Q3 2024 NetEase Inc Earnings Call

November 14, 2024

Good day and welcome to the net he's 'twenty 'twenty four third quarter earnings conference call.

Speaker Change: Today's conference is being recorded.

Speaker Change: At this time I would like to turn the conference over to Brandi Piacente. Please go ahead.

Brandi Piacente: Thank you operator. Please note that today's discussion will contain forward looking statements relating to the 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.

Brandi Piacente: Thank you, operator. Please note that today's discussion will contain forward-looking statements relating to the future performance of the company and are intended to qualify for the safe harbor from liability as established by the US 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 this discussion. A general discussion of the risk factors that could affect NetEase's business and 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 in announcements and filings on the website of the Hong Kong Stock Exchange.

Brandi Piacente: Such statements are not guarantees of future performance and are subject to certain risks and uncertainties assumptions and other factors.

Brandi Piacente: Some of these rest are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion.

Brandi Piacente: General discussion of the risk factors that could affect that his business and 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 in announcements and filings on the website of the Hong Kong stock exchange.

Brandi Piacente: The company does not undertake any obligation to update this forward looking information except as required by law.

Brandi Piacente: The company does not undertake any obligation to update this forward-looking information except as required by law. 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 Q3 2024 earnings news release issued earlier today. As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on NetEase's corporate website at ir.netease.com. Joining us today on the call from NetEase's senior management are Mr. William Ding, Chief Executive Officer, Mr. Bill Pang, the Vice President of Corporate Development. I will now turn the call over to Bill, who will read the prepared remarks on behalf of William.

Brandi Piacente: 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 2024 third quarter earnings news release issued earlier today.

Brandi Piacente: As a reminder, this conference is being recorded in addition, an investor presentation and a webcast replay of this conference call will be available on that east corporate website at IR Dot now these dot com.

Speaker Change: Joining us today on the call from that he is the senior management are Mr. William Ding Chief Executive Officer, Mr. Bill paying the Vice President of corporate development I will now I'll turn the call over to Bill who will read the prepared remarks on behalf of William.

Bill Paying: Thank you.

Bill Pang: Thank you, Brandy, 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. At NetEase, we're constantly evolving to ensure the delivery of superior content through innovation across our NetEase family of businesses. During the quarter, we further strengthened our foundation for sustainable long-term growth and achieved total net revenue of RMB 26.2 billion. In our gaming division, our popular titles gained even more traction while newer releases successfully expanded our player community. Total online game net revenue reached around RMB 20 billion. PC games, in particular, registered robust growth, with NetEase net revenue up around 29% year-over-year and 30% quarter-over-quarter. Several of our games celebrated anniversaries in Q3, prompting some of our beloved established titles to set brand-new records and reach new milestones.

Bill Paying: Thank you everyone for participating in today's call.

Bill Paying: Before we begin I would like to remind everyone that all percentages are based on RMB.

And that is we're constantly evolving to ensure the delivery of secure cotton through innovation across our family of businesses.

Bill Paying: Water, we further strengthened our foundation for sustainable long term growth and achieved total net revenue of RMB $26 2 billion.

Bill Paying: Our gaming Division.

Bill Paying: Titles gained even more traction while newer releases successfully expanded our player community.

Bill Paying: Total online games net revenue reached around RMB 20 billion.

Bill Paying: PC games in particular registered robust growth with net revenue up around 29% year over year and 30% quarter over quarter.

Bill Paying: Several of our games celebrated anniversaries in the third quarter property some of our beloved established titles to set brand New records and reached new milestones.

Bill Pang: These achievements highlight our strength in long-term game operations and how we continue to drive game longevity. With operations across decades, our legacy franchises, Fantasy Westward Journey and Westward Journey Online, continue to thrill players with the enduring popularity. In Q3, we brought players a new chapter in Fantasy Westward Journey Mobile set in the Chu Kingdom. Here, new characters and summon beasts offer diverse tactical choices, while a new boss brings more compact challenges, infusing the game with fresh vitality. Additionally, Westward Journey Online II achieved record high quarterly revenue with excitement generated from its anniversary expansion pack. Players eagerly explored new content and joined carnival events in Xi'an, immersing themselves in the grandeur of the Tang Dynasty's Asian capital. This blend of fresh in-game experiences and real-world festivities captured our community's imagination, deepening their connection to the game and driving remarkable engagement.

Bill Paying: These achievements highlights I'll stress long term Gabe operations, and how we continue to drive game longevity.

Bill Paying: With accretion across.

Bill Paying: Our legacy franchisees fantasy westward journey and westward journey online.

Bill Paying: So it's real players with the enduring popularity.

Bill Paying: In the third quarter, we brought player a new chapter in your fantasy westward journey mobile sat in the churches Kingdom.

Bill Paying: Here, new characters as someone bid offer diverse tactical choices, while a new boss brings more complex challenges.

Bill Paying: The game was fresh photography.

Bill Paying: Additionally, westward journey online to achieve record high quarterly revenue with excitement generated from its anniversary expansion pack.

Bill Paying: Players eager to explore new content and join the carnival events.

Bill Paying: Immersing themselves in the grandeur of this home dialysis patient capital.

Bill Paying: This plan of crash in game experiences and real walls to saturday's captured our communities imagination deepening their connection to the game and driving remarkable engagement.

Bill Paying: I don't think it five reached record high revenues for the third consecutive quarter.

Bill Pang: Identity V reached record high revenues for the third consecutive quarter. The game also saw unprecedented DAUs and record high global concurrent online players in Q3. These milestone achievements reflect the success of our comprehensive operational strategy to maximize engagement and player stickiness. Our multifaceted entertainment approach blended trendsetting art design, captivating storyline, resonant IP co-branding events, and the dynamic esports competitions for a wholly immersed brand experience. This holistic strategy not only enhance player engagement, but also establish Identity V as premier competitive platform, offering players around the world an arena to embrace challenges and enjoy fresh content. Naraka: Bladepoint also celebrated its third anniversary in Q3, marking another milestone for this unique action-driven PVP game. Designed to meet the robust and under-addressed demands for action-based competitive play, Naraka: Bladepoint continued to lead innovation in this genre.

Bill Paying: The game also saw unprecedented and.

Bill Paying: And record high global a concurrent online players in Q3.

Bill Paying: This milestone achievements reflect the success of our comprehensive operational strategy to maximize engagement and player stickiness.

Bill Paying: Our multifaceted entertainment approach landed.

Bill Paying: Our designer captivating storyline, Russ on the IP co branding events and the dynamic esports competitions for wholly immersive brand experience.

Bill Paying: This holistic strategy not only has player engagement, but also established added 85, that's a premier competitive platform offering players around the world arena to embrace challenges and enjoy fresh content.

No rock halfway point also celebrated its third anniversary in the third quarter.

Bill Paying: Making another milestone for this unique action driven Pvp game.

Bill Paying: Designed to meet the robust and under address demand for action based competitive play neuro a couple of points continue to lead innovation in this genre.

Bill Paying: With recent introduced the introduction of new heroes maps and the mechanics, the anniversary update switch content spark fresh excitement within the player community driving concurrent players to a new peak.

Bill Pang: With recent introduction of new heroes, maps, and mechanics, the anniversary update's rich content sparked fresh excitement within the player community, driving concurrent players to a new peak. Following the success, co-branding events featuring popular IP like The Lost Tomb and Tomb Raider further amplified enthusiasm. All these activities collectively contributed to record high revenue in Q3. Following its success on PC and console, we extended Naraka: Bladepoint's reach, launching Naraka: Bladepoint Mobile domestically in July to widespread market acclaim. The mobile game ranked number 3 on the iOS top-grossing chart shortly after its release. With its seasonal update in September, Naraka: Bladepoint Mobile returned to the fourth position on the iOS top-grossing chart and was featured as an App Store editor's choice during the summer. In our newer releases, Justice Mobile celebrated its first anniversary at the end of June.

Bill Paying: Following the success co branding events, featuring popular IP like lost to them and the two of them later further amplified enthusiasm all of them.

Bill Paying: These activities collectively contributed to record high revenue in Q3.

Bill Paying: Following a success on PC and console, we extended Morocco place points rich launching the all company pointing to mobile domestic in July to widespread market class.

Bill Paying: The mobile game ranks number three on the L. S top grossing chart. Shortly after its release with seasonal updates in September there were a couple of point mobile returned to the false position on the Alice Top classroom chart and was featured as the App store editors choice during the summer.

Speaker Change: Yeah, all of our newer releases Justice mobile sat appointed its first anniversary at the end of July.

Bill Pang: As a title that pushed the boundaries of traditional MMOs and established a large user base, Justice Mobile continues to drive innovation in more areas. Building on the success of AI-driven NPCs, which created immense player interest with lifelike interactions, players can now access tools to create their own AI companions to explore the vast wuxia world. With overwhelming player enthusiasm, Justice Mobile now accommodates over a million intelligent entities, giving each player a unique and personalized journey and redefining what's possible in mobile MMOs. Similarly, we are fostering players' creativity in Eggy Party to enhance the features that empower creators to explore innovative ideas and receive rewards for their creations. We were thrilled to see a surge in community engagement with many new creators dedicating themselves as full-time map creators. Beyond UGC content, we elevated Eggy Party with inspiring cultural material from external collaborators.

Speaker Change: That's a title that push the boundaries of traditional mmos and establish a large user base.

Speaker Change: Just as mobile continues to drive innovation in more areas.

Speaker Change: Building on the success of a I believe a N P CS which accreted in mass player interest with lifelike interactions players can now access to to create create their own AI companions companions to explore the box, which I won't.

Speaker Change: It was overwhelming player is as Adam just as mobile now accommodates our a beta intelligence entities, keeping each player a unique and personalized journey and redefining what is possible in mobile animals.

Speaker Change: Similarly, we are forcing players creativity Ikea Park.

Speaker Change: Sure. It has the features that empower creators to explore innovative ideas and receive rewards for the equations.

Speaker Change: We were thrilled to see a search committee engagement.

Speaker Change: With many new creators dedicating themselves as full time map graders.

Speaker Change: Beyond UGC content, we out of Asia is actually party with inspiring caught some material from external collaborators.

Bill Pang: In Q3, we strategically partnered with the People's Literature Publishing House, bringing their rich catalog of original works to Eggy Party and encouraging players to explore a world enriched by science and literature. For Racing Master's first anniversary, we launched an exciting annual update, introducing legendary car models, including the Lamborghini Reventón and the Mazda RX-7, bringing players even more dedicated and responsive driving experiences. The update also features several highly acclaimed new maps, each offering a unique racing experience, from the renowned pivoting track like Nürburgring to an exotic gold rush journey set in the desert of Colorado Plateau. Through our dedicated operational efforts, Racing Master sustained strong popularity with our player community, solidifying its market position in the racing genre. As we continue to diversify our portfolio across various genres, we pave the way to extend the success of our established titles into new regions.

Speaker Change: In the third quarter, we strategically partnered with the peoples Detroit Your publishing house cleaning of their reach catalog of original works Jackie Parkey and encouraging players play school a walled in reached by size and the literature.

Speaker Change: [noise] for reaching Masters first anniversary.

Speaker Change: We launched an exciting updates introducing legendary car models, including the Lamborghini Robinson and the master silver.

Bringing players either more dedicated and responsive driving experiences.

Speaker Change: The update also features several highly acclaimed new maps each offering a unique recent experience.

Speaker Change: The reading on the pivoting track.

Speaker Change: Like how Renaissance to ask topic go to Ross journey Saturday in the desert of Colorado Plateau.

Speaker Change: Sure our dedicated operational efforts raising them off to sustain a strong popularity we saw player community solidified its market position in the way you're seeing it on there.

Speaker Change: As we continue to diversify our portfolio across various genres would pave the way to extend the success of our established titles into new regions.

