Q1 2025 NetEase Inc Earnings Call
Operator: Good day and welcome to the NetEase first quarter 2025 earnings conference call. Today's conference is being recorded.
Good day and welcome to the met as first quarter 2025 earnings Conference call.
Today's conference is being recorded.
Helen Wu: At this time, I would like to turn the conference over to Helen Wu. Please go ahead. Thank you, operator.
Speaker Change: At this time I would like to turn the conference over to Helen way. Please go ahead.
Helen way: Thank you operator. Please note that today's discussion will contain forward looking statements related to future performance of the company and are intended to qualify for the safe Harbor from liability.
Speaker: Please note that today's discussion will contain four looking statements related to the future performance. and are intended to qualify for the safe harbor from life. as established by the U.S. Private Security Litigation Reform Act. Assumptions, and other factors.
Helen way: Scottish regard the U S Private security Litigation Reform Act.
Helen way: Such statements are not guarantees of future performance and are subject to certain risks and uncertainties assumptions and other factors. Some of them are risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and it this discussion a general discussion of.
Speaker: Some of those risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's The general discussion of the risk factors that could affect NetEase's business and financial results is included in certain findings of the company with its securities and exchanges.
Helen way: The risk factors that could affect <unk> business and our financial results is included in certain findings of the company with the Securities Exchange Commission, including its annual report on form 20-F, and he knows smokers findings on the Hong Kong stock Exchange a website. The company does not take any obligation to update its forward.
Speaker: including its annual report on Form 20-F and the announcement and findings on the Hong Kong Stock Exchange. The company does not take any obligations to update its formula.
Helen way: Electronic payments.
Helen way: Except as required by the law.
Speaker: During today's call, management will also discuss certain non-gap financial... for a definition of non-GAAP financial measures and a reconsolidation of GAAP to non-GAAP financial results.
Helen way: 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 reconsolidation of GAAP to non-GAAP financial results. Please see the first quarter 'twenty 25 earnings news release issued earlier today.
Speaker: The First Quarter 2025 Earnings News Release Issued Earlier This Month. As a reminder, this conference is being recorded.
Helen way: As a reminder, this conference is being recorded in addition, an investor presentation and a webcast a replay of this conference call will be available on our corporate website at IR docs.
Speaker: In addition, an investor presentation and a webcast to replay this conference call will be available on the NetEase corporate website at ir.netease.com.
Bill Pang: Join us on the call from NetEase Senior Management, Mr. William Ding, Chief Executive Officer, and Mr. Bill Pang, Vice President of Corporate Development. I will now turn the call over to Bill, who will read the prepared remarks on William Thank you, Helen, and thank you, everyone, for participating in today's call.
Bill: Joining us on the call from <unk> senior imagine unless you're willing King Chief Executive Officer, and Mr. Bill <unk>, Vice President of the corporate development I will now turn the call over to Bill who will read the prepared remarks on William's behalf.
Bill: Thank you Helen 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.
William Ding: Before we begin, I would like to remind everyone that all percentages are based on RMB. We started 2025 with strong momentum. innovative content, and exceptional operations continue to underpin our growth. As we further globalize and diversify our expanding game portfolio, our total net revenue increased 7% year-over-year. Alongside the success of our new titles, our flagship titles continue to captivate players throughout the first quarter, reaching new record highs after decades of operation. This combination of new hit and longtime fan-favorite drove our total revenue from gaming and value-added services up by 12% year-over-year to RMB 24.0 billion.
Bill: We started 2025 with strong momentum.
Bill: Innovative content and exceptional operations continue to underpin our growth as.
Bill: As we further globalize and diversifying our expanded game portfolio.
Bill: Total net revenue increased 7% year over year.
Bill: Alongside the success of our new titles.
Bill: Such a titles continue to captivate players throughout the first quarter, reaching new record highs after decades of operations.
Bill: This combination of new hits and longtime factory weight drove our total revenue from gaming and better AD services up by 12% year over year to RMB 24 point is youll get it.
William Ding: Several new titles have recently debuted globally. and more players around the world are embracing our games than ever before. We now have a rich and growing global portfolio of games that spans a range of diverse genres, reinforcing our competitive edge in the dynamic gaming landscape with innovations that elevate our offerings and the industry as a whole.
Bill: Several new titles have recently debuted it globally.
Bill: More players around the world are embracing our games than ever before.
Bill: We now have a reach and growing global portfolio of games that stance ranch all established honors reinforcing our competitive edge in the dynamic gaming landscape with innovations that elevate our offerings and the industry as a whole.
William Ding: Starting with Small Revivals, its successful launch last December marked a major milestone in our portfolio and a meaningful step forward in our globalization journey. Backed by critically acclaimed gaming experience and dedicated live operations, it has continued to build strong momentum among players worldwide. in the first quarter. Their engagement remained high, and the launch of Season 2 in April brought renewed excitement. seemed around Hellfire Gala, a once-a-year celebration of mutant culture and identity. The seasonal update introduced a new map. The New Hero, and Fresh T-Masks. Welcoming both veteran players and newcomers to the living island. Following the update, Marvel Rivals reclaimed its number one position on Steam's Global Top Seller Chart.
Bill: Starting with smaller labels.
Bill: <unk> launched last December marked a major milestone in our portfolio at a meaningful step forward in <unk>.
Bill: Patient journey.
Bill: Backed by critically claimed gaming experience and dedicated life operations. It is continuing to build strong momentum among players worldwide.
Bill: In the first quarter.
Bill: So engagement remained high.
Bill: And the launch of season April brought renewed excitement.
Bill: Seemed around how far column once a year celebration of Nielsen culture and identity.
Bill: Seasonal update introduced a new map.
Bill: The new hero and Frac Cmos welcoming both veteran players and new commerce, leaving.
Bill: Leaving island.
Bill: [laughter] folding of the update my rivals reclaimed its number one position on <unk> Global Top center card.
William Ding: To deepen our connection with the player community, we are moving to a two-month season cadence, starting with season three, while keeping the momentum high by introducing a new hero each month. With continuous development and iteration, we are committed to delivering a distinctive and evolving gaming experience to players worldwide.
Bill: To deepen our connection with Tiger community, we're moving to a two months seasoned kato's, starting with seasons suite, while keeping the momentum high by introducing a new hero each months with.
Bill: With continuous development and iteration, we're committed to delivering a distinctive and you've always gave me experience to players worldwide.
William Ding: Next is Fred Punk, our fast-paced 5 vs. 5 tactical shooter game that has energized global fans with a sleek shooting experience, innovative shot cards, and bold art expression. Within just three days of its PC launch in March, the game achieved over 110,000 peak concurrent players and became number six on Steam's global top search.
Bill: Next page Frac pump or fast pace five versus five tactical shooter game that has energized global fans with a sleek shooting experience in the video side cars and bold art expression.
Bill: Within just three days office PC launched in March became achieved or 110000 peak concurrent players and became number six all students Global Top Center chart.
