Q2 2022 NetEase Inc Earnings Call

Even how sociate Gu T what a he went.

Q and A. Thank you, management, for taking my question. What's management view on the domestic regulatory landscape and expectation on the banhau approval? With a likely lower number of banhau approved in the future, what is the

How will this change our game strategy including JARRA, IP, investment, etc.? Thank you. So, as you can see, the game strategy is very simple. You can see the game strategy is very simple. The game strategy is very simple.

Here from the as So they want be get things sure. We are Con, we see to the towater. Only this is converge that have out through a new actctions into the. I cesee way how much of doing as sure seeure because asitated you.

to the Seattle she are to the total of only this is going toward the actual action to the I wish you a how much information she got a bit she said you got to go to go to go to go to go to go

So I kind of mentioned that in the earlier question, one of the reasons we have to look abroad and be more active in expanding our user base overseas because of lack of ban hao in China. And secondly, it kind of tells us that we have to value or cherish the domestic market even more because ban hao is a very precious resources now. So every about how we get we have to work, putting more effort to make sure every game we develop, the launch to the market will be part of the market.

donchoire cogate choice. What you pay whole Jo, from coanallogic user base to the LG lad, your see ther to assuming to season mat when way I get to's integr your So you some more inte solution. How do I me, Jo laz? So your, you and China, I your G here high in your D joh.

So, my question is about two single game titles. First is on the infinite Lagrange. So, what's the reason behind these titles' popular trend in the recent months and why we're seeing such a strong expanding MEU growth? And second is on the Naraka Playpoint Mobile. So, from a longer term perspective, how do we see...

their cameras and phones will be able to work 24 hours in the studio protection room. President Tsaicommerce Canada President Tsai Thank you very much.

So, our team actually has joint expertise in running games for a very long period of time.

So Infineon Lagrange has actually been in operation for quite a while. We introduced a new version this year, and the game players seem to have loved this new version, which means that the content was strong enough to attract a whole brand new set of game players, and that gives us confidence that we will be able to continue to expand this category. Thank you. Thank you.

O more, suppose you TRI out the wor. The country of your, the surge of you was again to de the support it on board to, So that to the fu coordation for it F my jion want to things. Get PAT J. you got de something. Do J two that? So yes, sure that that there are a number of men, a large you.

So again, we'll continue to explore various ways to give our users continued good user experience. cheers

Thank you. We will take our next question from the line of Alicia Yap from Citigroup. The line is open. Please go ahead. Okay. Hi.

Hi a good evening. What? How did add old he were, what the one he should. one took made who 80 go tw should the fu. Yet hio juical woman youn out you back's that you did give what when turn go gover from time J IC short back I little woman, your Gu some through, but the one that I is some, because whole now hold girl one you turn, your know doau, seems he you.

management has any comments on your plans for the primary Hong Kong listing and if so what is the rough time frame that we should expect that to happen and then if management has any latest update that you could share with us regarding the discussion status between China and US and whether the EDR will indeed be delisted from the US exchange. Thank you.

Thank you, Alicia. Charles, let me answer your question directly in English. So firstly, we are very closely monitoring the situation. As everyone knows, this is a topic, or rather this is a question that's beyond the control of an individual company. It is more of a geopolitical issue, but we remain cautiously optimistic that the U.S. and China, the two largest countries,

countries in the world and the senior leadership will find the common ground of interest. So we think a kind of a hard landing or decoupling between entirely the Chinese companies, there are over 200 Chinese companies listed in the US market. We really don't think a hard landing or decoupling would take place or rather being accelerated.

What we could control though is that we are making very proactive preparation in the event or in a hypothetical scenario. If that extreme situation happened, then Netties will be prepared to continue being a listed liquid asset. As many of you know, we are in fact the second Chinese ADR that is being dual listed in Hong Kong back in 2020.

Although we are currently a second really listed status on Hong Kong Stock Exchange, the conversion between secondary listing to primary listing is more of a technical paperwork or in a joking way, it's more of a lawyer's work. There's no barrier or there's no roadblocks per se and the preparation work, some of them has been undergoing for a while by us. We think if the situation requires

the conversion will be a very swift and smooth process. Thank you Charles. Okay, thank you. We will take our next question from the line of Natalie Wu from Hightown International.

It was how adding and a child from grac to show that you been going to she, how we age now we Don want you. You are you taating the moretal girl and Jo to capacity, to wel one joh children that you should have belief them. From a woman, learn she thaning her, busches in that her, when I didn't your Ho or your tissue coli bomini, an pay sho body her the, the should run followall up. Why to go to know about you, like about you. So when I she got that vudulance, allow So like to go.

events or should we be concerned regarding companies future relationship with Blizzard, especially after the Microsoft deal next year? And then secondly, very quickly follow-up with the infinite log-run mobile game. I was just wondering if the majority of the recent incremental user or booking is generated through the ByteDance game publisher initiative and if yes, how should we think of the related margin profile? Thank you.

one can we poulch more sources in us? So you, the one here to ensure the to IL to lead, to lead us here.