Bill Pang: In August, we brought Racing Master to Japan, where it quickly topped the App Store and Google Play free chart and stayed in the top 7 of the iOS downloading chart, highlighting its appeal to local players. In addition to Racing Master, we are gearing up to expand several of our games' international footprint. Justice Mobile will be hitting the Hong Kong, Macau, and Taiwan market in November, while Dunk City Dynasty is preparing for global release. On top of our expansion plans for these titles, we are advancing our robust game pipeline with plans to release several highly anticipated titles in coming months. Our eagerly awaited open-world action-adventure RPG, Where Winds Meet, is on track for domestic release in December. This gameplay is designed to meet diversified player demands, offering both single-player and multiplayer modes across PC and mobile platforms.

Speaker Change: In August we brought leasing master to Japan, where a quickly talk the app store and Google play sweetheart and stays in the top seven after hours downloading chart.

Speaker Change: Lighting is appeal to local players.

Speaker Change: Addition to raising monster, we are gearing up to expand several of our games international food plants.

Speaker Change: Jonathan just mobile will be heating in the Hong Kong, Macau and Taiwan market in November well don't see dynasty is prepare for global release.

Speaker Change: On top of all of our expansion plans for this titles, we are advancing our robust game pipeline with class to release several highly anticipated titles in coming months.

Speaker Change: Well, we're eagerly awaited Fulton would accident adventure RPG, where wings meats.

Speaker Change: It's on track.

Speaker Change: I think released in December.

Speaker Change: This gameplay is designed to meet diversified player demand offering both single player and multi player malls across PC and mobile platforms.

Bill Pang: With top-notch graphics utilizing ray tracing technology, Where Winds Meet is gaining increasing attention from the gaming community as we get closer to the launch date. The superhero team-based PVP shooter game, Marvel Rivals, is slated for global release on 6 December 2024. As part of the Marvel Rivals global launch campaign, Marvel just announced a special season on 11 November 2024 in collaboration with multiple popular titles, including Fortnite, MARVEL Puzzle Quest, MARVEL Future Fight, and MARVEL SNAP, creating a Marvel rivalry in the season for fans worldwide and promising a fantastic celebration across games. We're also excited about FragPunk, a fast-paced five versus five hero shooter game. Close beta testing in October attracted over 1 million applicants, and with its distinctive card mechanics and a vibrant carnival-inspired art design, ranking as the top trending upcoming game in Steam's free-to-play section.

Speaker Change: It was tough soft traffic utilizing retracing technology, where it meets its gaining.

Speaker Change: Increasing attention from the gaming community as we get closer to the launch date.

Speaker Change: The superhero team based Pvp shooter game Marvel rivals is slated for global release on December six.

Speaker Change: Part of the Marvell arrivals global launch campaign, Marvel just announced a special season on November 11th in collaboration with multiple popular titles.

Speaker Change: <unk> Fortnite mobile puzzle crowd.

Speaker Change: Future fights kind of marble snap, creating a mobile arrival seem to season for fast worldwide and promising a fantastic celebration across games.

Speaker Change: We're also excited about frac pump, a fast pace five versus five hero shooter can.

Speaker Change: Close beta testing in October attracted over 1 million Africans and with its distinctive card mechanics, and a vibrant carnival inspired art design.

Speaker Change: U S.

Speaker Change: Tal <unk> upcoming game is teams to free to play section.

Bill Pang: Building on this momentum, FragPunk's first testing phase in China will begin this December, aiming to capture the interest of an even broader audience and further showcase its unique appeal. We are also planning to start a round of regional offline technical tests soon for our eagerly anticipated open-world adventure title, Project Mugen. After another years of intense development and refinement, Project Mugen is ready to captivate ACG fans with a fresh urban exploration experience. Next up, we are thrilled to announce our latest product, Marvel Mystic Mayhem. Set in the heart of the Marvel Universe. In this team-based tactical RPG, players will join forces with beloved superheroes as they clash with the sinister forces of supervillain Nightmare and bear witness to the inner fears of the iconic heroes and villains throughout their journey.

Speaker Change: Building on this momentum Frac pumps first testing phase in China will begin this December aiming to capture the interest to offer an even broader audience and to further showcase its unique appeal.

We are also planning to start a round of regional offline technical task soon followed eagerly anticipated Open award I've entered hydro product.

Speaker Change: After another years of intensity vitamins and refinements project in Logan is ready to calculate a C. G fast with the fresh ore about exploration experience.

Speaker Change: Next up we're thrilled to announce our latest product.

Marvel mistake made him.

Speaker Change: Sat in the heart.

Speaker Change: Marvel Universe.

Speaker Change: And this team based technical RPG players.

Speaker Change: Players, we're drawing force with beloved superheroes Africa C class with a C. This or forced off supergrid supervillain nightmare and bear witness to.

Speaker Change: So the in their fears of the iconic heroes and billions throughout their journey.

Speaker Change: In November we started close beta testing for Destiny license. The first mobile game the destiny franchise royalties in the intriguing that's the universe. That's the rising will offer a brand new adventure set in the alternative pipeline.

Bill Pang: In November, we started closed beta testing for Destiny: Rising, the first mobile game in the Destiny franchise, rooted in the intriguing Destiny universe. Destiny: Rising will offer a brand-new adventure set in the alternative timeline. Featuring a wide array of characters and various game modes, Destiny: Rising introduce new ways to play Destiny. Beyond our in-house developed games, the return of Blizzard games in China has been met with unprecedented enthusiasm from the gaming community. To ensure we meet expectations, we stay closely attuned to the voice of Chinese players. This commitment has rekindled the loyalty of longtime fans eager to return to Azeroth, and also captivated new players eager to embark on epic adventures. We are seeing strong player engagement.

A wide area of characters and various game mode. That's the rising introduce new ways to play basketball.

Speaker Change: Beyond our in house developed games, the return of Blizzard games in China as the matter with him present intent is usually have them from the gaming community.

Speaker Change: To ensure we meet expectations, we stay closely attuned to the ways of Chinese players.

Speaker Change: This commitment as we kingdom loyalty of longtime fast eager to return to ask Ross and also captivated players eager to embark on epic Adventures.

Speaker Change: We are seeing strong player engagement following the relaunch of world of Warcraft saw a 50% increase in data active players as compare to the level before the shutdown while hearthstone.

Bill Pang: Following their relaunch, World of Warcraft saw a 50% increase in daily active players as compared to the level before the shutdown, while Hearthstone achieved over 150% growth. Our partnership with Blizzard, built on mutual trust and respect, and supported by a dedicated fan community, has delivered results far exceeding expectations from both sides. Whether self-developed or in partnership, we always strive to bring players new, exciting gaming experiences. We're executing this strategy at a very high level, bringing more games and content to the domestic market while expanding our global reach. Now let's move to Youdao. During Q3, we significantly improved our profitability, with income from operations exceeding CNY 100 million. This marks our first profitable Q3 and set a new record for quarterly operating profit, a testament to our commitment to high-quality growth.

150% growth.

Speaker Change: Our partnership with Blizzard.

Speaker Change: On mutual trust and respect and supported by a dedicated fan community has to leave or resolved far exceeding expectations from both sides.

Speaker Change: Whether it's self developed or in partnership we always strive to bring players new exciting gaming experiences.

Speaker Change: We're executing this strategy at a very high level, bringing more games and content to the domestic market, while expanding our global reach.

Speaker Change: Now, let's move to Utah.

Speaker Change: During the third quarter, we significantly improved our profitability with income from operations exceeding 100, RMB 100 million RMB. This marks our first profitable quarter and set new record for quarterly operating profit.

Speaker Change: A testament to our commitment to high quality growth.

Bill Pang: For digital content services, we have remained committed to enhancing the product experience. The Youdao Lingshi Intelligent Learning System expanded its knowledge category to nearly 40,000 videos across four difficulty levels, providing comprehensive coverage of essential topics throughout students' learning journey. Additionally, Youdao Literature introduced AI-powered writing enhancement to help students level up their written work, resulting in an increased user engagement. We also maintain strong growth momentum in AI-driven education services, fueled by our AI-powered tool, which enhanced functionality and user appeal. For Youdao Dictionary, we launched simultaneous interpretation powered by our large language model, Zi Yue. It achieved over 4 million users in the Q3, boasting exceptional accuracy and fluency. Hi Echo has also gained increasing popularity. A leading AI application ranking chart in China shows Hi Echo as one of the most popular domestic apps, highlighting its high user number and retention rate.

Speaker Change: For digital content services, we have remained committed to enhancing our product experience.

Speaker Change: It would all be in touch and learning system expanded acknowledged category to nearly 40000 videos across 40, because he levels, providing comprehensive coverage of essential topics throughout students' learning journey. Additionally.

Speaker Change: Additionally.

Speaker Change: You would at least for sure introduced AI powered writing husband to help students.

The original work, resulting in the increased user engagement.

Speaker Change: We also maintained strong growth momentum in AI, driven supervision services fueled by our AI powered to.

Speaker Change: Which enhanced functionality and user appeal.

Speaker Change: For you without dictionary, we launched simultaneous interpretation powered by our large language models against.

Speaker Change: It achieved over 4 million users in the database called quarter.

Quarter, boasting exceptional accuracy and fluency.

Speaker Change: Hi, Echo has also gained increasing popularity.

Speaker Change: Our leading application banking charter in China shows our ankle that's one of the most popular domestic apps highlighting its high user number and retention rates.

Speaker Change: Online marketing services saw a record wells as well.

Bill Pang: Online marketing services saw rapid growth as well. Our expansion into new sectors and advanced data applications to optimize ad performance led to revenue from real-time API doubling year-over-year. Additionally, key opinion leader advertising was a key growth engine for revenue in Q3, with outbound advertising demand surging in several sectors. The smart devices segment saw solid year-over-year growth, showcasing our commitment to product innovation. With the launch of X7 Pro, the latest iteration of our flagship digital dictionary pen, we introduced the industry's first learning device capable of offline large language model translation. The X7 Pro also boasts robust accuracy better than online NMT. Overall, customer feedback, our new products and their innovative upgrades has been excellent. This year's product launches, mainly the X7 and X7 Pro, were key in driving Q3's over 50% year-over-year net revenue growth for our digital dictionary pen series.

Speaker Change: Our expansion into new sectors, and our best data applications to optimize our performance that's revenue from real time, API doubling year over year.

Speaker Change: Additionally, key opinion leader out of high School was a key growth engine for revenue in Q3.

Speaker Change: It was all about advertising be man searching in several sectors.

Speaker Change: The smart devices segment saw solid year over year gross showcasing our commitment to product innovation.

Speaker Change: With the launch of X seven pro the latest iteration of our flagship digital tactics have already passed.

Speaker Change: The industry's first learning device capable all offline large language motto translation.

Speaker Change: The X seven pro also post robust accuracy graduate that all along a M T.

Speaker Change: Overall customer feedback, our new products and their innovative upgrades has been excellent.

Speaker Change: This year's product launches, mainly the ax seven and X seven troll were key in driving Q3, it's over 50% year over year net revenue growth for all with digital dictionary passed serious.

Speaker Change: Turning to him that he's called music during the third quarter, we continued to propel our quality abandonment cross our music centric ecosystem broadening our subscriber base and leading to a healthy revenue growth momentum for online music.

Bill Pang: Turning to NetEase Cloud Music. During Q3, we continued to propel our quality development across our music-centric ecosystem, broadening our subscriber base and leading to healthy revenue growth momentum for online music. To further enrich our content ecosystem, we continuously expand our music offerings to meet diverse audience demand, especially trending interest from younger generation. We reinforce our partnership with various music labels in Q3. Building on earlier collaboration with Kakao Entertainment and JYP Entertainment, we reintroduced music from CJ ENM during Q3, enhancing our K-pop library with popular original soundtracks from Korean dramas, and performance show tracks. We are also amplifying the impact of our in-house music, fostering a unique and differentiated content ecosystem. Multiple in-house tracks have gone viral in our community and beyond.

Speaker Change: To further enrich our content ecosystem, we continuously expand our music offerings to meet diverse audience female, especially trending interest from younger generation.