William Ding: Building on this momentum, we launched Chapter 2 of Season 1 on April 29th with over 70 brand-new shark cards. along with updated heroes and maps. With the update, FragPunk also debuted on consoles, making the game available to an even broader player base.
Bill: Building on this momentum we launched chapter two of season, one April 29 with over 70 brand new cars.
Bill: Now with update of heroes maps.
Bill: With update Frac pumps also tabulated on counsels, making the game available to an even broader player base.
William Ding: As we continue pushing the boundaries of the shooter experience with systematic innovation and upgrades, we're also growing the game's community and hope to make FragPunk a world-class title.
Bill: As we continue pushing the boundaries of the shooter experience with Cincinnati innovation and upgrades. We're also growing the games community and hope to make Frac pump.
Bill: Titles.
William Ding: We also just launched the much-anticipated once-human mobile edition on April 24. he quickly gained global attention, claiming the top spot on iOS download chart in more than 160 regions. The optimized handheld experience is highly valued by mobile players as we retain the depth of PC version while featuring cross-platform play, progression, and reward.
Bill: We also just launched the much anticipated once human Mobile addition on April 24th.
Bill: It quickly gained global attention.
Bill: Claiming the top spot on iOS download chart, you'd more than 160 regions.
Bill: The optimized handheld experience is highly valued by mobile players as we retain but that's all PC version, while featuring cross platform play progression and rewards.
William Ding: Meanwhile, the mobile launch generated even more community enthusiasm across platforms. driving the game to number 5 spot on Steam's Top Seller Chart. across PC and mobile. Our open world PvP and PvE phenomena is reaching more users.
Bill: Meanwhile, the mobile launch generated even more community excuse he has them across platforms driving the game to number five spot on Steve's top seller chart.
Bill: Across PC and mobile all open war Pvp and PV phenomena is reaching more users.
William Ding: Where Wings Meet has continued to draw players into its immersive world since its breakout domestic launch in December. Its ability to blend subtle storytelling, a richly layered historical setting, and high-fidelity graphics has made Where Wings Meet a game-changer in the open-world wuxia genre. We added more fresh content on March 28th, introducing Hexi, a brand new district set against a stunning desert landscape and attracting a growth of new players. By the end of March, more than 30 million players had joined the community and player engagement continues to be high, reinforcing the game's long-term potential.
Bill: Where we can smedes as continue to draw players into its immersive world CNC its breakout domestic launch in December.
Bill: Its ability to blend subtle storytelling.
Bill: Each layer to historical setting and the high Fidelity graphics has made aware when you meet a game changer in the ultra water we shall honor.
Bill: We added more fast content on March 'twenty is introducing a.
Bill: Brand, New district set against a stunning desert landscape and attracting a growth of new players.
Bill: By the end of March what are searching medium players had joined the community and player engagement continues to be high reinforcing the game's long term potential.
William Ding: We are excited to build on this success and reach more players, with plans to launch the game in more regions across PC, mobile, and console platforms later this year. These titles also demonstrated robust performances, driven by strategically tailoring experiences for local communities. The return of each title in 2024 reignited player enthusiasm, driving engagement to historical heights.
Bill: We are excited to build on this success and reach more players with plans to launch the game, even more regions across PC mobile console platforms. Later this year.
Bill: Okay.
Bill: Please the titles also demonstrated a robust performances driven by statistically tailored experiences for local communities.
Bill: Of each title in 2020 full reignited player enthusiasm driving engagement to historical highs.
William Ding: This was especially evident by Overwatch, which broke new records of peak concurrent players upon its relaunch on February 9. A brand new stadium mode was launched in China this April, alongside its global release. In addition, Momentum has been ongoing for... Both of which saw consistent popularity during Chinese New Year, with targeted in-game events and localized design. Notably, World of Warcraft achieved a leading sale through live commerce on social media, providing fans with an entertaining experience in a fresh way. Hearthstone came out with culturally resonant content, such as alternative art cards or signature cards inspired by Chinese painting and World of Warcraft pseudo-embroidery-inspired mount.
Bill: This was especially evident by Overwatch.
Bill: Both new records.
Bill: Peak concurrent players are probably its relaunch on February 19th.
Bill: A brand New stadium MAU was launch in China. This April alongside its global release.
Bill: In addition momentum happy ongoing for water.
Bill: Also which saw consistent popularity during Chinese new year with targeted in game events and localized design.
Bill: Notably World of Warcraft achieved a leading sales through live commerce on social media, providing fast without entertaining experience in a fresh way.
Bill: Hearthstone came out with culturally roster that content, such as alternative or a card or sickness or car inspired by Chinese painting and award of old crop Sutro embroidery inspired mouse.
William Ding: These creative designs rejuvenated the long-beloved IPs by infusing fresh elements that resonate with players, engaging both longtime fans and new players.
Bill: This creative designs rejuvenated the loans without the IP is by infusing fresh element that resonate with players engaging both long time fans and new players.
William Ding: In addition, Diablo 3 enters technical testing in April, paving the way for its re-entry into the Chinese market. Together, these successes demonstrate the stress of our operating capabilities and the close collaboration with our partners. Looking ahead, we are excited to bring players even more intriguing content, created and delivered with care by passionate teams and collaborators. As we celebrate the success of our new and returned titles, our established NetEase games continue to play a vital role in our portfolio. Our longstanding, beloved titles serve as foundational pillars and steady source of revenue with alluring content updates and continuous gameplay enhancements that deliver timeless appeal.
Bill: In addition, Diablo III enter technical testing April paving the way for its re entry into the Chinese market.
Bill: Together these successes demonstrate the strength of our operating capabilities and the close collaboration with our partners.
Bill: Looking ahead, we are excited to bring players even more intriguing content created and delivered with cure passionate teams and cooperators.
Bill: As we celebrated the success of our new and returned titles.
Bill: Establish netease games continue to play a vital role in our portfolio.
Bill: Our long standing beloved titles serve as foundational pillars, a steady source of revenue with allure in constant updates and continuous gameplay enhancements that deliver time based appeal.
William Ding: The Fantasy Westward Journey franchise is a prime example. After decades of operations, it continues to be one of China's most influential brands. In the first quarter, we celebrated Fantasy Wasp's Journey Mobile's 10th anniversary with a range of new content updates, including a crossover with renowned animation IP, Digimon. The update sparked player engagement, signalling a remarkable beginning for its next decade. Westwood Journey Online 2, another cherished classic, also maintained healthy traction in the first quarter with festive Chinese New Year events and interactive live streaming that reignited player passion.
Bill: Yeah.
Bill: The fantasy westward journey franchise is a prime example.
Bill: After a decade of operations. It continues to be one of China's most influential brands.
Bill: In the first quarter, we set up Brady and fantasy westward journey mobile test anniversary with a range of new content updates, including a crossover what's your reading on animation IP teach them all.
