 4: Earlier this month we also launched our first U's studio, jackcllobe games, led by industry veteran Jack emot, who has that ad of experiencing MMO game development.
Speaker 4: Our idea is to persistently unleash talent potential by enabling them to focus on core mechanics and story lines with creative autconomy, while offering them solid technical support in areas such as Coding and art design.
Speaker 4: Going forward. We hope the world will see more of maddie's relevance on chpo releases in the global market.
Speaker 4: Either through self-development, investment or publishing. Now turning to our education business that is yourdll achieved a solid and sustainable performance in the first quarter after disposing of its academic after school tutoring businesses.
Speaker 4: With total net revenues of RMB one point two billion and gross margin of 53%.
Speaker 4: Smart learning devices remain the key driver of Yoda's future growth.
Speaker 4: In the first quarter. Y' o now continueed to extend its technoic technology offering by launching improved content features and new products.
Speaker 4: Net revenues from Yoda's smart devices segment reached RMB 253 million, representing an increase of 25% year-over-year.
Speaker 4: Through partnership with education prices in 11 additional regions. We have added our regiginal sounds to the yodo listening part, based on various versions of the English learning textbooks.
Speaker 4: In early April we introduced a new product named Yoda smartlike, yoddo jand tyitan, which integrate AI learning features into a DASH lamp.
Speaker 4: Powered by our robust AI algorithms, it allows users to schedule a plan before they study, look up meanings and translations of work and sentences in Chinese and English during their study time, addings back and review their homework after they finished studies.
Speaker 4: By clicking the screen to conduct research. The device helpps students develop more independent learning habits.
Speaker 4: And significantly improves their learning efficiency while protecting their eyes.
Speaker 4: Looking towards gth opportunities in the Steam education sector we have worked hard to optimize the functions and user experience for different courstes as a result for example gth. Billions from yoddo chass class increased over 170% quarter-over-quarter in addition to content upgrade. We have also built a learning community on the yoddo board game. Academy at.
Speaker 4: On this platform, students of goal Chair and Chinese chest courses can interact and compete with AI or their peers are similar levels in a FM and engaging way to complete the cycle of learning, testing and grading. Yoda has applies to become an official online testing and certification site for various board game association in China to make the skill certification process easier for our studentslooking ahead to the remainder of 2022, Yoda we remain focus are upgrading its diversified portfolio of products and services and we have confidence in its future development, powered by its sophiscated R andd capabilities and persistent drive to empowe education with our technologywith net's cloud music.
Speaker 4: We maintain steady momentum. In the first quarter, MAU for our online services were 182 million, largely stable both year-over-year and quarter-over quarter. We also continue to improve our monetization capabilities, growing our net revenues by 39% year-over-year to rnb two point one billion, driven by healthy membership growth and robust social and payment services.
Speaker 4: Our membership paying ratio reached 20%, compared with 13% in the same period last year.
Speaker 4: We made enhancements to our content and introduced more product feature innovations to improve the user experience, which helped us drive paying user growth.
Speaker 4: Additionally, gross margins more than doubled quarter over top quarter in the first quarter, reaching over 12%, as we continue to optimize our content cost structure.
Speaker 4: On the new features. Brown, we introduced our innovative Harry Potter magic radio, a joint collaboration with nety's games steme, which allows users and gamers to enjoy Harry Potter theam podcast content within the game.
Speaker 4: While we continue to add unique products and capabilities that help redefine our community's music experience, we are also improving our brand awareness and influence with content-oriented and the event-driven campaigns.
Speaker 4: We offer a full spectrum of varied content, as the demands of our useful user base are increasingly diverse and personalized.
Speaker 4: By the end of March 2022. our counter library consists of more than 19 million music tracks, including music from established labels as well as independent artists.
Speaker 4: We are attracting independent music talent at a notable rate and by the end of the first quarter we had more than 45 thousand registered independent artists on our platform.
Speaker 4: To help independent artists create and promote their music as well as realized commercial value. We continue to nurture music talent with invaluable tools such as support programs, traffic referrals, fand interactions and multiple monetization methods.
Speaker 4: Moving on to yshan, April marked its sixth-year anniversary.
Speaker 4: Over the course of the last six years we have built ensine into an exciting private label consumer lifestyle brand.
Speaker 4: We have an established and strong supply chain system and can accurately profile user preferences with our leading algorithms.
Speaker 4: Through diversified channels, yenha has launched a number of popular products, such as CAT foods, bathroom fragrgrants and ergonomic shares. As we move ahead, yanang will continue to focus on pack home cleaning, baddting and other categories that we excel in, while we continue to launch our original design products and bring consumers products that facilitate more chilled and pleasant lifestyleabove all else, that is is always a content company with deep rooted Internet DNA.