Speaker Change: We reintroduced our partnership we will reinforce our partnership with various music labels in the third quarter.

Speaker Change: Beauty are already a cooperation with entertainment and a G Y P Entertainment.

Speaker Change: We reintroduced music from C. J E M. During the third quarter enhancing our K pop library with popular original soundtracks from Korean drama and performance showed tracks.

Speaker Change: We're also amplifying the impact of our in House music.

I'll say, a unique and differentiated content ecosystem.

Multiple inhouse tracks African barrel, our community and beyond.

Bill Pang: For example, our duet version of 大喜, which blends Cantonese and French with a chill vibe, inspired a large number of UGC content featuring on the track. Other popular sounds, each with a unique style, are also gaining significant popularity. We continue strengthening our music-focused monetization capabilities, providing distinctive features that unleash creativity and express individuality. The AI-powered tool that we recently launched allow users to recreate sounds with their own voices. We also offer a tool for members to customize their music playing interface with their chosen background and vinyl players, catering to users' personalized interests. The increasing accessibility to individual expression through customization and content creation continues to drive engagement on our platform.

Speaker Change: For example, our first shelf stacker, which plans Cantonese and French what's it sure why he's fired a large number of UGC content featuring arbitrage.

Speaker Change: Other popular songs.

Speaker Change: Each with a unique style are also gaining significant popularity.

We continue strengthening our music focused monetization capabilities, providing distinctive features that unleash creativity and express computer altitude.

Speaker Change: The AI empowered to.

Speaker Change: We recently launched allow user to recreate yourself, where there aren't wise.

We also offer a two four members to customize their music playing interface with their colson background I'm by no player.

Speaker Change: Treating to users personalized interest.

Speaker Change: The increasing accessibility to individuals expression.

Speaker Change: Through a consolidation and constant accretion continues to drive engagement on our platform.

Bill Pang: In broadening membership privileges for our subscribers, our collaboration with popular IP provides exclusive skins and decorations to our members that our members love, prompting robust user engagement and boosting our user commercialization potential. Taking a look at Yanxuan, we continue to strengthen its brand equity within private label consumer market. We achieved notable growth in GMV across key categories by consistently and successfully introducing products and expanding sales through our omni-channel strategy. In Q3, sales of pet products and household cleaning items grew by double digits year over year. Notably, to further strengthen our competitiveness in the pet food sector, we established a dedicated factory in partnership with a leading pet food manufacturer. This collaboration significantly improved our ability to deliver high quality pet food on a larger scale, reinforcing Yanxuan's position in this fast-growing category.

Speaker Change: Rondon membership privileges call, a subscriber or a collaboration with popular IP provides exclusive scans and that cliches called lumber.

Speaker Change: That our members love, prompting robust user engagement and boosting our commercialization potential.

Speaker Change: Yeah.

Taking a look at <unk>, we continue to strengthen its brand equity with some private label consumer market.

Speaker Change: We achieved notable growth in GM, we cross key categories by consistently are successfully introducing product and expanding sales through our omni channel strategy.

Speaker Change: In the third quarter sales of past products and household cleaning items grew by double digits year over year, notably to further strengthen our competitiveness in the pet food sector.

Established a dedicated factory in partnership with a leading pet food manufacturer.

Speaker Change: This collaboration significantly improve our ability to deliver high quality pet food on a larger scale reinforcing <unk> position in this fast growing category.

Speaker Change: Yeah.

Bill Pang: Innovation is the heart of our NetEase family of businesses and a core component of our competitive edge, along with deep gaming operating capabilities and a commitment to quality and user experience. We'll continue to bring our community impactful games, products, and services that create value for our loyal community and meaningful returns to our shareholders. That concludes William's comments. I will now provide a brief review of our 2024 Q3 financial results. Given the limited time on today's call, I'll present some abbreviated financial highlights. We encourage you to read through our press release issued earlier today for further details. As a reminder, all amounts are in RMB unless otherwise stated. Total net revenue for the Q3 were RMB 26.2 billion, or $3.7 billion, representing a 3% increase quarter-over-quarter.

Speaker Change: Innovation is the heart of our <unk> family of businesses and a core component of our competitive edge along with deep gave me operating capabilities and a commitment to quality and user experience.

Speaker Change: We will continue to bring our community impactful games products and services that create value for our loyal community added meaningful returns to our shareholders.

Speaker Change: That concludes William's comments.

Speaker Change: I will now provide a brief review of our 'twenty 'twenty four third quarter financial results given the limited time on today's call I'll present, some abbreviated financial highlights. We encourage you to read through our press release issued earlier today for further details as a reminder, all amounts are in RMB.

Speaker Change: Unless otherwise stated.

Speaker Change: Total net revenue for the third quarter were RMB 26.2 billion was $3 7 billion in U S dollars, representing a 3% increase quarter over quarter.

Bill Pang: Meanwhile, current contract liabilities were RMB 15.5 billion, up 14% quarter-over-quarter. Total net revenues from our games and related VAS were RMB 20.9 billion, up 4% quarter-over-quarter. Specifically, net revenues from online games were RMB 20.2 billion, up 5% quarter-over-quarter. This growth was primarily driven by increased revenue contributions from key PC games such as World of Warcraft and Naraka: Bladepoint, as well as mobile games like Identity V and the recent launch of Naraka: Bladepoint Mobile. Notably, net revenue from our PC games accounted for approximately 29.2% of our total online game revenue, representing an increase of 30% quarter-over-quarter and an increase of 29% year-over-year.

Speaker Change: Meanwhile, current contract liabilities were RMB, 15, 5 billion up 14% quarter over quarter.

Speaker Change: Total net revenues from our games and really to be as well on the 20th Nike, they're up 4% quarter over quarter.

Speaker Change: Specifically net revenues from online games were RMB 22 billion up 5% quarter over quarter.

Speaker Change: This growth was primarily driven by increased revenue contributions from key P. C games, such as water World class on but there are a couple of points as well as mobile games like attitude of five and the recent launch of a breakpoint mobile.

Speaker Change: Notably net revenue far more PC games accounted for approximately 20 point 29, 2% of all.

Speaker Change: Our total online games revenues.

Representing an increase of 30% quarter over quarter, and an increase of 29% year over year.

Bill Pang: On a year-over-year basis, total net revenues from games and VAS declined by 4%, mainly due to adjustments in our CC live streaming service. These changes in turn enhanced our margin profile and contributed to long-term business sustainability. Excluding the impact of these adjustments, our online games revenue remained relatively stable on a year-over-year basis, with 1% decrease. Youdao's net revenue were RMB 1.6 billion, a year-over-year increase of 2%, primarily due to the increased revenue contribution from Youdao's online marketing services. The 19% quarter-over-quarter increase, driven mainly by higher net revenues from the sales of smart devices and learning services.

Speaker Change: On a year over year basis.

Speaker Change: Total net revenues from games MBS declined by 4%, mainly due to adjustments in our D C that streaming service.

Speaker Change: This changes in turn enhance our margin profile, Andrew contributed to long term business sustainability.

Speaker Change: Excluding this the impact of this adjustment our online games revenue remained relatively stable on a year over year basis with 1% decrease.

Speaker Change: You would also net revenue were RMB, one 6 billion a year over year increase of 2% primarily due to the increased revenue contribution from your online marketing services.

Speaker Change: And a 19% quarter over quarter increase driven mainly by higher net revenues from the sales of smart devices and learning services.

Bill Pang: NetEase Cloud Music's net revenue were RMB 2 billion, a 1% increase compared to the same period last year, primarily due to higher net revenue from membership subscriptions and a 2% quarter-over-quarter decline due to a decline in net revenues from NetEase Cloud Music's social entertainment services. Net revenue for innovative businesses and others were RMB 1.8 billion, a 10% decrease compared with the same quarter of 2023, mainly due to the decrease of advertising revenues of our news related products and several other businesses, including within the segment. The 14% quarter-over-quarter decrease due to the effect of seasonality on Yanxuan's sales. The total gross profit margin was 62.9% in Q3, compared with 62.2% for the same period in 2023. Looking at our Q3 margin in more detail.

Speaker Change: That is called music net revenue were RMB 2, billion% to 1% increase compared to the same period last year, primarily due to a higher net revenue from membership subscription and a 2% quarter over quarter decline due to a decline in net revenues from that he calls musics social endo.

Speaker Change: Turning to services.

Speaker Change: Net revenue for innovative businesses and others were RMB, one 8, billion% to 10% decrease compared with the same quarter of 2023, mainly due to the decrease of advertising revenues.

Speaker Change: Our newest related products and several other businesses, including within the segments and the 14% quarter over quarter decrease due to the effect of seasonality on <unk> sales.

Speaker Change: The total gross profit margin was 62, 9% in the third quarter compared with 62, 2% for the same period in plenty of plenty sweet.

Speaker Change: Looking at our third quarter margin in more detail.

Speaker Change: Gross profit margin was 68, 8% for our games and really be as compared with six 9% from the same period last year. The year over year decrease was mainly attributable to changes in product mix.

Bill Pang: Gross profit margin was 68.8% for our games and related VAS, compared with 69% in the same period last year. The year-over-year decrease was mainly attributable to changes in product mix. Gross profit margin for Youdao was 50.2%, compared with 55.9% in the same period last year. The year-over-year decrease was primarily due to the decreased net revenues from learning services. Gross profit margin for NetEase Cloud Music reached 32.8% versus 27.2% in the same period last year. The margin improvement primarily resulted from increased net revenue from membership subscriptions and continued cost optimization measures. For innovative businesses and others, gross profit margin was 37.8%, compared with 27.3% in Q3 2023.

Speaker Change: Gross profit margin for your adult was 52% compared with 55, 9% in the same period last year the year over year decrease was primarily due to the decrease in revenues from learning services.

Speaker Change: While its profit margin for that is called music reached such a two 8% versus 27, 2% in the same period last year. The margin improvement primarily resulted from the increase in net revenue from membership subscriptions and continued cost optimization measures.

Speaker Change: Our innovative business businesses and others gross profit margin was 37, 8% compared with 27, 3% in the third quarter of 2023.

Bill Pang: The year-over-year increase were mainly due to increased gross margin, gross profit margin from several other businesses included within the segment. Total operating expenses for Q3 were RMB 9.3 billion, or 35.6% of our net revenues. Taking a closer look at our cost composition. Our selling and marketing expenses as a percentage of total net revenue were 14.5%, compared with 13.1% in the same quarter last year. The increase was primarily due to higher marketing expenditures associated with online game services for new game launches. Our R&D expenses as a percentage of total net revenue were 16.9% in Q3, compared with 15.9% for the same period last year.

Speaker Change: Year over year increase were mainly due to increased gross margin gross profit margin from several other businesses included within the segments.

Total operating expenses for the third quarter were RMB nine 3 billion.

Speaker Change: Was 35, 6% of our net revenues taking.

Speaker Change: Taking a closer look at all cost compensation.

Speaker Change: Our selling and marketing expenses as a percentage of total net revenue was 14, 5% compared with 13, 1% in the same quarter last year. The increase was primarily due to higher marketing expense expenditures associated with online game services for new game launches.

Speaker Change: Our R&D expenses as a percentage of total net revenue was 16, 9% in the third quarter compared with 15, 9% for the same period last year, we remain committed to investing into content creation and product development to keep our product and content at the forefront of the industry.

Bill Pang: We remain committed to investing into content creation and product development to keep our product and content at the forefront of the industry. We believe that our investment in R&D will remain a key catalyst for future growth over the longer term. The effective tax rate was 16.1% for Q3. As a reminder, the effective tax rate is presented on an accrual basis depending on the applicable policies and our operations. Our non-GAAP net income attributable to shareholders for Q3 totaled RMB 7.5 billion or $1.1 billion. Non-GAAP basic earnings per ADS for Q3 were $1.67 or $0.33 per share.

We believe that our investments in R&D will remain a key catalyst for future growth over the longer term.

Speaker Change: The effective tax rate was 16, 1% for the third quarter as a reminder, the effective tax rate is presented.