Bill: The update sparked player engagement secreting a remarkable beginning for a snacks taxes.
Bill: Westward journey online too.
Bill: Now their cherished classic.
Bill: Also maintained healthy traction in the first quarter with faster you have Chinese new year events and each active life streaming that reached 90 player passion.
Bill: Yeah.
William Ding: Another example is our iconic asymmetric battle arena game, Identity V. First introduced to global market in 2018, the player base greatly expanded in the first quarter, achieving a new quarterly high on top of its record-breaking momentum in 2024. The excitement extended into April, with registered players surpassing 400 million globally during Identity V's 7th anniversary celebration.
Bill: Another example is our iconic asymmetric battle Arena game I thought they did five.
Bill: First introduced to global market in 2018.
Bill: The player base greatly expanded in the first quarter.
Bill: <unk>, a new quarterly high on top of its record breaking momentum in 'twenty to 'twenty four.
Bill: The excitement extended into April.
Bill: With registered players, surpassing 400 billion globally.
Bill: I didn't need to five seventh anniversary celebration.
William Ding: Similarly, our action-based battle royale game, Naraka Playpoint, has built a strong global player base since 2021. The game saw new record revenue in the first quarter with our updated PVE account. Players can now team up and have fun formidable villains side-by-side, adding another layer of play through strategy. Skill Building, and Collaboration. Both Identity V, Asian Games version, and Naraka Bigpoint have also been named as the official esports events for the 2026 Aichi Nagoya Asian Games. Each is the first title in this genre to be included in the Asian Games, marking another breakthrough for domestically developed games on the international stage.
Bill: Similarly, our action based Battle Royale game Neuropathy point has built a strong global player base. She is plenty plenty of work.
Bill: The game, so new record revenue in the first quarter.
Bill: Updated pve content play.
Bill: Players can now tee them up and how fun formidable villains side by side.
Bill: Adding another layer of play through strategy.
Bill: <unk> building and collaboration.
Bill: Oh I thought did a five Asian games version and Morocco. Paypoint has also been named as the official esports events for the 2026, I actually not going I shouldn't games.
Bill: <unk> is the first title in the star to be included in the Asian games, marking another breakthrough with domestic thinking about games on the international stage.
William Ding: Moreover, this veteran title's ability to reach new milestones highlights the strength of our long-term operations, premium content, crossover events, and our increasing strength in esports operations.
Bill: Moreover, this veteran titles ability to reach new milestones highlight the strengths of our long term operations premium content crossover events and our increasing stress your sports operations.
William Ding: Moving to Anki Parking The game further solidified its leadership in the party game genre with robust sequential growth in the first quarter.
Bill: Moving to active Hockey League.
Bill: The game further solidified its leadership in the party game genre with robust sequential growth in the first quarter.
William Ding: Excitement leads up Aggie Island on Chinese New Year's Eve. featuring vibrant line art of performances. players jump into the New Year celebrations, enjoying live entertainment, joining in activities with friends, and creating a night to remember. The addition of the beloved Chinese animation IP, Calabash Brothers, added another layer of festivity, with Aggie Party attracting over 100 million players and new monthly players reaching a record high.
Bill: Excitement VITAS Achy Island on Chinese New year's Eve.
Bill: Fishing Viper in July off.
Bill: Performances.
Bill: Players jumped into the new year celebrations enjoying life entertainment joining activities with friends and creating a night to remember.
Speaker Change: The addition of the beloved Chinese and it makes your IP Calabash brothers added another layer or faster to the Chi with Achy parkey, attracting over 100 million players are new.
Bill: And you must be players, reaching a record high.
William Ding: As for our groundbreaking MMO game, Justice Mobile, it continues to raise the bar for innovation. In March, we introduced Starry Dreamland. a virtual amusement park in the heart of the Wuxia-inspired world. Packed with familiar attractions and activities that resonate with the younger generation, this new setting quickly became a hit. Just as mobile, it's also pushing technology boundaries. We continue to elevate the gaming experience, adding enhanced interaction with AI-powered MPCs, and improve the lighting effect through cutting-edge graphic technology. We have also made it a lot easier and more fun for players to get creative. With our upgraded creation system, players can produce their own video clips using in-game animations, complete with custom scripts, character motions, and voiceovers.
Bill: As far as groundbreaking MMO game, such as mobile continues to raise the bar for innovation.
Bill: In March we introduced star with Greenland.
Bill: A virtual amusement park in the heart of the inspire wall pack with familiar attractions and activities.
Bill: With the younger generation.
Bill: This new setting quickly became a hit.
Bill: Justice mobile, it's also pushing technology boundaries.
Bill: We continue to elevate the gaming experience.
Bill: Adding enhanced interaction with AI powered N P CS and improve the lighting effect through cutting edge graphic technology.
Bill: We have also made a lot easier and more fun for players to get creative.
Bill: With our upgraded equation system.
Bill: Players can produce their own video clips using ink game animation is complete at Wisconsin script capture motions and voice or worse.
William Ding: It's a powerful tool that opens the door to a whole new level of creative expression.
Bill: It's a powerful tool that opens the door to a whole new level of accretion creative expression.
William Ding: Justice Mobile's strong momentum has expanded to more regions since its launch in Hong Kong, Macau, and Taiwan last November, as has our leading basketball game, Dunk City Dynasty. Currently, Dongxidi Dynasty is targeting expansion to more regions across Western Market and Southeast Asia in May. Similarly, Racing Master has secured a solid position in Japan, Korea, and Southeast Asia. It's a game topping the iOS download chart across multiple regions with each geographic block. These solid operational metrics are a great indicator of what we can expect. in other markets when we bring these titles to more regions.
Bill: Just as mobiles strong momentum has expanded to more regions since its launch in Hong Kong, Macau and Taiwan last November.
Bill: Our leading basketball game Dumb series dynasty.
Bill: Currently don't see the dynasty is targeting expansion to more regions across western market Southeast Asia in mind.
Bill: Similarly racing Master has secured a solid position in Japan, Korea and Southeast Asia.
Bill: It was a game talking to L. S download chart across multiple regions with each geographic launch.
Bill: This solid operational metrics are a great indicator of what we can expect.
In other market when we bring these titles to more regions.
William Ding: As we work to build on the success of our existing games and introducing them to more players around the world, we have a range of exciting upcoming titles on the way. The new titles in our pipeline will continue to push the envelope of creativity and interaction, elevating our portfolio and the overall gaming experience we bring to our gaming community.
Bill: As we work to build on the success of our existing games and introducing them to more players around the world. We have a range of exciting upcoming titles on the way.
Bill: The new titles in our pipeline will continue to push the envelope of creativity and interaction elevating our portfolio and the overall gaming experience, we bring to our gaming communities.
William Ding: Marvel Mystic Mayhem, our super-hero team-based tactical RPG, is currently preparing for its official worldwide launch. The closed beta test 2.0 conducted in March. sparked massive passion within the community. where we gather valuable feedback from players to aid in the final touches.