Speaker 4: Our ability to innovate, create and leverage our proprietary technology forms a cohesive layer across our different business lines, whether it gains education or music. Within each of these areas of robust content, we are steatffirst in our mission dedicors, to improve our content competitiveness. We will continue to invest and innovate to provide users with excellent products and services, full of ban technology and surprises.
Speaker 4: At the forefront of each of our business lines is our commitments to social responsibility and charitable endavors. With the recent pandemic cases in China, each of our businesses have utilised their resources to help the community we are serving. In March, naties group distributed one million copies of anti pandemic gift packages to cater to people's entertainment, work and consumption needs. More recently, leveraging the advantage of our supply chain, ania mobilised £50 of fresh vegetables from our fresh food suppliers for people in COVID-19 affected Shanghai areasadditionally, leveraging the power of music as an inspiring and uniting cores, we distributed another five million cloud music the? O memberships for threeree.
Speaker 4: To the people in Shanghai and gealing profit with a goal of using music to comfort and inspiire those impacted by the pandemicthis concludes Williams comments. I will now provide a brief review of our 2022 first quarter financial results.
Speaker 4: Given the limited time on today's call, I will be presenting some abbreviated financial highlights. We encourage you to read through our press release issued earlier today for further details.
Speaker 4: Total net revenues for the first quarter were RMB 23.6 billion, or U's dollar three point seven billion, representing a 15% increase year -over-year. Net revenues from online GME services were RMB 17.3 billion, up 15% year-over-year. The additional growth was primarily due to the increased revenue contribution from the launch of new Gaines such as narratively point and Harry Potter Magic Awakened.
Speaker 4: Net revenues from our mobile gains accounted for approximately 67% of total gains revenue.
Speaker 4: yoddo's net revenues were RMB one point two billion, compared with one point three billion last year's same quarter.
Speaker 4: ynow discontinued its after-school tutoring services for academic subjects under China's compulsory education system, K 9, sinceings the fourth quarter of last year per regulatory requirement.
Speaker 4: If we exclude this continued business, Q1's Apple to Apple revenue stayed relatively stable compared with last year.
Speaker 4: On the other hand, the smart devices business maintained steady gross W trajectory, with mat revenues up 25% year-over-year.
Speaker 4: Net revenues from cloud music were RMB two point one billion, up 39% year-over-year. The increase was primarily due to increased revenues from membership subscription and social entertainment services.
Speaker 4: Net revenues for innovative businesses and others were RMB three billion, up nearly 12% year-over-year due to business development and seasonality impact of various lines.
Speaker 4: Our total gross profit margin was 54% in the first quarter, up slightly compared with 54% in the first quarter of last year.
Speaker 4: Gp margin for our online game services remain stable at 65%.
Speaker 4: As a reminder, this number is generally stable, with some narrow fluctuations based on the revenue mix of mobile and PC tyitholes, as well as self-developed and license gains.
Speaker 4: Gp margin for yoddo was 53%, compared with 57% in the same period of last year. The decline was mainly due to the lower revenue proportion from yoddo's learning services, which carry a relatively higher margin.
Speaker 4: Gp margin for cloud music exceled in this quarter, climbing to 12% versus 4% in the preceding quarter and a negative margin of 3% in the same period last year.
Speaker 4: The significant margin improvement primarily resulted from strong top line growth as well as improved content cost control.
Speaker 4: Additionally, this marks our fourth consecutive quarter of positive growth GP margin for cloud music.
Speaker 4: Gross profit margin for innovative businesses and others was 23% and.
Speaker 4: Flattish, compared with 24% in the first quarter of last year.
Speaker 4: Total operating expenses for the first quarter were RMB seven point three billion, or 31% of our total net revenues.
Speaker 4: If we look at our cost in more details, our selling marketing expenses as a percentage of net revenues were 12% compared with 13% last year. The change was mainly due to less marketing spending related to yoa. If we exclude Yoda, our selling and marketing expenses.
Speaker 4: As a percentage of net revenue were 11%, compared with 10% last year, mainly due to increased spending on certain gains promotions in the first quarter.
Speaker 4: Our RD expenses were RMB three point four billion, or 14% as a percentage of net revenues.
Speaker 4: We remain committed to investing in content creation and product development, which is core to our revenue growth.
Speaker 4: Other income was RMB 28 million for the first quarter. The quarter-over-quarter and year-over-year decrease resulted from the fact that we had certain publicly traded Securities in our current investment.
Speaker 4: And the prices of such Securities declined meaningfully in the first quarter. We are required, on U's gap, to reflect for these fair value changes.
Speaker 4: The effective tax rate was 22% for the first quarter. As a reminder, the effective tax rate is presented on a accrual basis and the tax rate differred from each of our entities depending on the applicable policies and our operational results.
Speaker 4: Our non-GAAP net income attributable to our shareholders for the first quarter of 222 total RMB five point one billion or U's dollars 807 million. non-GAAP basic earnings per ADS was one point two three U's dollars or zero zero point two five per share.