Speaker Change: Accrual basis, depending on the policies and our operations.

Speaker Change: Our non-GAAP net income attributable to shareholders was sort of a quarter.

Speaker Change: Total RMB, seven 5 billion or $1 1 billion U S farce.

Speaker Change: non-GAAP basic earnings per quarter.

Quarter one.

Speaker Change: $1 67 status you guys daughters, well for 33.

Speaker Change: Since U S dollars per share.

Bill Pang: Our cash position remains robust, with net cash of approximately RMB 120 billion as of 30 September 2024, compared with RMB 110.9 billion at the end of 2023. In accordance with our dividend policy, we are pleased to report that our board of directors has approved a dividend of $0.087 per share, or $0.435 per ADS for Q3. We continue to conduct our share buyback during Q3. We repurchased shares in the amount of $543 million, marking a 98% increase from the previous quarter.

Speaker Change: Additionally, our cash position remains robust.

Speaker Change: With net cash of approximately RMB 120 billion.

As of September searches 2024, compared with RMB 110 might be at the end of 2023.

In accordance with our dividend policy. We are pleased to report that our board of directors I support the dividend.

Speaker Change: 8.7, since you guys dollars per share or 43.5 SaaS.

Speaker Change: As far as per <unk> for the third quarter.

Speaker Change: Lastly, we continue to conduct our share buyback during the third quarter.

Speaker Change: We repurchased shares in the amount of.

Speaker Change: 543 million U S office market, 98% increase from the previous quarter.

Bill Pang: Under our current $5 billion share repurchase program, which started in mid-January last year, we have repurchased approximately 18 million ADSs as of September 30, 2024, for a total cost of approximately $1.6 billion. Thank you for your attention. We would now like to open the call to your questions. Operator, please.

Speaker Change: Under our current 5 billion U S dollar share repurchase program, which started in mid January last year, we have repurchased approximately $18 million as of September 30th 'twenty 'twenty four for a total cost of approximately $1 6 billion in U S dollars.

Speaker Change: Thank you for your attention we will now like to open the call to your questions operator. Please.

Speaker Change: Thank you if you wish to ask a question. Please press star one on your telephone and wait.

Operator 1: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you're on a speakerphone, please pick up the handset to ask your question. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Please limit your questions to one at a time. If you wish to have a follow-up question, please rejoin the queue. Your first question comes from Lincoln Kong with Goldman Sachs. Lincoln Kong, your line is open.

Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you're on a speakerphone, please pick up the handset to ask your question. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Please limit your questions to one at a time. If you wish to have a follow-up question, please rejoin the queue. Your first question comes from Lincoln Kong with Goldman Sachs. Lincoln Kong, your line is open.

Speaker Change: Your name to be an app.

Speaker Change: If you wish to cancel your request. Please press Star then two.

Speaker Change: If you're on a speakerphone please pick up the handset to ask your question.

Speaker Change: For the benefit of options and so on todays call. Thank you. If you ask your questions Robinson I'm Chinese please keep.

Speaker Change: Keep your questions from English.

Speaker Change: Please limit your questions to one and a five.

Speaker Change: I have a follow up question. Please rejoin the queue.

Speaker Change: Your first question comes from linking Hong with Goldman Sachs.

[noise] Paul Your line is open.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: [noise] pizza.

Speaker Change: Okay.

Lincoln Kong: 可以听见我？可以，可以听见我。谢谢关心，感谢我提问了。那我这边可能是有两个问题吧。第一个的话，这个想问一下这个燕云十六声，就这个游戏现在PC和手游端目前这个上线的时间表是怎么样的？那我们之前也是看到这个测试上的一些玩家的反馈，关于这个游戏的定位，单机和MMO的玩法怎么去融合，怎么样去更好地设计变现。那经过这段时间，不知道这个游戏有没有什么新的更新或者调整。 Thank you very much for taking my question. My first question is about Where Winds Meet. What's the latest launch schedule for this game's PC and the mobile version? Based on our last testing feedback, there are some user feedback around the positioning of this game, how to better integrate the single player model versus the multiplayer one, and how to design the monetization here. Are there any updates or progress of this game lately? Thank you.

Speaker Change: Uh huh.

Sure.

Speaker Change: Uh huh.

Speaker Change: What do you want to know.

Speaker Change: What can I say.

Speaker Change: P J.

<unk> Shao <unk> sure sure.

Speaker Change: <unk>.

Speaker Change: Typically she <unk>, how should we hold one would you not take us on CNS agenda I'll show it to me on that no woman, Japan, Yes. It kind of tells you that social Chinese you went out a fan coil coatings you negotiate it anyway.

Speaker Change: MMO at Atlanta to mature them cool, that's amount chicken Hawks, Japan as yet no.

I think what Jim said I'll take that you'll see you'll know some machine that Jason was that total.

Speaker Change: So what's the find yourself. Thank you mentioned before taking my question.

Speaker Change: So my first question is about to where we meet.

Speaker Change: So what's the latest launches scheduled for this game in PC and the mobile version.

Speaker Change: Based on last statistic feedback that there are some user feed power wrong.

Assisted living off the scheme, how to better integrate go pear motto versus system ought to play and how to design didn't want the monetization here so any of the pace of progress escape.

Speaker Change: Lately. Thank you.

Speaker Change: Yeah.

Speaker Change: Okay.

[Company Representative 1] (NetEase): 我来回答一下这个问题。英灵即将于十二月底上线，PC为先，移动端会略微晚于PC，不会延迟太久。目前我们进行的是最后的优化和适配工作，我们也希望能够触达更广泛的用户群。关于定位和玩法的问题，英灵的核心玩法始终都定义为高质量的开放世界和轻度社交的融合，游戏会持续地聚拢对画面品质、代入感、开放世界探索和更自由休闲的态度关系为主的用户群。我们游戏分为单人和组队两种模式，玩家会体验精心设计的单人探索内容，并且以PVE的玩法作为间隔期主要的内容。在付费模式上，我们是以分层级的多梯度的外观付费为主，BP等小额的功能类付费为辅。我们希望以此来保证游戏在更长线的时间上能够缓释重度养成和付费的压力，形成更健康的社交生态和更沉浸、轻松、更易追赶和回流的社交氛围，以此来赢得更好的长期表现。谢谢。

[Company Representative] (NetEase): 我来回答一下这个问题。英灵即将于十二月底上线，PC为先，移动端会略微晚于PC，不会延迟太久。目前我们进行的是最后的优化和适配工作，我们也希望能够触达更广泛的用户群。关于定位和玩法的问题，英灵的核心玩法始终都定义为高质量的开放世界和轻度社交的融合，游戏会持续地聚拢对画面品质、代入感、开放世界探索和更自由休闲的态度关系为主的用户群。我们游戏分为单人和组队两种模式，玩家会体验精心设计的单人探索内容，并且以PVE的玩法作为间隔期主要的内容。在付费模式上，我们是以分层级的多梯度的外观付费为主，BP等小额的功能类付费为辅。我们希望以此来保证游戏在更长线的时间上能够缓释重度养成和付费的压力，形成更健康的社交生态和更沉浸、轻松、更易追赶和回流的社交氛围，以此来赢得更好的长期表现。谢谢。

Speaker Change: Hello.

Speaker Change: Got it.

Speaker Change: Oh.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Great. Thank you.

Speaker Change: This.

Speaker Change: This is rahul thank you Pablo.

Speaker Change: See you on the phone.

Speaker Change: Thank you.

Speaker Change: When.

Yeah, you know who you are.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Oh sure.

Speaker Change: Yes, hi.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Why now.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: P J.

Speaker Change: Okay.

Speaker Change: The needle absolutely Moshe well listen to Houston.

Speaker Change: Keeping with the Whitehall facility.

Speaker Change: Where they're going to live with.

Speaker Change: Well Miss you all used to that Belgium, you'll see second half finished shall we go to questions.

Jason: You can go to Kim commentary, what kind of changes you don't go ahead Jason.

Jason: Finally slide 20.

Speaker Change: Oh yeah.

Yeah.

Speaker Change: Okay.

Bill Pang: Okay, 好. Yeah. I will do the translation. First of all, Where Winds Meet, you know, PC is slated to launch by the end of December, and the mobile will be slightly later than that, but the gap won't be too long. Now we're doing the final stage, you know, optimization to make sure that the game, you know, could be played on as many devices as possible. That's our goal now. Regarding your question about the positioning of the game, the core gameplay, you know, is positioned to provide high quality open world exploration and also casual social experiences in the open, you know, background kind of world. We're aiming at engaging players who are looking for, you know, high fidelity, immersive experience, open world exploration as well as relaxing, you know, casual social gameplay. About the single player versus multiplayer mode, we hope, in each of our expansions, players could start with single player content to enjoy that content first, and over time smoothly translate into multiplayer mode and enjoy social gaming, with a period between expansion packs. That's the plan. In terms of monetization, we'll focus on a tier based cosmetic offerings alongside other lighter, you know, monetization models like Battle Pass. We want to make sure that our game could alleviate the pressures from, you know, complicated, traditional cultivation and monetization, fostering a healthier social ecosystem and relaxed social environment where players can immerse themselves, with light effort to match up with other players, and lower barriers for the, you know, all players to return to the game. We aim to achieve a better, you know, operation performance in the long term. That's our goal. Thank you for your question.

Thank you.

Speaker Change: I went through the translation first of all with me. It's P. C. A slate are.

Speaker Change: To launch by the end of.

Speaker Change: December.

Speaker Change: The mobile will be slightly.

Later than that but the cap won't be too long and now we're doing it.

Final stage, you know optimization to make sure that again, you know it could be a play it as many devices as possible that's all going out.

Speaker Change: And regarding your question about the positioning all began.

Speaker Change: The core game play.

Speaker Change: <unk> is positioned to provide high quality open water exploration and also casual social experiences in the open.

Background kind of world.

Speaker Change: Aiming at engaging players who are looking for high fidelity.

Speaker Change: Mercy shall experience.

Speaker Change: And what exploration, that's west relaxing casual social gameplay.

Bill Pang: About the single player versus multiplayer mode, we hope, in each of our expansions, players could start with single player content to enjoy that content first, and over time smoothly translate into multiplayer mode and enjoy social gaming, with a period between expansion packs. That's the plan. In terms of monetization, we'll focus on a tier based cosmetic offerings alongside other lighter, you know, monetization models like Battle Pass. We want to make sure that our game could alleviate the pressures from, you know, complicated, traditional cultivation and monetization, fostering a healthier social ecosystem and relaxed social environment where players can immerse themselves, with light effort to match up with other players, and lower barriers for the, you know, all players to return to the game. We aim to achieve a better, you know, operation performance in the long term. That's our goal. Thank you for your question.

Speaker Change: Oh about the single player versus multiplayer mode, We hope.

Speaker Change: Every single each of our expansions.

Speaker Change: To start with single player content to enjoy that content.

And over time small see translates into multiplayer bolt and enjoy social gaming.

With the period between expansion packs that's the plan.

Speaker Change: In terms of monetization.

Speaker Change: We will focus on a chair base cosmetic offerings alongside with other lighter monetization models like a battle cost.

I want to make sure that our game.

Speaker Change: Alleviate the pressures from complicate the traditional complicated cultivation and monetization are closer to a healthier social ecosystem and relax social environment, where players can immerse themselves.

With light effort match up with other players and lower Paris.

Speaker Change: Players three tenths of a cure.

Speaker Change: We aim to achieve a better you know.

Speaker Change: Operation performance in the long term, that's how recall.

Speaker Change: Thank you for your question.

Lincoln Kong: 好，谢谢。那我这边第二个问题是关于逆水寒手游和蛋仔这边，就是这两个游戏最近大家也看到一些第三方的数据，流水这边是有一些压力，我不知道就是公司内部现在看到的这个状况是怎么样的，对后续的这些运营策略，可不可以有更多的分享，更多的大家比较关心，就是有哪些方向可以去拓展或者延长这两款游戏的这个生命周期。

Speaker Change: Oh sure Yeah no.