Bill: Marvel Mystic Mayhem.
Bill: Our Super C O Tin based tactical RPG is currently preparing for its official worldwide launch but.
Bill: Close beta test 2.0 conducted in March.
Bill: Massive passion within the community, where we gathered a valuable feedback from players to aid in the final touches.
William Ding: With more details to be announced shortly, we eagerly anticipate introducing players to these exciting confrontations on a global scale.
Bill: With more details to be announced shortly.
Bill: We eagerly anticipate introducing players to this exciting consultations on a global scale.
William Ding: Some of our other titles under development include Destiny Rise. our epic sci-fi RPG shooter game featuring a new adventure set in the alternative Destiny timeline. This one is currently in active development and progressing as planned.
Bill: Some of our other titles under development include Designee rising.
Bill: Our ethics SIFI RPG shooter game, featuring a new adventure sat in the aisle.
Bill: Alternative testing timeline.
Bill: This one is currently in active development and progressing as planned.
William Ding: ANATA, our highly anticipated metropolitical RPG, is also deep in development. The game draws on our years of experience in the gaming industry to deliver innovative gameplay shaped by deep player insights. As across our portfolio and pipeline, we're reaching more players through a wider range of genres and expanding our global footprint. We're launching new titles and building on the momentum of our existing hits with updates players love, all while delivering new, inspiring experiences that resonate with fans around the world. By continuing to reimagine what's possible in gaming, we help advance the industry as a whole. Our commitment to quality and innovation shapes each area of our business.
Our highly anticipated Metropolitan Art P T a social deep in development.
Bill: The game draws or yourself experience in the gaming industry to deliver innovative gameplay shaped by the clear insights.
Bill: Okay.
Bill: That's across our portfolio and pipeline, we're reaching more players through a wider range of diners and expanding our global footprint.
Bill: We're launching new titles and building on the momentum.
Bill: <unk> case with updates players love, all while delivering new inspiring experiences that resonate with fans around the world.
Continuing to re imagine what's possible in gaming, we help as the industry as a whole.
Bill: Our commitment to quality and innovation shapes each area of our business.
William Ding: Looking out at your dark. with a rentalist focus on technology-driven innovation integrated into the user experience and a disciplined effort to foster long-term sustainability.
Bill: Looking now are you at all with a relentless focus on technology innovation integrated into the user experience and a disciplined effort to foster long term sustainability.
William Ding: You will now achieve record-high first quarter operating profit, maintaining the profitability momentum of previous quarters. Turning services revenue declined in Q1 as we continue to prioritize core services with strong long-term potential. By focusing on high-demand subjects, we advance quality operations and further strengthen profitability.
Bill: Without a cheap retro highest first quarter operating profit maintaining the profitability momentum of previous quarters.
Bill: Learning services revenue decline in Q1, as we continue to prioritize core services with strong long term potential.
Bill: I hope to see a high demand subjects, we divest quality operations and further strengthened the profitability.
William Ding: As a part of this effort, our online intelligent learning platform, Youdaolingshi, upgraded its college entrance planning system to deliver more seamless and personalized guidance based on individual needs, driving exceptional user engagement and loyalty. By prioritizing AI technology in the development of our products and services, we have seen strong user reception and robust growth in AI subscription sales. Our existing applications continue to evolve, with our dictionary and translation services now delivering industry-leading accuracy and a smooth user experience. powered by our proprietary large language model, Confucius. This model innovatively integrates multiple models and leverages online direct preference optimization during training.
Bill: As a part of this effort our online intelligent learning platform you Autolycus should upgraded its college anxious planning system to deliver more seamless and personalized guidance based on individual needs.
Bill: Exceptional user engagement and loyalty.
Bill: I prioritizing AI technology in the development of our products and services, we have seen strong user reception and robust growth in subscription sales.
Bill: Our existing applications continue to evolve with our dictionary and translation services now delivering industry, leading accuracy and a smooth user experience.
Bill: Powered by our proprietary large language model Confucius.
Bill: This model in a way to integrate multiple models and leverage on the line of Derrick preface all can invitation doing training.
William Ding: which enhances its ability to generate responses that are aligned with users' preferences. This elevated experience has driven increasing engagement in our AI translation service.
Bill: Which enhances its ability to generate responses that are aligned with users' preferences.
Bill: This elevated experience has driven increasing engagement our AI translation services.
William Ding: Youdao's online marketing services remain focused on high-quality growth. In the first quarter, sales from overseas grew sharply, driven by strength and collaboration with overseas partners and KOLs. We also boosted operational efficiency through advanced technologies. For example, we launched YoDot Magic Box, a video creation tool that simplifies the production of high-quality advertising videos through intuitive inputs, making ad content creation easier and more time efficient. Our smart devices segments maintain healthy year-over-year growth. Building our leading position in China's dictionary pen market, we continue to bring new innovations to the industry.
Bill: Online marketing services remained focus on high quality growth.
Bill: In the first quarter sales from oversea grew sharply.
Bill: Driven by strengths in the coalition with oversea upon us and the Kols.
Bill: We also boosted our personal efficiency sort of advanced technologies. For example, we launched you'll without magic box a video accretion to that simplifies the production of high quality advertising videos through intuitive impulse, making add constant accretion easier and more time efficient.
Bill: Our smart devices segment maintained healthy year over year growth.
Bill: The building, our leading position in China's sticks and repair market, we continue to bring new innovations to the industry.
William Ding: In the first quarter, we launched Youdoc SpaceOne, a next-generation device equipped with a larger screen than dictionary pens and the ability to answer students' open-ended questions in real time, much like a human tutor. Powered by advanced large-language models, YouDot SpaceONE can accurately interpret images, respond with natural voice interactions, and deliver highly accurate answers across a wide range of school grade levels.
Bill: In the first quarter, we launched you without spacewalk, a next generation device equipped with a larger screen that victory passed and the ability to ask their students open ended questions in real time.
Bill: Much like a human tutor.
Bill: Part of my advanced large language models, you down space, one can accurately interpret images respond with natural voice interactions and deliver highly accurate answers across a wide range of school grade levels.
William Ding: As our online businesses continue to explore avenues for delivering meaningful experiences in entertainment and learning, the NetEase family remains committed to enriching people's lives. and Lifestyle and Product with services that consistently impress our users with exceptional quality.
Bill: That's our online businesses continue to explore avenues for delivering meaningful experiences in entertainment and learning.
Speaker Change: These family remains committed to reaching People's lives.
Speaker Change: And product lifestyle and product with services that are consistently impressed our users with exceptional quality.
William Ding: Take Yanxuan as an example. A strong commitment to quality and innovation drove another quarter of healthy performance across our core product categories. In the first quarter, our pet product and household cleaning items remained top sellers within their category on major e-commerce platforms. Particularly, the signature product maintained strong momentum, while new releases, such as our Car Scents Cup and limited edition New Year Bathroom Fragrance, saw strong consumer demand.