Once again, we will start theMusic Special.

In partort a hur the much to have to things up TL. So you come our Bas, go parting thehe bussure the trans of your familyies. Should a put turther to go to get F? Es not ES?

Let me just translate the answer to the first question. So Natalie, like you said, the case on World of Warcraft is the independent one. So our relationship with Blizzard has been very good. And as you've seen recently, we co-developed and co-published Diablo on the world stage and achieved very positive results. Thank you.

Yeah, Natalie, for your second question on infinite Lagrange, the answer is, the short answer is that we, from time to time, we continuously monitor and explore what we think are effective ways of user acquisition and marketing.

DOLIN, amongst many others, is a conducive marketing channel for certain types of games, maybe not all. For infinite Lagrange, it works for certain types of marketing spending. But all in all, when we look at overall margin profile of a game, obviously we factor in a lot of considerations, marketing channels, marketing expense being one.

But the success or rather the increasing popularity and success of Infinite Lebranche, I don't think it's only dependent on one single source of marketing channel. It played a role, but I think more importantly, the success is underscored by the continuous expansion packs. In particular, the expansion packs that we released in the second quarter was particularly effective.

Got it. Very clear. Thank you. Okay, thank you. We will take our next questions from the line of Charlene Liu from HSBC.

Thank you you you, when interject you, you and the you where when, when you said your sure you go when you create the W woman, cannot you say you like you should. Don't say you DR you, you should. The chan for the transreny woman you have on interntial system can trigger your. See your hand I you will sho your T the other. You see that go ID you when, when you see be of Thank you Y.

Thank you management for giving me the opportunity to ask the question. We understand that the Apple is off to an excellent start recording amazing downloads and growth building figures. How would the management evaluate the Apple's performance so far? And what are your expectations on the longevity of the game? Also, what are the key KPIs for GB tracking mainly? Thank you very much.

results on a worldwide stage and it's a very strong MMO game and like we've done with our many of our legacy games we will continue to issue strong content good expansion packs to serve our global gameplay as well. Thank you. Thank you. Thank you.

Alex Poon from Morgan Stanley . Hello everyone. I'm Alex Poon from Morgan Stanley . I'm Alex Poon from Morgan Stanley .

I have two questions. My first question is related to the monetization design between overseas titles and domestic titles. When Diablo was initially released, we saw some comments from US gamers saying the game design is a bit over monetization. So in future when we design mobile games, are gamers going to get used to this kind of monetization or we need to adjust our monetization?

Or my, no other women, because you know two numbers are when they us city for the fit on you to the usage here. je was what notcean be and brother were make. Why the ones how the popart chan are going to fick out of the ch. I say 2, one champpaign.

The change put wards. But sho you put a mol operating area, could us Sequire selficequper or may duit as a highidy self to the use khacan I change to use have rather mean or may waiting to put on for the tr.

How do you find your tool? Our product is designed to provide strong user experience for all players. We're not targeting only those who pay a lot of money in a game. We want to serve all of our players of all levels equally well. There are many of my friends globally who have all said they've had a great time playing Diablo without having to spend much money. And it is true there are many cultural differences, player differences in different regions around the globe.

and we will endeavor to provide great experience to players in every country, every region of the world. Thank you.

to provide great experience to players in every country, every region of the world. Thank you.

Just where you other they would end. airexport tr young about gte people. A new jous court with sometimes also time people timeon, to conorghter you up the end, up sing my moment you have that.

Q and A.

Thank you. As we mentioned in our prepared remarks, NERICA PlayPoint was launched on Xbox and we joined Xbox Live which brought us lots of incremental uses, particularly console game players. And in terms of PlayStation 5, we're looking at a launch around the end of this year or early next year. Thank you. Thank you very much. I think that ends our call.

Okay, due to time constraints, that concludes today's questions and answer session. At this time, I will turn the conference back to Margaret Shi for any additional closing remarks. Thank you once again for joining us today. If you have any further questions, please feel free to contact us directly or TPG Invest Abulations. Have a great day. Thank you.

to turn constraints that concludes today's questions and answer session. At this time, I will turn the conference back to Margaret Shi for any additional closing remarks. Thank you once again for joining us today. If you have any further questions, please feel free to contact us directly or TPG Inverse Relations. Have a great day. Thank you.

That's the Congress Today Conference. Thank you everyone for your participation.