Speaker Change: Nah watchman <unk> quietly nisha high and so you'll have that shipyard.

Speaker Change: To assist in how we go see testing diagnosing T cell phone as he was sushi a negotiation issue with Yodlee.

Speaker Change: Well, Jim I'll, just close to Naples your neck in order to go John costume beyond that to whole shoe that tissue in.

Speaker Change: Our company you can today. So you can talk to perhaps how quenching tissue when they ship on the Shannon Curry shoe Torch, Alberta Yang <unk>.

Speaker Change: I'm glad you always see that Youre, assuming Joe cheap.

Bill Pang: Thank you for the. My second question is about Justice Mobile and Eggy Party. Based on some third-party data, seems these two games have some pressure in terms of the grossing trend recently. Could management elaborate how they are seeing internally for these two games in terms of their operational strategy, especially in what direction could we expect to extend a life cycle of these two games? Thank you.

Speaker Change: So thank you for my second question is not just as a whole bow and Achy Party.

Lincoln Kong: Thank you for the. My second question is about Justice Mobile and Eggy Party. Based on some third-party data, seems these two games have some pressure in terms of the grossing trend recently. Could management elaborate how they are seeing internally for these two games in terms of their operational strategy, especially in what direction could we expect to extend a life cycle of these two games? Thank you.

Speaker Change: So based on some third party data seems to these two games have some pressure in terms of the crossing trend recently.

Speaker Change: Could.

Speaker Change: Management elaborate how do you see internally for these two games.

Speaker Change: In terms of their operational strategy, especially in what direction.

Speaker Change: Could we expect to extend the lifecycle for these two games. Thank you.

Speaker Change: Okay.

Speaker Change: Sure.

William Ding: 回答一下密室逃脱的问题吧。对，我们密室逃的话在第三季度晚些，正式的，按照分析，当然我们非常坚信到玩家的，就是这个粘性是非常高的，这个数据超过了预期。那同时的话，也是在平衡商业化和玩家在游戏内的感受。那么目前来说，我们是感觉确认我们的游戏现在是符合我们对于玩家在，希望玩家在游戏内感受到一些乐趣的同时，也符合我们的对于游戏的商业化的一个探索和需求。那对未来的话，我们还会陆续推出更多的一些基于更丰富的类型，然后满足玩家的多层次的需求，最终的话实现在玩家对游戏满意的情况下面，更好地实现我们的商业化的目标。

Speaker Change: Gotcha.

Speaker Change: Hum.

Speaker Change: Yes.

Speaker Change: No.

Speaker Change: Uh huh.

Speaker Change: Okay.

Speaker Change: Hello.

Speaker Change: Oh.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Uh huh.

Speaker Change: Oh geez.

At all.

Speaker Change: Oh, yes.

Speaker Change: Is that.

Speaker Change: Xiaomi a parcel of land.

Speaker Change: Thanks.

Speaker Change: Yes sure.

Speaker Change: Uh huh.

Speaker Change: Okay. So okay.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Ill tell you why.

Speaker Change: Got that.

Speaker Change: And so at all.

Speaker Change: Sure.

Speaker Change: Oh sure.

Speaker Change: The council.

Speaker Change: Oh, how are those potential and daughter C G.

Speaker Change: Yeah.

Speaker Change: Oh yeah.

Speaker Change: So ashish they've joined the boxes, yeah, yeah yeah.

Speaker Change: Yes.

Speaker Change: Oh, sorry.

Speaker Change: Yes, so allow us to attract the.

Bill Pang: Yes. Allow us to address the Justice Mobile part first. As you know, during Q3, we finished the celebration of the first anniversary of the game. Players showed, you know, very good stickiness to the game. Players coming back actually, the rate of player coming back exceeded our expectation. What we're trying to do here is to balance the commercialization and user experience as well in the long run. We're pretty sure that what we have achieved is that while making sure the players have enough fun in our game, and we can do the commercialization exploration in the meantime to satisfy the players. Looking at the future, what we're going to keep doing is keep enriching the content of the game, provide multi-tier of content and premium for the players, and in the meantime explore innovative commercializations to make sure the game has a long term healthy environment. That's a part of the Justice Mobile.

Speaker Change: Just the mobile part first you know.

Speaker Change: As you know you know in Q3.

Speaker Change: We finished the celebration of the first anniversary.

In Brazil, the game and our players so you know.

Speaker Change: Very good stickiness to the game and.

Speaker Change: Players coming back actually the Rita player coming back exceeded our expectation.

Speaker Change: We are trying to do here is to balance the.

Speaker Change: Commercial aviation and user experience as well in the long run we're pretty sure that we what do we have achieved is that making while making sure the players have.

Speaker Change: Our game and so we can do the commercialization exploration in the meantime to 275 players are looking at the future we're going to keep doing it keep in reaching the content of the game provide you know multi tier of our content and I presume that for the for the players.

Bill Pang: Looking at the future, what we're going to keep doing is keep enriching the content of the game, provide multi-tier of content and premium for the players, and in the meantime explore innovative commercializations to make sure the game has a long term healthy environment. That's a part of the Justice Mobile.

Speaker Change: And in the meantime, explore innovative commercialization to make sure. The game has a long term housing environment. That's a part of the just in mobile.

Speaker Change: Yeah.

Speaker Change: Uh huh.

Operator 1: William，你这边静音了，听不到。

Bill Pang: William，你这边静音了，听不到。

Speaker Change: You did mention ULA timberlands.

William Ding: 听到，静音了。没有，没有静音啊。能听到吗？可以听到吗？

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Hamas.

Speaker Change: Okay.

Operator 1: 听得好。

Bill Pang: 听得好。

Speaker Change: Okay.

William Ding: 蛋仔派对我们还是会投入很大的力量去做一些内容的，我们对这个产品的长期运营是非常有信心的，目前还是网易DAU最高的产品之一。虽然我们目前在商业化上碰到一些挑战，但我觉得这也是业务发展过程中会面临的一个积累经验的过程。这一类的游戏在市场上是独一无二的，我们很相信随着我们上线的内容的推出，这个产品还是会长期发展，发挥它的商业价值的。谢谢。

Speaker Change: I think our time's up.

Speaker Change: Well Don has just been told them.

Speaker Change: So what you see here.

Speaker Change: Hum.

Speaker Change: At times, you guys Hi Chi.

Speaker Change: C G.

Speaker Change: E D.

Speaker Change: Okay.

Speaker Change: So that will mean.

Speaker Change: On your platform.

Speaker Change: Thank you Jason.

Speaker Change: You can find out more control.

Speaker Change: It seems like you have it.

Speaker Change: Well I'll tell you that even she said sometime soon.

Speaker Change: Sure Hi, Shannon legal management.

Speaker Change: So with hunting I definitely see that.

Speaker Change: Probably time to do that.

Speaker Change: Sure sure.

Speaker Change: Okay. So for the question about have you a part of you know one thing you are.

Bill Pang: Okay, for the question about Eggy Party. Now, one thing you can be sure that we're still doing a big effort in keep investing into to building more content for the game. The game we have, you know, we are very confident for the Eggy Party in the long-term run. It's actually, you know, one of the highest DAU product of NetEase in the history. As you noted from other sources of data, commercialization, we run into some short-term challenges. However, we take that as a great opportunity to accumulate experiences in how to develop and keep developing this franchise. We strongly believe this franchise is a very unique offering in the market, and our focus is the long-term content operation. We believe in the long-term, while we're doing more content, will provide more opportunities for commercialization in the future. Thank you.

You can be sure that we're still.

Speaker Change: Doing a big effort and keep investing into.

Speaker Change: Two building more content for the game.

Speaker Change: We have you know we're very confident.

Speaker Change: So the exit party in the long term, Rob it's actually one of the highest SKU product.

Speaker Change: Oh no.

Speaker Change: That is in the history.

And as you noted from other sources of data.

Commercialization, we run into some short term challenges. However, we take that as a great opportunity to accumulate experiences and how to develop it keep you out of the franchise.

Speaker Change: We strongly believe this franchise is a very unique offering in the market.

Our focus.

Long term content operation.

We believe in the long term, while we're doing more content will provide more opportunities for commercialization in the future.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Your next question comes from Keith.

Operator 1: Your next question comes from Xueqing Zhang with CICC.

Operator: Your next question comes from Xueqing Zhang with CICC.

Speaker Change: Steve King Zhang with Bank D C.

Speaker Change: Hey, <unk>.

Xueqing Zhang: 感谢管理层给我提问的机会。我有两个问题，然后我一个一个来问。第一个问题是关于公司海外游戏发展战略的，想了解一下海外第一方工作室目前的情况怎么样？然后我们看到，今年七日世界在Steam的表现很不错，能不能跟我们分享一些具体的运营情况，然后国内工作室游戏出海的后续规划是怎么样的？谢谢。Thanks management for taking my question. I have two questions and I will address one by one. My first question about your overseas game strategy. How is your current situation with the overseas first party game studios?

Speaker Change: Dino and tissue quarry.

Speaker Change: I see Janet.

Speaker Change: I'll now J D.

Speaker Change: Consortium with Thomson Macondo.

Speaker Change: Macondo.

Speaker Change: So you should see as a steam Natasha.

Speaker Change: And then Goldman of Sunshine.

Speaker Change: Oh, Glenn the consortium.

Speaker Change: How should we in Washington, and I think yes. Thanks management for taking my question I have two questions.

Speaker Change: James.

Speaker Change: My first question actually on for Jason.

Speaker Change: Jason Jed.

Speaker Change: The current situation with the Osh Hodgkin studios.

Xueqing Zhang: We have seen that Once Human has performed well on Steam this year. Could management share more specific details?

Being that our west human ahead from Noel asked in S E T.

Speaker Change: Can management share more specific details.

Bill Pang: What's your plan for globalization of domestic studios' games? Thank you.

Xueqing Zhang: What's your plan for globalization of domestic studios' games? Thank you.

Speaker Change: And what's your plan for all of our nation's asphodel Mystique still Dallas game. Thank you.

[Company Representative 2] (NetEase): 我们整个出海的路径是两条腿走路，一个是在海外的工作室开发面向欧美、日本的游戏产品。那还有一条就是国内的工作室去开发针对日本、欧美等海外的一些产品。那你现在看到的Once Human是网易在六月份在海外上线的一个PC游戏，目前表现很好。我们还有两个游戏会在十二月和明年上线，那都是射击类的游戏，一个是Marvel Rivals，就是漫威争锋，十二月六号上线。那还有一个是在明年第一季度的FragPunk也会上线。这两个产品都是双端近机设计的PC游戏。我相信网易很有信心，通过国内的工作室和海外的工作室来开拓海外的游戏市场。我们在日本的荒野行动以及第五人格也取得了很多不错的成绩。那在未来我相信公司还会有更多的产品在海外市场取得成绩。

William Ding: 我们整个出海的路径是两条腿走路，一个是在海外的工作室开发面向欧美、日本的游戏产品。那还有一条就是国内的工作室去开发针对日本、欧美等海外的一些产品。那你现在看到的Once Human是网易在六月份在海外上线的一个PC游戏，目前表现很好。我们还有两个游戏会在十二月和明年上线，那都是射击类的游戏，一个是Marvel Rivals，就是漫威争锋，十二月六号上线。那还有一个是在明年第一季度的FragPunk也会上线。这两个产品都是双端近机设计的PC游戏。我相信网易很有信心，通过国内的工作室和海外的工作室来开拓海外的游戏市场。我们在日本的荒野行动以及第五人格也取得了很多不错的成绩。那在未来我相信公司还会有更多的产品在海外市场取得成绩。

Speaker Change: Hi, Bob.

Speaker Change: Yes.

Speaker Change: Okay.

Hi, Michelle.

Speaker Change: Uh huh.

Uh-huh E C.

Speaker Change: Okay.

Speaker Change: Right.

Speaker Change: Oh you bet.

Speaker Change: Yes.

Speaker Change: Hi, Bob.