Speaker Change: Yeah, I think example.
Speaker Change: Our strong commitment to quality and innovation drove another quarter of healthy performance across our core product categories.
Speaker Change: In the first quarter, our pet product and household cleaning items remain top sellers within their category a major e-commerce platforms, particularly the signature product maintained strong momentum with new releases, such as our car Scott Carson Cup and limited edition New York.
Speaker Change: Bathroom fragrancy saw strong consumer demand.
William Ding: We were especially delighted that in March, one of our cat food products specially formulated to support healthy fur, received the 2025 Pet Orange Dot Award, a notable recognition from the pet industry.
Speaker Change: Well, we're especially delighted that in March one of our Catholic products, especially formulated to support healthy for received the 2025, Pat on Stock Award a notable recognition from the past industry.
Speaker: Additionally, ESG initiatives are ongoing priorities for NetEase.
Speaker Change: Additionally, ESG initiatives, our ongoing priorities for nineties.
Speaker: Earlier today, we published our sixth annual ESG report outlining our progress towards sustainable growth, transparency, and social responsibility. We believe that technology... can both empower and inspire. Through AI-driven innovations, we're redefining entertainment experiences while modernizing traditional industries for safer, more efficient production. Our business goals reflect the trust our users place in us, further motivating our efforts to serve our community. While our business has limited environmental impact due to its predominantly online nature, we continue to enhance our carbon reduction efforts across data centers and office campuses to strengthen operational resilience. in 2024 by prioritizing energy saving measures within our operation.
Speaker Change: Earlier today, we published our sixth annual ESG report outlining our progress towards sustainable growth transparency.
Speaker Change: Responsibility.
Speaker Change: We believe that technology can.
Speaker Change: Both empower and inspire so AI driven innovations, we're redefining entertainment experiences, while modernizing traditional industries for safer more efficient production.
Speaker Change: Our business reflect the trust or use their place in us further multi leading our efforts to serve our communities.
Speaker Change: Our business has limited environmental impact due to its predominantly online nature, we continue to enhance our carbon reduction efforts across data centers and office campuses to strengthen operational resilience.
Speaker Change: In 2020 full by apart Hiseq energy saving measures within our operations, we successfully achieved a 16% reduction in greenhouse gas emissions compared to the previous year.
Speaker: We successfully achieved a 16% reduction in greenhouse gas emissions compared to the previous year. Leading ESG rating organizations have also recognized our progress in sustainability.
Speaker Change: Leading ESG rating organizations have also recognized our progress is sustainability.
Speaker: Notable eaters. MSCI upgraded us from A to AA in this latest assessment, designating NetEase as a leader among 237 companies in the global media and entertainment sector. S&P Global included us in this 2025 Sustainability Yearbook. And Sustainality has rated us as a low-risk company for the six consecutive years. Each of these honors speak to the dedication and ESG standard we uphold across our company.
Speaker Change: Notably.
Speaker Change: M S C I upgraded us from eight to double aid in this latest assessments, that's like making that is as a leader among 237 companies in the global media and entertainment sector.
Speaker Change: S&P global including US in this 20th twenty-five sustainability yearbook.
Speaker Change: And it's this analogy that's ready to us as a low risk company for the sixth consecutive years.
Speaker Change: Each of this honors speak to the dedication and ESG standards, we uphold across our company.
Speaker Change: Yeah.
William Ding: As we look to the months ahead, we are encouraged by the global momentum we have established and the breadth of opportunities across our increasingly diversified game portfolio and broader NetEase family of businesses. With a robust pipeline of new releases, continued global expansion, and ongoing enhancement to our most iconic franchises, we are well-positioned to sustain our growth and deepen our connection with players worldwide, creating more value for players, partners, and shareholders.
Speaker Change: As we look to the months ahead, we are encouraged by the global global momentum, we have established and the breadth of opportunities across all of our increasingly diversified game portfolio and broader night these family of businesses with.
Speaker Change: With a robust pipeline of new releases continue the global expansion and ongoing enhancement to our most iconic franchises, we are well positioned to sustain our growth and deepen our connection with players worldwide, creating more value for players partners and shareholders.
William Ding: That concludes William's comments.
William: That concludes William's comments.
Bill Pang: I will now provide a brief review of our 2025 first quarter financial results. Given the limited time on today's call, I will be presenting some abbreviated financial highlights.
Speaker Change: I will now provide a brief review of our 225 first quarter financial results.
Speaker Change: The limited time on today's call I'll be presenting some abbreviated financial highlights we encourage you to read through our press release issued earlier today for further details.
Bill Pang: We encourage you to read through our press release issued earlier today for further details. Total net revenue for the first quarter will earn $28.8 billion, or $4.0 billion U.S. dollars, representing a 7.4% increase year-over-year. Meanwhile, current contract liabilities will earn $17.7 billion, up 16% quarter-over-quarter. Total net revenue from our games and related VNs will earn $24.0 billion, up 12% year-over-year. Specifically, net revenues from online games will be $23.5 billion, up 14% quarter-over-quarter and 15% year-over-year. This growth was primarily driven by increased revenue contributions from key PC games, such as newly launched titles We're Winning Meets and Marvel Rivals, as well as established mobile games like Identity V.
Speaker Change: Total net revenue for the first quarter wont be $28 8 billion or 4.0 beta in U S dollars, representing our seventh.
Speaker Change: The increase year over year.
Speaker Change: Well kind of contract liabilities were RMB, 17, 7 billion up 16% quarter over quarter.
Speaker Change: Total net revenue from our games I related V S or RMB 24.0 opinion.
Speaker Change: 12% year over year.
Speaker Change: Specifically net revenues from online games will be $23 5 billion up 14% quarter over quarter and 15% year over year.
Speaker Change: This growth was primarily driven by increased revenue contributions from key PC games, such as newly launched titles, where meis and marble rivals as far as established mobile games like ideally to five.
Bill Pang: Specifically, net revenues for our PC games accounted for approximately 34% of our total online games revenue, representing an increase of 13% quarter over quarter and an increase of 85% year over year. Yu Dao's net revenue was under $1.3 billion, representing declines of 7% year-over-year and 3% quarter-over-quarter. This was primarily due to strategic structural improvement in the learning services segment, which is increasingly focused on high-demand subjects. NetEase Cloud Music Net Revenue will earn $1.9 billion, declining 8% from same period last year and 1% from previous quarter. This was primarily due to decreased revenue from social entertainment services.
Speaker Change: Specifically net revenues for our PC games accounted for approximately 34% of our total online games revenue, representing an increase of 13% quarter over quarter and an increase of eight 5% year over year.
Speaker Change: Yeah.
Speaker Change: You would also net revenue were RMB, one 3 billion.
Speaker Change: Representing the clients up 7% year over year and 3% quarter over.
Speaker Change: Water.