Speaker 4: Our cash position remains strong. As of the quarter end, our total cash cash equivalents, current and noncurrent time deposits and short term investments balance total RMB 107 billion, compared with 103 billion as of E end of last yearin accordance with our latest revised dividend policy, our Board directive have approved a dividend of U's dollar zero point zero six 4- four per share or U's dollar zero zero point three to two per abf.
Speaker 4: Lastly, under our share repurchase program, approximately 20.1 million adf had been repurchased as of the first quarter end, for a total cost of approximately U's dollar one point nine billion.
Speaker 4: Thank you for your attention. We would like now to open the call to your questions.
Speaker 4: Operator Please go ahead to the you and okay, Thank you. Would like to ask a questions? Al by pressing Star or one on your 10 lephone, keepy p. if you are using a speaker phone, please make sure your milute function is turned off to L your signal to reach our equipment for the benefit of all participants on today's call. If you wish to ask your questions to management you Mandarin, please immediately repeat your questions in the English. You have possible just a moment to lot everyone an opportunity to signal for questwe take our first questions from the line of at least Y, Y from city groups need to go like open. Please go hhead helhi y. okay, I Y y.hi, Thank you Y, So what? one
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Speaker 3: So the overseas market and the overseas the development is of ut importance to us. So right now, about eightty percent of our RD resources in china- something between 10 and the 20% overseas market and going forward we think that our one probably see 40 to 60% split, having 40 for of the randd resources in overseas marketts. We are working very diligently and actively with overseas development team to code, develop some in content. Internally we have a plan and we have of clear goal of how we want to achieve the revenue split between overseas markets and the China marketts and hopefully both the China markets and overseas markets will account for a meaningful portion of our revenue. Thank you.
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Speaker 8: Mean know about, on what you know want even I you I, today. How may you you I, I will you ud why he did? Of thought, I think. And so his first question is about the the impact of overseas gain market. How was that with affact, our profitability for gain business? And the certain question was in terms of, you know, in addition to Japanese market, were other regions who were thinking of thinking of publishing yourself. So, for convenience, I will answer these questions directly in English. When we think of our overthree gains, increased contribution, obviously we are in a ramp phas.
Speaker 4: But as we grow more diversified titles across different geographies, like I mentioned in previous potis, that the margin profile shouldn't be very different between domestic game and the overseas game in a steady state, but rather it is more correlatated to the gross buildilling. So we are very confident in the next three to five years time, as we continue to expand scale and presence in the overseas market, when we have multiple hit titles that universally appealing to the users, those games are going to demonstrate very, very strong and similar margin profiles as what we have been experiencing with some of our very long lasting legacy titles here in China. Now your second question regarding our publishing capability, as you may have noticice that that is remains very determined in major market such as Japan and for some titles even in the West market.
Speaker 4: We strive to learn and control our own publishing capability. That is something we have to gradually build up and learn as we become a truly global game company. You may have noticed that we successfully self publish games like Ma out, identified in Japan. We are going to publish Harry POTS, magical weakkend in Japan. We are globally publishing lot of the Rings. I think our going forward with more, with more.
Speaker 4: Content partners, with more IP partners and with more self-developed or co-developed titles, our global publishing capability, particularly in major markets, will be further strengthened.
Speaker 10: Operator next questionyou please. Okay, we will take our next questions from the line of Jun, from Nora, your n oper.
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Speaker 11: It's a de, your game different revenue rose by 1%. You can ensure that in one Q, even though you did not launch any title, the first quarter. Could you give us some colors? What words of factors that have contributed to this recovery, your differentfer game revenue? Just wonder if this recovery has anything had anything to do with with the lockdownthank. You our answer, this financial question directly in English: So, by the way, we reraised differentferred revenue into contract liabilities, just to be more precise and accurate under the accounting literature. So yes, as you may have noticed, our contract liabilities increase a slightly for games. If you exclude now from that, it's largely attributable to our strong Q1 growross Q1 performance of PC games.
Speaker 4: As you may know, Chinese newyear period is typically a seasonal seasonality peak for PC games and Fantasy. westwere journey, by the way, after almost two decades of operation, have recorded a new record high: quarterly gross billion and quarterly revenue in the first quarter. World of Warcraft also performed fairly strong in the first quarter, contributing to our strong game contract liabilities that's been recorded in the first quarter. That's the main reason.
Speaker 1: Now operator. Next question pleaseok, Thank you, we will take our next questions on the line from fed Felix lew from ups.
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Speaker 4: Question directly in English. So first of all, the AB Immortal. Under the pannership agreement we are a co developer.