Speaker Change: <unk> you want me to.

Speaker Change: Last question.

Speaker Change: Yes.

Speaker Change: Gotcha.

Speaker Change: Yoshi.

Speaker Change: Sounds great.

Speaker Change: So do you think you've achieved.

Speaker Change: Marbles right matches.

Speaker Change: Sorry, Ian Hudson.

Speaker Change: How are you guys just Ibs D.

Speaker Change: So you're right.

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Speaker Change: T J P J.

Speaker Change: <unk> one <unk>.

Speaker Change: Cool.

Speaker Change: What are your thoughts on.

Speaker Change: That kind of tool.

Speaker Change: Yes.

Speaker Change: Women.

Speaker Change: Please go ahead.

Speaker Change: Yeah.

Speaker Change: I was asking.

Speaker Change: Good morning.

Speaker Change: Uh huh.

Speaker Change: Which should add to that.

Speaker Change: Yes.

Speaker Change: So thank you for your question.

Bill Pang: Thank you for your question. As you can tell that we are having two legs in our, when we go after the global market.

Speaker Change: As you can tell that we are.

Speaker Change: Having two lacks in our.

Speaker Change: While we go after the global market you know one like we have.

Bill Pang: You know, one leg is, we have overseas first party making games in the region in Western markets, in Japan, for the Western and Japan market. In the meantime, the second leg is that we have our studios, domestic studios making game for global to release not only in China but in Europe market, North American market, and Japanese market as well. You're right that Once Human was a game we released early summer this year and performance really well. Looking forward immediately, we have two titles, you know, one is Marvel Rivals in December, and the other one is FragPunk in early next year that we're going to release towards the global market. Both of these are shooter based PVP game, PC and console. You know, we believe our domestic studios will be capable of producing more and more products suitable for global market. Actually, this is not our first wave of success in global market outside of China market, you probably recall that our Knives Out and Identity V actually worked fairly well in Japan market and gained a lot of acclaim there. Looking forward, we have confidence that our domestic studios and our overseas studio will be able to produce more and more worldwide suitable content. Thank you.

Speaker Change: Well, let's see first party are making gains in the region in western markets in Japan.

Speaker Change: For the Western Japan market in the meantime, the second leg is that we have all the studios domestic studios, making JM for global two two release not only in China, but in Europe market North American market share in this market as well.

Speaker Change: You are right that once human what's it gave we released early summer this year and so it's.

Speaker Change: Really well.

Speaker Change: And.

Speaker Change: Looking for immediately we have two titles.

Speaker Change: One is my rivals in December and the other one that's frac hunk.

Speaker Change: In early next year, so we're going to release.

Speaker Change: Towards the global market. Both of these are sugar based Pvp game PC and console you know all we believe our domestic studios will be capable of producing more anymore.

Bill Pang: Both of these are shooter based PVP game, PC and console. You know, we believe our domestic studios will be capable of producing more and more products suitable for global market. Actually, this is not our first wave of success in global market outside of China market, you probably recall that our Knives Out and Identity V actually worked fairly well in Japan market and gained a lot of acclaim there. Looking forward, we have confidence that our domestic studios and our overseas studio will be able to produce more and more worldwide suitable content. Thank you.

Speaker Change: Products suitable for global market actually this is not our first wave of success in global market outside of China market.

Speaker Change: You, probably recall that our lifestyles and added eight five.

Speaker Change: Actually work fairly well in Japan market and gained a lot of our claim there and looking forward we have confidence at all domestic.

Speaker Change: And our overseas sort of won't be able to produce more and more worldwide suitable content.

Speaker Change: Thank you.

Julien: Hey, Julien.

Xueqing Zhang: 谢谢，很有帮助。然后我的第二个问题是关于我们的长期老游戏的，就比如说像梦幻西游手游这些长期老游戏，是如何保持强劲生命力的，然后目前运营的流水情况，还有游戏内部的生态怎么样，能跟我们展开讲讲吗？谢谢。My second question is about your flagship evergreen games. How do the flagship games such as Fantasy Westward Journey Mobile remain strong? How has their growth been in recent months? Thank you.

Julien: Oh, the Donovan tissue by a woman that see.

Julien:

Julien: Well my social religious Youre talking <unk> I will hop.

Speaker Change: She foundation, we need.

Speaker Change: And they'll sheets.

Speaker Change: Sydney Shanghai.

Speaker Change: Goldman just talked about.

Speaker Change: My second question is about yeah that should evergreen games, how do the actual games such as Scott has me westward journey mobile.

Speaker Change: John.

Speaker Change: Yeah cause beans in recent months.

Keith.

Speaker Change: [noise] Hawaii.

[Company Representative 2] (NetEase): 在网易公司里面有超过十年的游戏，不少。除了梦幻西游、大话西游，还有我们的天下，还有我们的那个代理的游戏，魔兽世界等等，这些都超过十年。我们积累了非常多的运营经验，不停地增加有趣味性的玩法和资料，来获得用户的肯定。那我相信，游戏产业本身产品还是一个创新的，让用户感觉到了有趣味性的一个产品，我们很有信心在每一个产品上，不停地去投入新的内容，新的趣味性玩法，来获得这个市场。谢谢。

William Ding: 在网易公司里面有超过十年的游戏，不少。除了梦幻西游、大话西游，还有我们的天下，还有我们的那个代理的游戏，魔兽世界等等，这些都超过十年。我们积累了非常多的运营经验，不停地增加有趣味性的玩法和资料，来获得用户的肯定。那我相信，游戏产业本身产品还是一个创新的，让用户感觉到了有趣味性的一个产品，我们很有信心在每一个产品上，不停地去投入新的内容，新的趣味性玩法，来获得这个市场。谢谢。

Speaker Change: Yeah, Hi.

Speaker Change: Cool.

Speaker Change: Simeon.

Speaker Change: Yes.

Speaker Change: My wife Shiel Shiel.

Speaker Change: Hey, all of them in the Idaho woman.

Speaker Change: Most of this year.

Speaker Change: Okay. That's helpful.

Speaker Change: All women.

Speaker Change: Yeah.

Sure Sheila.

Speaker Change: Yeah.

Speaker Change: In Ecuador.

Speaker Change: Thank you.

Speaker Change: You should have yeah.

Speaker Change: <unk>.

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Got you at all or your choice.

Speaker Change: Tom.

Speaker Change: And finally, you depending upon.

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Speaker Change:

Speaker Change: C J.

Speaker Change: Yeah. So.

Bill Pang: We have quite a selection of franchises that has more than 10 years of, you know, like Fantasy Westward Journey, you know, Westward Journey Online, Tianxia, you know, even our licensed title, World of Warcraft, you know. What we will keep doing is continuously add new gameplay, try new things, new fun stuff and content into the game. We believe the core of game business is for innovation, to keep providing fun, innovative, new content to the players. In every single esports game, we'll keep doing that and that's something you can be assured of. Thank you.

Speaker Change: Actually and that is.

Speaker Change: We have quite a collection of franchises that has more than 10 years.

Speaker Change: Oh, you know like finished for journey westward journey online the World you know.

Speaker Change: Even though our license title waterworld crowds.

Speaker Change: We are keep doing well keep doing is continuously and new gameplay trying new things.

Speaker Change: You will find staff and content into the game we.

Speaker Change: We believe.

The cross game business is for innovation.

Speaker Change: To keep providing fun.

New content to the players.

Speaker Change: In every single email program, we'll be keep doing box and that's something that can be a short off.

Speaker Change: Thank you.

Speaker Change: Okay.

Operator 1: Your next question comes from Ritchie Sun with HSBC.

Operator: Your next question comes from Ritchie Sun with HSBC.

Your next question comes from Rich <unk> with HSBC.

Speaker Change:

Ritchie Sun: 丁总、刘总，晚上好，谢谢你们给我提问的机会。我有两个问题，第一个问题想问一下漫威争锋，请问管理层能否讲一下这款游戏，对比一下这个潜力跟其他PVP射击的游戏。

Speaker Change: There's one question on housekeeping you might get what do you say Oh, well you know when do you go when do you start ways, our Maui telephone.

Glen has hung in there with all of you saw a decline you'll see I think besides that I can't leave Duncey top heavy pieces you Douglas.

Ritchie Sun: Thank you, management, for taking my questions. I have two. First of all, for Marvel Rivals, can management contrast the potential of this title against other PVP shooting titles in the market? How long would it take for the game to ramp up to its full potential? What metrics should we monitor to track its progress?

Speaker Change: Our whole physicals.

Ken can you talk on the Coty shall Doghouse Mcgee guide going to teach me how chickens on kind of the team in China. Thank.

Speaker Change: Thank you management for the questions I have for taking my questions that tool first of all for Marvell rifles can management contrast, the potential of this title against or the T. V piece retained titles in the market and how long would it take for the game to ramp up to full potential and what metrics should we monitor actually crack its progress.

Speaker Change: Myeloid sometime Shuang E C&I policy engine.

[Company Representative 3] (NetEase): 漫威争锋是网易新一代超级英雄射击竞技的对战游戏，它有独特的游戏体验。我们非常希望能够开拓一个新的英雄射击新赛道。产品在今年八月进行了大规模的海外的PC以及主机平台的closed beta test，最终测试的留存数据优秀。在Steam上我们获得了好评，接近95%，玩家的反馈比较正向，同时也进入了Steam的wishlist的第七名。我们有信心在接下来的时间根据测试反馈把产品打磨得更好。我们正式在十二月六号公测。这是一个免费的英雄射击的对战产品，竞技的，这个射击竞技的对战产品。我们还很有信心在PC以及主机平台上取得新的成功。谢谢。

William Ding: 漫威争锋是网易新一代超级英雄射击竞技的对战游戏，它有独特的游戏体验。我们非常希望能够开拓一个新的英雄射击新赛道。产品在今年八月进行了大规模的海外的PC以及主机平台的closed beta test，最终测试的留存数据优秀。在Steam上我们获得了好评，接近95%，玩家的反馈比较正向，同时也进入了Steam的wishlist的第七名。我们有信心在接下来的时间根据测试反馈把产品打磨得更好。我们正式在十二月六号公测。这是一个免费的英雄射击的对战产品，竞技的，这个射击竞技的对战产品。我们还很有信心在PC以及主机平台上取得新的成功。谢谢。

Speaker Change: Thanks Tyler.

Speaker Change: Penthouse Q1, Okay. Please assume that no shoes, so to say.

Speaker Change: Yeah.

Speaker Change: Hi, guys.

Speaker Change: Yeah.

Speaker Change: Thats.

Speaker Change: What are you seeing just from keeping tight hello speed that test.

Speaker Change: Hey, John.

Speaker Change: Nishu Sood Nishu that Steven.

Speaker Change: P J D.

Speaker Change: Sure.

Speaker Change: Jonathan.

Speaker Change: Gucci at Cumulus deemed initiatives.

Speaker Change: Well, maybe this evening. Thank you Shannon this is Jim confused sometimes.

Speaker Change: Well that sounds since Saturday huh.

Speaker Change: You got me in thanking them.

Speaker Change: So gena.

Hey, Todd.

Speaker Change: The two that he can walk you back through that.

Speaker Change:

Speaker Change: I don't see Chi Tsang PC GPU that much.

Speaker Change: Sure.

Speaker Change: Yeah. So.

Bill Pang: Yeah. For your question about Marvel Rivals, Marvel Rivals is a new generation superhero based, you know, team based competitive shooting game. It actually has very unique game experiences, and we hope it could open the new track in this big genre. The product actually facilitated large scale PC and console closed beta tests in North America and the overseas market. The performance data was excellent. The Steam, you know, positive review rate was close to 95%. The player feedback are very positive, and in the meantime, it also ranked number 7 on the Steam wish list now.

Speaker Change: Yeah. So for your question about Marvel rivals.

Speaker Change: Rivals.

Speaker Change: New generation superhero base, you know achieving based competitive shooting game.

It actually has very unique game experiences and we hope it could open the new track in this big downturn.