Speaker Change: This was primarily due to strategic structural improvement in the learning services segments, which is increasingly focus on high demand subjects.
Speaker Change: Nike's call music net revenue will be 1.9 billion declining 8% from the same period last year, a 1% from previous quarter.
Speaker Change: This was primarily due to decreased revenue from social Entertainment services.
Bill Pang: Net revenue for innovative businesses and others will only be $1.6 billion, decreasing by 17% year-over-year and 29% quarter-over-quarter. The decline was mainly due to decreased net revenue from Yanxuan, advertising services and certain other businesses in this segment. Gross profit for the first quarter of 2025 was RMB 18.5 billion, up 9% year-over-year and 14% quarter-over-quarter. This was primarily driven by increased net revenues from online games, as mentioned above. Our total gross profit margin was 64.1%. compared with 63.4% for the same period in 2024. Specifically, in more detail, gross profit margin for games and related VES was 68.8%, compared with 69.5% in the same period last year.
Speaker Change: Net revenue for innovative businesses and others were RMB, one 6 billion decreasing by 17% year over year and 29% quarter over quarter the.
Speaker Change: The decline was mainly due to decreased revenue from yet yet advertising services and sort of other businesses in this segment.
Speaker Change: Gross profit for the first quarter was 2025 was RMB 18, 5 billion up 9% year over year and 14% quarter over quarter.
Speaker Change: This was primary driven by increased net revenues from online games as mentioned above.
Speaker Change: Yeah.
Speaker Change: Our total gross profit margin was 64, 1%.
Speaker Change: Compared with 63, 4% for the same here in 'twenty to 'twenty four.
Speaker Change: Specifically in more detail gross profit margin for our games and P. S was 68, 8% compared with 69, 5% in the same period last year. The change was primarily due to fluctuations in product mix.
Bill Pang: The change was primarily due to fluctuations in product mix. The operating expense for the first quarter was RMB 8.0 billion, or 28% of our net revenue. Taking a closer look at our cost composition, our selling and marketing expenses as a percentage of total net revenue were 9.4%, compared with 15.0% for the same period last year, mainly due to decreased spending on gaming promotions during the quarter. Our R&D expenses as a percentage of total net revenues remain stable year-over-year at 15.2% in the first quarter, compared with 15.5% for the same period last year.
Speaker Change: Yeah.
Speaker Change: Operating expense for the first quarter was RMB 8.0 billion or 28% of our net revenues.
Speaker Change: Taking a closer look at our cost competition.
Speaker Change: Our selling and marketing expenses as a percentage of total net revenue with nine 4% compared with 15.0% for the same period last year, mainly due to decreased spending on gaming promotions during the quarter.
Speaker Change: R&D expenses as a percentage of total net revenues remained stable year over year and 15, 2% in the first quarter compared with 15, 5% for the same period last year, we remain committed.
Bill Pang: We remain committed to investing in content creation and product development. The effective tax rate was 15.3% for the first quarter. As a reminder, the effective tax rate is presented on an accrual basis, depending on applicable policies and our operation. Our non-GAAP net income attributable to shareholders for the first quarter totaled RMB 11.2 billion, or 1.5 billion U.S. dollars, up 32% year-over-year. Non-gap basic earnings per ADF for the quarter was $2.00, $2.44 U.S. dollars, or $0.49 U.S. dollars per share.
Speaker Change: So you're investing in concentration and product development.
Speaker Change: The effective tax rate was 15, 3% for the first quarter as a reminder, the effective tax rate is presented on an accrual basis, depending on people policies and our operations.
Speaker Change: Our non-GAAP net income actually goes to shareholders for the first quarter totaled RMB 11 points Hubei that well, one 5 billion U S dollars up 32% year over year.
Speaker Change: non-GAAP basic earnings per ADR for the quarter was $2 $2 44 U S dollars or 49 cents U S dollar per share.
Bill Pang: Additionally, our cash position remains robust, with net cash of approximately RMB 137.0 billion as of March 31, 2025, compared with RMB 131.5 billion at the end of 2024. In accordance with our dividend policy, we are pleased to report that our Board of Directors has approved a dividend of $0.135 U.S. dollars per share, or $0.675 U.S. dollars per ADF.
Speaker Change: Additionally, our cash position remains robust with net cash of approximately RMB 137.0 beta in as of March 31st 2025, compared with RMB 131, 5 billion at the end of 'twenty 'twenty four.
Speaker Change: Quarters, we saw the dividend policy. We are pleased to report that our board of directors has approved a dividend.
Speaker Change: $13.05 per share or 67, five stats U S dollar per avs.
Bill Pang: Lastly, under our current $5 billion U.S. share repurchase program, which started in mid-January of 2023, we have repurchased approximately 21.6 million ADS as of March 31, 2025, for a total cost of approximately $1.9 billion U.S.
Speaker Change: Lastly, under our current 5 billion U S dollar share repurchase program, which started in mid January of 2023, we had repurchased approximately $21 6 million at a D. S. As of March 31st 20 to 25 for a total cost of approximately one point might be that U S dollars.
Bill Pang: Thank you for your attention. We would now like to open the call to your questions.
Speaker Change: Thank you for your attention we will now like to open the call to your questions operator place.
Operator: Operator, please. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask questions.
Speaker Change: Thank you if you wish to ask a question. Please star one on your telephone and wait for your name to be announced.
Speaker Change: You wish to cancel your request.
Speaker Change: Gotcha.
Speaker Change: If you're on a speaker phone please pick up the handset to ask your question.
Operator: To 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.
Speaker Change: For the benefit of all participants on today's call. If you wish to ask a question to management in Chinese places immediately repeat your question in English. Please limit your questions to one at a time.
Operator: If you wish to have follow-up questions, please free-join us.
Speaker Change: If you wish to have follow up questions. Please free joined the queue.
Miranda Zong: The first question comes from Miranda Zong with Bank of America. Please go ahead. Good evening. Thank you for accepting my question. Your company has a very strong performance.
Speaker Change: Your first question comes from Miranda Zhang with Bank of America. Please go ahead.
Speaker Change: Yeah.
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Miranda Zong: My question is about the fifth personality game. We see that this game has maintained a very strong performance throughout the past year.
Speaker Change: I'm glad you go you'll see some county, Youll see Doug fortunate etonian each of the pouch for telecom seemed like it could be all.
Miranda Zong: It has become one of the top games in the company's mobile game products.
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Chen: I'd like to invite Director Chen to share with us the reason why we created this game. After talking about NetEase's future, what do you think about the game's growth? Do you have any suggestions for the rest of the game's revival?
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Miranda Zong: 我翻譯一下我的問題 I will translate my question Thank you for taking my question. My question is about identity...
Speaker Change: Lindsey.
Speaker Change: Thank you for taking my question. My question is about I think if you see them. So this game had a consistent and strong performance throughout last year and is now one of the top game among companies skin portfolio can management share the reasons behind and how to think about the game's gross going.