Speaker 11: So we got a co developers share of pie from its global revenue. In terms of publishing, netes is responsible for the games publishing a Mainland China, whereby blittheard it'is responsible for its publishing rest of the world. You may have noticed that we also have very close partnership- business partnership- with Microsoft because we've being the exclusive partner for miccraft for multiple years. We the announced acquisition of activevis by Microsoft. We are very, very looking forward to a future strengthen Ed partnership between netis and the, a broad Microsoft franchise, because we are a premium content provider. They obviously have very.
Speaker 4: Very excellent stress party studios as well as Xbox distribution platform. So there are multiple areas that we can explore potential partnership down the road to your second question on yenia, we will have yanent co single to answer your question.
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Speaker 12: How jchar on until with a moment, anctioning volumes or Ho that. But you had said's ally that we've put onso. It's tring. Certain regions- and we do think about our fulfillment and the logistics system- have impacted somewhat by the pandemic and since the end of March the fulfillment time has been it's a lot longer than before. For the good news is that' made we've seen much more meaningful improvement and progress and we think that progress is still ongoingthank you.
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Speaker 3: It's true that overseas markets are completely different from the China market. In China, themajority of the revenue games revenue come from mobile mobile games, whereas for overseas we have Council, we have PC and and we have mobile. There the different types of games is very different: ammonetization pattern and what different countries. Monetization different as well. But all of that it would shouldn't be a big challenge for neteast. We have decades of experiencing in aming andd, So we should quickly find a way to speisfy users and players on fif, different countries on different types of divides. Thank you.
Speaker 14: Next question. Okay P our next question from the line of mey, from high point interationthe life of a pay hearti i. how year things on child M, GR or whent and Con ch languated. Now would want to some one J Te from me. You found me how howwai you people to and on to show gener sh you that the B family of no Jo research call? How do I tell me thiring the you Jo I look about your city. How your one J reging call who are ear hing and children me be cing? That's me for taking my questionash and congratulations a very strong quarter. So my question regarding the pandemic impact among our gain business, just wondering: can you comment down the impact?
Speaker 5: Pandemic opening up in overseas market on your games business, because some of your PE noted that the wakness coming due to that fact just want, and if you also experience that kind of the situation and in a more while in terms of the domestic market, did you see increasing time and thatious stand on your games during the domestic not downance? Thank you, I M that the char. In the interest of time, let me answer your question directly in English. So the COVID-19 situation is being lasting things.
Speaker 4: It's been more than two years. Frankly speaking, I think I think everyone is a victim of this COVID-19 situation. Game industry or, broadly speaking, entertainment industry, is probably a little bit more fortunate that we are less severely impacted by by the COVID-19 than many of the other businesses when we, frankly speaking, we do not.
Speaker 4: Observe any weakness from our overseas market right now because we are fairly, fairly new and in our early stage of of executing our ambitious global strategy. As we continue to launch more games, we feel pretty confident about our growth, particularly in the second half of this year, where many of our exciting, highly IP pated games will be unveiled to the international game audience. Now speaking of the domestic market for the past quarter.
Speaker 15: Chinese New year period is, like I said, a strong seasonality for PC games, but we are not seeing really any meaningful So calledard enhanced up or timing spend. A mobile, mobile state relatively, I would say, stable. So we are not really seeing any kind of high lows, of obvious seasonalities or one of implications caused by the lockdown. I think you know our our, our game development philosophy: fair, consistent and straightforward. We, you know there's a lot of these macro situations that's beyond anyone's control. What we could do is that try to observe the shifting user experience preferences and try to cater to the shifting preferences by diligently and regularly roll out content update.
Speaker 11: Through innovation, through fresh game plays, et cetera. I think that is kind of an open secret. We've been adopting and operating for the last two decades from piec screens to mobile screens, through good economies and bad economies, I think. I think that's something. If anything that we have learned from the covidbit of from from our past two decades of experience, is that remain user focus and content focus. Then we WOn't go to wrong off the trackoperator that maybe we have time for one last question.
Speaker 2: Okay Thank you. Next questionions from the line of thas song from jfethe life. But I I say or the T, what is ES when you 1, you J on and like woman, the conb, the also show seeeurope and make how she host the. Why ING you it, the Church, your whole time? The H woman can ch that domest would see the H they can the sudo. Thanks, management are proking my questions. May ask a question about the regulatory environment for the online giamving sector after the resumption of the how pool book? Should we expect any the regulations or anything that may be released in the future?
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Speaker 17: That in the basash of new license approvals and I think that going forward, the policy will remain that it supports game content that could be beneficial and educational to the gameers and game players. Thank you, Thank you, Thank you very much. I think that would end our call operators.
Speaker 18: ok well ok, Thank you. Thank you once again. Great face conferen once. Thank you.
Speaker 1: Year Thank you once again for joining us today. If you have any further questions, please feel free to come to us that directly. Our tbg estimulations have a great day, Thank you.
Speaker 7: That Congress today's conference. Thank everyone for our participation.