Speaker Change: Donna.

Speaker Change: And the product actually facilitated large scale PCR castle close beta test in August.

Speaker Change: Okay.

Speaker Change: The performance data was excellent.

Speaker Change: You know our posture of your bill rate was close to 95%.

Speaker Change: Layers feedback are very positive and in the meantime, it also ranked number seven honesty and wish list now.

Bill Pang: We do have confidence that, you know, during the time we have before launch, we'll keep optimizing the product, keep polishing the product. When the product is released on 6 December 2024 globally on PC and console, it could be offering, you know, the best possible experience to the users. We hope this one could provide a unique experience to the players worldwide. Thank you.

Speaker Change: We do have confidence that.

Speaker Change: You know we're doing the the time, we have before launch will keep optimizing the product portion of product one product when the product gets released on December 6th globally on PC and console it could be offer a.

Speaker Change: That's the best possible experience to the users we hope this one could provide a unique experience.

Speaker Change: Two the players worldwide.

Speaker Change: Thank you.

Speaker Change: Oh, yeah, well the Tioga woodke, so Glenn do you share that.

Operator 2: 好，谢谢。我的第二个问题是关于暴雪的，在国内重新上线的魔兽还有炉石，其实反应也比预期更好啊。我们在推动这一个结果方面，其实做了哪些不同的努力？这个是否意味着暴雪在为未来年度的营收的贡献是不是会高于之前二零二零、二零二二年的情况呢？另外，守望先锋什么时候会重返国内的市场？

Ritchie Sun: 好，谢谢。我的第二个问题是关于暴雪的，在国内重新上线的魔兽还有炉石，其实反应也比预期更好啊。我们在推动这一个结果方面，其实做了哪些不同的努力？这个是否意味着暴雪在为未来年度的营收的贡献是不是会高于之前二零二零、二零二二年的情况呢？另外，守望先锋什么时候会重返国内的市场？

Speaker Change: Well in Natomas, Haisheng scan emotional, Ohio should teach if I E.

Speaker Change: She couldn't collar woman say tell you don't take the chemicals on Massachusetts solar NASA homeland.

Speaker Change: Took a Stifel uhm.

Speaker Change: Wade Wade into that you can show that goldman's here should we should wait.

Speaker Change: Yeah, I think on you and if he polymer Meanwhile, I shall lungs headphones that Michelle holway.

Speaker Change: Sure.

Speaker Change: Thank you.

Ritchie Sun: I have a second question is about Blizzard. The reception of the relaunch of World of Warcraft and Hearthstone in China is much better than expected. What have we done differently than the past to drive such results? Would this mean the annual revenue contribution from Blizzard in the future will be higher than in 2022? When will Overwatch return to China? Thank you.

Speaker Change: Second question is about blissett that reception of the relaunch of well crops and hearthstone in China is much better than expected. So what have we done differently than the past to drive such results and would this means the annual revenue contribution from that in the future will be higher than in 2020.

Speaker Change: And when will offer watch out we tend to China. Thank you.

Speaker Change: Oh Wow.

William Ding: 我要回答一下这个问题。那么，这个暴雪的回归中国，我们其实在营销和产品层面都做了多方面的努力。在营销层面呢，借助魔兽世界的巨大影响力，官方在回归的第一时间就展开了多品牌的跨品牌合作，进一步刷新了魔兽的品牌形象，吸引了大量的新的用户。炉石传说在ChinaJoy上回归，官宣成为了今年CJ最重要的事件。十月初的黄金联赛也重新回到了中国，在亚运会赛场更是人气爆棚。我们同时呢，也尝试在社交平台上做出新的一些，社媒上面做出新的尝试，不断产出爆款的内容。在过去的初月中，相关的视频点击量已经突破了一百亿次。在产品层面呢，新的团队和暴雪呢，也建立了更深入的合作关系，持续推出了更适合中国玩家的产品和服务，并且通过合理的运营方案持续保持玩家的活跃度和付费的意愿。所以我们对未来，魔兽的各个产品在中国的表现持非常乐观的一个态度。关于守望先锋，目前暂时没有更多的新信息可透露，但是的确是我们下一款准备回归的游戏。

Speaker Change: Uh huh.

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Speaker Change: Can you talk to kids, who wants us to do that and John but not that we're glad that Michigan, Georgia kind of bogey at AR.

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Speaker Change: You bet Lisa.

Speaker Change: Yeah.

Speaker Change: Sanjay.

Speaker Change: That's gotten some buda well branches. So that's what I think should that don't go alongside that.

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Speaker Change: You saw that sushi Pascua I got Oh, we have to pay that.

Speaker Change: Yeah.

Speaker Change: Hey, David.

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Speaker Change: Cause I attended that deal but it.

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Speaker Change: Okay.

Speaker Change: Thanks, John Chamberlain with fantastic endorsement.

Speaker Change: Got it.

Speaker Change: Yeah.

Speaker Change: Yeah. So.

[Company Representative 3] (NetEase): Yeah, we have done quite many things, both marketing as well as products, multifaceted effort approach to operate these products. You know, World of Warcraft has its own influence and power. However, we have multiple, you know, cross-branding collaborations with other brands. You know, we brought that into even bigger impact in the society, and that help us to attract a lot of new players to the game as well. For Hearthstone, you probably heard that we announced the returning of Hearthstone at ChinaJoy, and that became one of the most exciting things during ChinaJoy time.

Bill Pang: Yeah, we have done quite many things, both marketing as well as products, multifaceted effort approach to operate these products. You know, World of Warcraft has its own influence and power. However, we have multiple, you know, cross-branding collaborations with other brands. You know, we brought that into even bigger impact in the society, and that help us to attract a lot of new players to the game as well. For Hearthstone, you probably heard that we announced the returning of Hearthstone at ChinaJoy, and that became one of the most exciting things during ChinaJoy time.

Speaker Change: Uh huh.

Speaker Change: We have done quite quite amount of things post marketing as far as product.

Speaker Change: It's a multifaceted effort approach.

Speaker Change: Operator, please a product you know.

Speaker Change: <unk> you.

Speaker Change: Some power however.

Speaker Change: The multiple multiple cross branding collaborations with other brands you know all we brought that into even bigger impact.

Speaker Change: In the society.

Speaker Change: Help us to attract a lot of new players to the game as well for Hearthstone.

Speaker Change: Probably heard of that.

Speaker Change: We announced the returning of Hearthstone.

Speaker Change: China Joy and became one of the most exciting things do you intend to anytime.

Bill Pang: The return on the esports side, the Gold Series and the impact on the Asian Games, you know, involvement that's all helped. We're being innovative in how to spread out the brand message and how to interact with the players. For example, social media is something we have done, you know, more innovatively compared to the past. The videos on social media, I think the clicks of the social media videos have more than 10 billion times now. None of this could be realized without a deep collaboration, deep trust, and deep collaboration with Blizzard.

Speaker Change: And the and also the return of the on the.

Speaker Change: E sports side, the Oh at Golden League.

Speaker Change: The impact on the.

Speaker Change: On the Big you know our enrolment, that's Oh helped and in the main and also.

Speaker Change: We're being innovative in how to.

Speaker Change: Spread out the brand message and how to interact with the a b players for example, social media is something we have done.

Speaker Change: No.

Speaker Change: Basically if you compare it to the past.

Speaker Change: The videos on social media.

Speaker Change: With the click of a video social media video has more than 10 billion times now.

Speaker Change: And also none of this could be realized without a deep cooperation deep process deep cooperation with plays are now both on the product and marketing side, we have.

Bill Pang: Now, both on the product and marketing side, you know, we have very deep working relationship now. We believe, with the innovations we're doing here in China, focusing on how to present a more locally appreciated product and service to the Chinese players, we can maintain. The players also showed us their active level of activeness and level of payment intention is really high, and we are very confident that it will have a very good result in the long run. That's for World of Warcraft and Hearthstone. For Overwatch, we don't have anything specific to disclose now, regarding the launch date. But Overwatch is going to be the next Blizzard product we launch in China. Thank you.

Speaker Change: Very good.

Speaker Change: Working relationship now and we believe.

Speaker Change: With the innovations we're doing here in China, focusing on how to present, a more locally appreciate it product and service to the Chinese players.

Speaker Change: We can maintain the players also showed us the level of active genius level payments intention is really high and we are very confident that it will have a very good result in the long run thus.

Speaker Change: That's for World of Warcraft, and Hearthstone for Overwatch, we don't have anything specific to discuss now regarding the launch date.

Speaker Change: Or what it's going to be the Max product mix plays our product we are re launch in China.

Speaker Change: Thank you.

Speaker Change: Yeah.

Operator 1: Your next question comes from Felix Liu with UBS.

Operator: Your next question comes from Felix Liu with UBS.

Speaker Change: Your next question comes from Felix Liu with UBS.

Felix Liu: 谢谢管理层接受我的提问。我的问题是关于我们二零二五年的产品，游戏产品线。刚才管理层提到了这个Thronepunk，我想这个可能再追问一下管理层能否就是更详，就是给我们更多的这个细节，除了Thronepunk以外，其他我们，就是投资者应该关注的这个新游戏，他们的类型以及发布的时间。此外，管理层能否分享一下代号：无限大最新的这个近况，以及预计的发布时间。Thank you management for taking my question.

Speaker Change: She said, Glenn anytime tailwind or the one T shirt plenty of women.

Speaker Change: The 10-Q, you'll see Kennedy.

Speaker Change: Contact anytime Pete I'll, let you go forward.

Speaker Change: Ponca City.

Speaker Change: Hey, Julien anytime nonpublic tissue.

Speaker Change: Tissue element.

Speaker Change: Frank Punky why she Taliban.

Speaker Change: Tissue Guangzhou.

Speaker Change: Oh yeah.

Speaker Change: Uh huh.

Speaker Change: Oh fan count you've got that whole, we cannot say shouldn't that'd be great.

Speaker Change: He did a fabulous she can.

Speaker Change: Thank you management for taking my question. My question is on the pipeline.

Felix Liu: My question is on your pipeline. You mentioned some titles earlier in the call, but could you provide, you know, more details on the game genre and the expected launch time for the key titles in 2025. Additionally, I would like to ask question on Project Mugen. What is the latest status of the game and expected launch time?

Speaker Change: You mentioned some titles earlier in the call, but could you provide more Peter.

Speaker Change: T telephone the game Shanghai and the expected launch timing for the key titles in 2025. Additionally, <unk>.

Speaker Change: Like to ask a question on <unk>, what is the latest status of the game unexpected punch time.

Speaker Change: Oh last time think alcohol and yourself.

William Ding: Uh.

Felix Liu: Thank you.

William Ding: 刚刚我们已经说……

William Ding: 关于FragPunk，刚才我们已经说过了，我们会在年底在国内进行测试，然后会根据测试情况来决定我们最终的发布的日期。关于无限大，同样我们在今年年底会进行第一次的线下的玩家测试，我们对于无限大有非常高的预期，也是投入了巨大的研发资源。我向大家保证的是，无限大不仅仅是一个我们传统意义上所说的开放世界的二次元游戏的延续，它有非常多的创新和我们对于未来的二次元游戏的世界的思考在里面。我们做了非常多的尝试，这些尝试是基于网易在过去二十多年中对于游戏市场的认知，对于玩家的观察。我们对这款游戏充满了信心，我们会在适当时间披露它的进步的情况。

Speaker Change: Oh yeah.

Speaker Change: Hello, you show up all in one place that and Andy.

Speaker Change:

Speaker Change: First off with LNG, because it's upon us.

I think on the Alberta.

Speaker Change: I think we said that Oh C N N places.

Speaker Change: Got it.

Speaker Change: Okay great.

Got it.

Speaker Change: Okay.

Speaker Change: Got.

Speaker Change: Yeah absolutely.

Speaker Change:

Well, John I haven't finished susana about Hep C.

Speaker Change: Uh huh.

Speaker Change: So.

Speaker Change: Have I forget it.

Speaker Change: Thompson.