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Speaker Change: Any implication to the revival of either okay. Thank you.
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Chen: 《第五人格》是一个已经有六年时间的PVP的不对称竞技游戏 我们整个团队在过去的六年时间里面 持续不停的投入产品的优化 它不但在中国市场取得成功 在日本市场同时也是一直保持着领先地位 我们公司其他团队也从《第五人格》的成功里面学到了许多的经验 我们也希望这种经验能够体现在其他游戏产品的运营上 In the future, we will continue to invest more resources in the fifth personality game. 让大家能体验到更多不对称竞技游戏所带来的乐趣,谢谢。 so that everyone can experience more fun from asymmetric games. Thank you. Thank you for your question. Yeah, you're right, Identity V, being a very unique asymmetric, you know, PvP game, has been there for six years. And during the past six years, we never stopped, keep investing, keep optimizing, keep improving this game. And as a result, the game is not only very successful in China, it's actually in a very leading position in Japan as well.
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Speaker Change: Thank you for your question, Yeah, you're right.
Speaker Change: I didn't hear five being the very unique asymmetric Pvp game has been there for six years and during the past six years, we never stopped keep investing keep optimizing keep improving this game.
Speaker Change: And as a result of the game is not only very successful in China. It's actually are in a leading position in Japan as well.
Chen: You're right, our other teams, actually, they learned a lot from the hands-on experience of Identity V team, to how to keep improving the operations, continuous operations improvement of our other games. Looking to the future, Identity V will keep investing more and more resources into the game Identity V and to bring the fun of asymmetric PvP to more players. Thank you.
Speaker Change: Youre right all other teams actually they learned a lot from the hands on experience of either the five Kim.
Speaker Change: Two how to keep improving other the accretions computer's operation improvements of all other games.
Speaker Change: Looking to the future I didn't if I, if we'll keep we'll keep investing to more and more resources into the became I didn't hear you fine.
Speaker Change: To bring the fun of asymmetric P. P. Two more play players. Thank you.
Speaker Change: Sure.
Speaker Change: Yeah.
Lincoln Kong: Your next question comes from Lincoln Kong with Goldman Sachs. Please go ahead. Thank you, Mr. Ding.
Speaker Change: Your next question comes from Lincoln Tong with Goldman Sachs. Please go ahead.
Lincoln Tong: Yeah sure.
Lincoln Kong: Thank you, Mr. Guan, for accepting my question.
Speaker Change: And typically with you will know what the one piece is Glenn with the Maui, Jim from Japan.
Lincoln Kong: My question is about MW1. After MW1 was released, we have seen some fluctuations in the number of MW1 users.
Lincoln Tong:
Lincoln Tong: Hi, Sasha and showing them what do you think that kind of all the tonnage if you will.
Speaker Change: Sure, yes, he or.
Lincoln Kong: I am thinking about how to ensure the continuous popularity of MW1. As mentioned, MW1's new season will be shorter than before, and the speed of hero updates will be increased. What changes and adjustments will be made in the long-term operation of the game and the implementation of future changes? Let me translate it myself.
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Lincoln Kong: Thank you, Majuan, for taking my question. So my question is about Marvel Arrival. So we have seen some user number volatility in the recent months. How should we think about to ensure the lifecycle, the longevity of this IP? I think the management talking about we're going to shorten the season length, season time going forward and also introduce more frequently of the hero and the characters. So going forward, should we think about more adjustment in terms of the long-term operation and monetization strategy?
Speaker Change: Thank you management for taking my question.
Speaker Change: So my question is about the Marvell arrival, so we have seen some user.
Speaker Change: I am very volatility in recent months, how should we think about two to ensure it.
Speaker Change: Lifecycle or the longevity of this IP.
Speaker Change: Imagine when talking about two weeks in a shortened season.
Speaker Change: Season, Atlanta assets in time going forward and also introduce more frequently out with that.
Speaker Change: He wrote in the characters so going forward should we think of voluntary more adjustment.
Speaker Change: And in terms of long term operation and amortization strategy. Thank you.
Speaker: Thank you. In April of this year, NetEase Inc.
Speaker Change: Molly simple sorry, gene, yes, yeah, well, mostly U S.
Speaker: will launch a competition called SR. The new content of this season is widely loved by players, and there is also a clear boost to our product data. The data of the game will fluctuate according to the season's update rhythm. This is a relatively normal phenomenon in season-updating products. Users will also continue to update in this process.
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Speaker: Our current plan is to start with the S3 season and to adjust the season's update cycle from three months to two months.
Speaker Change: Well, then lieutenants, you'll have food home, if it's outside U S. We might say its because you sold sheet Youll Sans Covid goes away.
Speaker: At the same time, in May of this year, we will launch the MW2 series of tournaments to build the tournament ecosystem. We believe that a more efficient content update rhythm will effectively stabilize and improve the game's various data.
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Speaker: Thank you. Thank you for your question. As you mentioned, we introduced the Season 2 update in April, which achieved wide popularity among players and resulted in a significant boost over operating metrics. For season-based products, it's normal to observe fluctuations, you know, in operating metrics that align with the cadence of seasonal updates. And the process itself will actually also help to solidify the user base. Starting from Season 3, we will reduce the season update internal from three months to two months.
Speaker Change: Yeah.
Speaker Change: <unk>.
Speaker Change: Thank you for your question.
Speaker Change: As you mentioned, the we introduced the season too.
Speaker Change: In April which achieved wide popularity among players and resulted in the suite gives us both over operating metrics.
Speaker Change: Four season, basically the products, it's normal to ups or fluctuations in operating metrics that align with the cadence all seasonal updates.
Speaker Change: The process itself will actually also help to satisfy the user base.
Speaker Change: So starting from season, three will reduce the seasonal updates our internal from three months to two months.
Speaker: And additionally, we will initialize Marvel Rivals e-sports event in May to develop our e-sports ecosystem. We believe that with more efficient content updates and our evolving esports ecosystem, we'll see gradual improvement across all in-game metrics.
Speaker Change: Additionally, we will initialize Marvel arrival my rivals esports events in may to tape out of our esports ecosystem.
Speaker Change: We believe that with more.
Speaker Change: Efficient and constant updates and our evolving esports ecosystem.
Speaker Change: We'll see gradual improvement across all metrics. Thank you.
Speaker: Thank you.
Felix Liu: Your next question comes from Felix Liu with UBS. Please go ahead. Thank you, Guan Licheng, for accepting our questions. Congratulations on your very strong performance and the outstanding performance after the launch of Tornado and First Punk. Since our self-proclaimed game is doing very well overseas, we are also paying attention to some news from our overseas studio audience.
Felix Liu: Your next question comes from Felix Liu with UBS. Please go ahead.
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Felix Liu: So I would like to ask Guan Licheng what are your thoughts on the current overseas market strategy? Thank you. Let me translate myself. First, thank you, Benjamin, for taking my question. Congratulations on the strong results and the strong performance of Marvel Rivals and Frank Punk.