Okay.

Speaker Change: Uh huh.

Speaker Change: Yes.

Sure Jason.

Speaker Change: Thanks.

Speaker Change: Jack.

Speaker Change: This is Tom.

Speaker Change: Thanks.

Speaker Change: So I can see.

Uh huh.

Speaker Change: Okay.

Speaker Change: Hum.

Speaker Change: Yeah, So let's talk about the five Paul.

Bill Pang: Let's talk about the Thronepunk and Project Mugen. Thronepunk, as we mentioned that we're going to have a test within this year in December. Based on the test result, we'll, you know, decide, you know, when to launch this game officially. That's for Thronepunk. For Project Mugen, as we mentioned that we're going to have the first offline test within this year. We do have high expectations for Project Mugen, not only because we invested, you know, a tremendous amount of R&D resources into this product, but also, you know, our expectation is this game is not going to be only another open world ACG game. It will carry NetEase thinking about future ACG game.

Speaker Change: Product movement.

First of all as we mentioned that we're going to have a test within.

Speaker Change: Within this year in December and based on the test results are.

Speaker Change: Well you know besides one to launch this game officially thus.

Speaker Change: That's for our Frac pump for project Morgan.

As we mentioned we're going to have the first offline test within this year and we do have high expectations for park Morgan not only because we invested a tremendous amount of R&D resources into this product but also.

Speaker Change: You know our expectation is this is this game is nominal.

Speaker Change: I was going to be another open the wall ACG game. It will carry that he's thinking about future ACG game and based on our 20 years of experience.

Bill Pang: Based on our 20 years experience of knowledge of the Chinese gamers and observation of gamers, we put a lot of thinking into what the future of this type of game should be and that will be reflected in the game. We do have a high expectation there.

Speaker Change: <unk> of the Chinese game a gamer.

Speaker Change: <unk>.

Speaker Change: The vision of gamers.

Put out I'm thinking into the.

The future of this type of game should be on better will be refractory and again, we do have high expectations there.

Speaker Change: But.

Felix Liu: Thank you, management. My follow-up question is on the latest trends on Fantasy Westward Journey PC. It's operational trends as well as revenue trend. What are the user feedback to our changes made in the first half? Thank you.

Speaker Change: What does he go into Asia.

Speaker Change: Uh huh.

Speaker Change: And Kelly you got your language is that that doesn't feel whole Jason that you got a yoshi shaking out next year.

Speaker Change: Women can hit your location count by telephone.

Telephone cable.

Speaker Change: Thank you management my follow up question is on the latest trends on fantasy westward journey P. C.

Speaker Change: Uh huh operational trends as well as cash at western trend and what are the user feedback to our changes maybe in the first half. Thank you.

[Company Representative 2] (NetEase): 梦幻西游端游目前的各项数据是比较稳定的，今年八月营收目前为全年的第二高，DAU稳步提升。我们于八月到十月陆续放出的一些调整

William Ding: 梦幻西游端游目前的各项数据是比较稳定的，今年八月营收目前为全年的第二高，DAU稳步提升。我们于八月到十月陆续放出的一些调整

Speaker Change: Thank.

Speaker Change: Thank you Moshe and then a quick housekeeping.

Speaker Change: Junior apparel, so heavily tenure with.

Speaker Change: I'll call Diego.

Speaker Change: Well maybe I.

Speaker Change: Oh yeah.

Speaker Change: For the kitchen Hudson.

William Ding: 玩家对于外放的内容呢，呈现出比较欢迎的态度。同时我们将会在年底放出新的资料片，以及更多的体验优化的内容，确保用户的游戏趣味性和产品运营的稳定。谢谢。

[Company Representative] (NetEase): 玩家对于外放的内容呢，呈现出比较欢迎的态度。同时我们将会在年底放出新的资料片，以及更多的体验优化的内容，确保用户的游戏趣味性和产品运营的稳定。谢谢。

Jonathan: Jonathan why upon the main one that will be helpful.

Jonathan: Jonathan anti pumps machine Thats.

Speaker Change: You want a single chip.

Speaker Change: Sure.

Speaker Change: Hum.

Sure.

Speaker Change #100: Yeah. So if you have questions about ventas western EPC, a suezmax PC actually know all the performance metrics are very stable as a matter of fact August was the highest revenue months in.

Bill Pang: Yeah. Second question about Fantasy Westward Journey PC. Actually now all the performance metrics are very stable. As a matter of fact, August was the highest revenue month in this year for this game. Now after the adjustment, the DAU is stable, not only stabilized but keep improving now. We released a series of adjusted content from August to October time. The player feedback regarding this new content are very, so very welcoming attitude. In the meantime, we're going to release new expansion pack by the end of this year and more optimization and refresh content to maintain the fun of play the game and maintain the stability of the game operation.

And this year for this game and now after the adjustments. The Dia you is stable not only stabilized but to keep improving now and we released a series of adjusted constant from August to October time, and the player feedback regarding this new concept.

Speaker Change #100: Yeah, so very welcoming attitude and in the meantime, we're going to release new.

Pension pack, but at the end of this year and more observation and refresh content to maintain.

Speaker Change #100: The defined the play the game and maintain a staple lengths of stay came operation. Thank you.

Bill Pang: Thank you. Operator, given the time limit, we probably have time for one more questions.

Speaker Change #101: Operator, given the time limit, we probably have time for one more questions.

Operator 1: Thank you. Your next question comes from Alicia Yap with Citigroup.

Operator: Thank you. Your next question comes from Alicia Yap with Citigroup.

Speaker Change #102: Thank you. Your next question comes from Alicia Yap with Citigroup.

Alicia Yap: Hi, good evening.

Alicia Yap: Hi, Good evening my name too much on housekeeping just on what you want Oh, what's always address Yung Kim again.

Alicia Yap: 管理层晚上好，谢谢接受我的提问。很快我想问一下这个永劫无间手游。就想请管理层分享一下，就自从这个七月份这款手游推出以来，就的表现管理层有什么看法？然后游戏表现有没有达到了管理层之前的这个预期哈。然后未来几个月这款游戏会推出一些内容更新，或者是会有哪些促销活动吗？然后也想请教一下，就是移动版、手游版跟PC版的这个玩家画像，有什么明显的区别吗？我自己翻译一下。Thanks for taking my question.

Speaker Change #104: Just juanita and sometimes that's true.

Speaker Change #105: Just how long does that she has a question.

Speaker Change #105: Hum.

Oh, Yeah, let's see yeah, you also with that Olive garden to.

Speaker Change #105: Okay.

Speaker Change #105: Oh wait out you guys, yes, Jochen <unk>.

Speaker Change #105: <unk> been seeing that shortly.

Speaker Change #105: Oh I'm sure.

Speaker Change #105: Sure you don't buy it.

Good to see that that's.

Speaker Change #105: That's at all why Jeff question.

Speaker Change #106: Some of them.

Speaker Change #106: Oh geez.

Speaker Change #106: Thanks for taking my question.

Alicia Yap: Could management share with us your thoughts and on the performance of Naraka: Bladepoint Mobile since the launch in July? Has that met your expectation? What are some of the upcoming content and promotional events, updates, plans for this game? Any meaningful difference in terms of the gamer profile for the mobile version versus the PC version? Thank you.

Speaker Change #106: Thanks Shelly.

Speaker Change #106: And underperformance of Nobel Company, one mobile since the launch in July.

Speaker Change #107: Net to our expectation.

Speaker Change #108: Some of the upcoming content and promotion that you've been updated plans for this game any meaningful difference in terms of the game up profile for the mobile Bush and bus applications.

Speaker Change #108: Thank you.

Speaker Change #110: Oh, Wow, that's I wouldn't say no matter where gasoline.

William Ding: 好，我要回答一下这个问题。那么永劫无间手游自上线以来呢，已经累计有了五千万的一个新增用户。在四个月的实际运营当中呢，我们发现，同样是竞技，动作竞技的爱好者，那么端游用户和手游用户还是有很多的这样的需求上的区别的。那么总的说来，手游用户他的需求更加分化，有竞技型的用户，有社交需求非常强的用户，也有这个外观的收集党的玩家。所以在未来的版本中，我们想除了满足他们不同的需求外，更重要的是，接受手游玩家与端游玩家的不同，提供更具差异化的内容服务。除了英雄玩法的改造，每个版本我们还会推出端游所没有的全新的玩法，来更好地满足手游玩家追求的新鲜感。那么目前来说，永劫无间手游是处于一个非常健康的、平稳的发展时期，我们对未来充满信心。谢谢。

Speaker Change #110: I know you've been made key although we're kind of landing simply don't forget.

Speaker Change #110: Forget us even in times when element, yeah, I play out J D.

Speaker Change #110: Daniel.

I feel and autonomous features on distributor and that's what actually we don't feel it's how does she was hoping Jonathan Bock.

Speaker Change #111: Oh, Yeah sure.

Speaker Change #112: Oh, it's gone down so as you see it.

Speaker Change #112: And that's only Michelle Tula.

How many skus you lack and Toyota.

Speaker Change #113: Yeah. So.

Speaker Change #114: Anyway, I got a quick home keep on saying Gee, how do you find that.

Speaker Change #115: Cooler than usual.

Speaker Change #115: Got it guys all you got to handle claims.

Speaker Change #116: Sure Daniel from the <unk> change.

Speaker Change #116: I got so low and job creation with Syngenta.

Well, what can I assure you again.

Speaker Change #116: So you'll have a system can cause based content and content, that's Linda hard assets.

Speaker Change #116: Susan.

Susan: Yes to answer your question.

Bill Pang: Yes. To answer your question, we actually have accumulated 50 million new users across the four months of operation. You know, one thing we learned is that even though both the PC and mobile are competitive action-based competitive games. The PC gamers and the mobile gamers, their needs and demands are to some extent different. The mobile gamers, their demand are more diversified. They are hardcore competitive players, there are social type players, there are also players enjoy collecting the cosmetic stuff.

Susan: We.

Susan: Actually you have accumulated 50 million new users across the four months of operation.

Susan: And.

Susan: You know one thing we learned is that.

Susan: Even this both the PC and mobile are a competitive action based competitor games on the PC gamers and the mobile gamers their needs and demands are.

Susan: To some extent different the mobile game or third demand are more diversify our they are hardcore competitive players. There are social type players. There are also players enjoy collecting the cosmetic stuff. So what do we do is that Oh, we embrace we.

Bill Pang: What we do is that we understand and we embrace the difference in the gamers needs, and we provide different content, differentiated content to both PC and mobile versions. For example, we might provide more new content that are not available on PC, but for mobile players only to provide new gameplays, new contents, everything. The game actually is in the very healthy status and very stable, very healthy status. We have long-term confidence in this product. Thank you.

Susan: And we embrace the difference in the gamers needs.

Susan: And we provide different content.

Susan: The content.

Susan: To both PC and mobile versions and.

Susan: For example, we might provide more new content to us or not.

Susan: Not available on PC, but for mobile players.

Susan: To provide a new game place new contents everything and.

Susan: The game actually it's very in the very healthy.

Susan: Status, and very stabilized where staples warehouse houses a steakhouse and we have long term confidence in this product. Thank you.

Susan: Yeah.

Operator 1: That concludes the question and answer session. I would like to turn the conference back over to Brandi Piacente for any closing comments.

Operator: That concludes the question and answer session. I would like to turn the conference back over to Brandi Piacente for any closing comments.

And that concludes the question and answer session I would like to turn the conference back over to Brandi Piacente for any closing comments.

Brandi Piacente: Thank you once again for joining us today. If you have any further questions, please feel free to contact the IR team at NetEase. Have a great day. Thank you.

Brandi Piacente: Thank you once again for joining us today, if you have any further questions. Please feel free to contact the IR team at <unk>.

Brandi Piacente: Thank you once again for joining us today. If you have any further questions, please feel free to contact the IR team at NetEase. Have a great day. Thank you.

Brandi Piacente: Have a great day. Thank you.

Brandi Piacente: Yeah.

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