Speaker Change: So you look at you guys have plenty of time.
Speaker Change: Okay.
Speaker Change: Washington, The caveat Jonathan.
Speaker Change: Yeah, let.
Speaker Change: Let me translate myself.
Speaker Change: Thank you management for taking my question congratulations on the strong results and the strong performance at the muscle basketball are satisfied.
Felix Liu: Could Benjamin share how you think about your latest strategy for overseas markets given the backdrop of the strong performance of your domestically developed games and the news of shutdowns of some of your overseas studios? Thank you. Our company has always valued the overseas gaming market outside of China, such as Europe, America, and Japan. In the past period of time, Some of the overseas studios have been shut down because of the future positioning and quality of the products. At the same time, you can also see that since December last year, NetEase Inc., China Resources, Manwei Zengfeng, and Flatpink We have achieved good results overseas.
Speaker Change: The next question, how you think about your latest strategy for overseas markets given the backdrop of this film performance domestically developed games and then use that shutdowns from San Mateo overseas C deals. Thank you.
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Donna: Thanks Donna.
Speaker: We believe in our positioning and ability to predict the overseas market.
Donna: Well, Michelle she woman theme that way, it's just kind of sticking.
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Speaker: 都是符合公司 All of them are in line with the company 目前所定的一些规划 我们相信未来会有更多的 符合海外市场的游戏作品,由网易研发出来。 Thank you. Thank you for your questions. For a long period of time, we have actually been paying a lot of attention to the overseas market, including the European market, North American market, Japan, and the Korean market. In the past period of time, we did close some of our overseas studios, but those decisions were purely made based on the positioning of the future product and consideration of product quality. Looking, as you see, you know, since last December, you know, our domestically made games, namely Frag Pong, Animal Rivals, they indeed achieved not bad result in overseas markets.
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Donna: Yeah.
Donna: Yeah.
Donna: Thank you. Thank you for your questions Yeah for a long period of time, we have actually paying a lot of attention to the oversea market.
Donna: Including our European market, North American market are Japan, and Korea market in.
Donna: In the past a pure time, we'd need to close some of our C studio, but those decisions was purely are made based on the our positioning of the future product.
Donna: Consideration all product quality.
Donna: Looking.
Donna: As you see you know.
Donna: Since last December you know Oh domestic made games, namely Frac pump out of my rivals.
Donna: Indeed achieved a not bad result in overseas market and Oh, We believe you know this is in line with our Oh, our judgment and our how we see the the OSV market Oh, According to our plan and we believe.
Speaker: And we believe, you know, this is in line with our judgment and our, how we see the overseas market according to our plan. And we believe that in the future, NetEase will make more and more games suitable for global market. Thank you.
Donna: In the future ladies will make more and more games suitable for global market. Thank you.
Yang Liu: The next question comes from Yang Liu with Morgan Stanley, please go ahead. Thank you for the opportunity to ask questions. First of all, congratulations to the company for its excellent performance.
Speaker Change: Your next question comes from Yang Li with Morgan Stanley. Please go ahead.
Speaker Change: Okay. She said she went it's usually shawshank Wuxi, who says they don't who sort of yes you.
Yang Liu: My question is about The Lord of the Rings. In this game, the player's feedback and commercialization performance have continued to improve. I would like to ask what effective measures the company has taken and what the next operation plan will be.
Speaker Change: So we're the ones who use your Guang Yang Mi Sundar.
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Yang Liu: Let me do the translation. The well-wings meet for improving feedback and monetization. What has NetEase done here? It's proven effective. And what is the next step for this title's operation?
Speaker Change: Let me do the translation.
Speaker Change: Where wings meet so improving feedback and monetization.
Speaker Change: Now that you've done here.
Speaker Change: It's proven effective and do what's the next step for these titles operation.
Yang Liu: Thank you.
Speaker Change: Okay. Thank you.
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Speaker: 夜云十六声是网易过去耗费五年时间重点打造的一个古代夜云十六周场景的 After the game was released on December 26th last year, it received a lot of positive reviews from users. This game is very important to the company, it is our free and open world. This is a game with an ancient theme that is suitable for Chinese users. We will continue to invest in more resources in the future to make this game... 美术表现 The gameplay is top-notch, and we welcome players to experience the content of this game on PC, because the gaming experience on PC is the best. The success of NetEase 16, the success of the early stage, the success of the current stage, has also provided us with a very rich experience of research and development.
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Speaker: We will continue to expand this kind of experience into other works. So I believe NetEase will continue to be a long-term project in the next five to ten years.
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Speaker: Thank you. Thank you for your question.
Speaker Change: Thank you for your question well, where we are with me. It's a it's a game that we spent five years to develop.
Speaker: Whirlwinds Meets is a game that we spent five years to develop, an Asian-Chinese historical background open world game. When it was released in late December last year, it, you know, got a lot of acclaimed reviews from users. We actually pay a lot of attention to this game. It's a very important game to us. And we are in the In the future, we're going to keep investing to the game, namely to further polishing the art representations, keep polishing the gameplays. So it'll be a long-term game for us. When players play the game, we actually we encourage players to play on PC, because on the PC, it has a much better graphical presentation.
Speaker Change: Patient Chinese ships will go background work in one this are released.
Speaker Change: In late December last year, it's a you know call it.
Speaker Change: A lot of our claim reviews from from users.
Speaker Change: We actually pay a lot of attention to this game. It is a very important game to us.
Speaker Change: And we are in this.
Speaker Change: In the future we're going to keep.
Speaker Change: Investing to again, namely too for the polishing the art representation Ah Kee polishing became place.
Speaker Change: So it'll be a long term game for US one players to play the game, we actually we encourage players to play on PC because on the P. C.
Speaker Change: Much better graphical presentations.
Speaker Change: Presentations.
Speaker: When we meet, the success so far has provided us a lot of hands-on experiences, and we're going to learn from the experiences and deploy them into other products to help our other products to be successful. We believe when we meet in the coming five to ten years, it's going to be one of our evergreen titles.
Speaker Change: Wherewith meats.
The success. So far has provided us a lot of hands on experiences and so we're going to.
Speaker Change: Learn from the experiences and deploy them into other product to help all other product to be successful.
Speaker Change: We believe our wind speeds in the coming five to 10 years.
Speaker Change: It can be a one off our evergreen titles.
Speaker Change: Thank you.
Ritchie Sun: Your next question comes from Ritchie Sun with HSBC, please go ahead. Mr. Ding, Bill, Kathy, good evening. Congratulations to the company on your excellent performance. My question is about Cheers World. After this mobile game was launched, the download volume was very bright, but the deviation was still restrained. How would the management team evaluate the performance and potential of Cheers World? Where is the core of the product? What plans do we have to improve the ability to deviate? Thank you, management, for taking my questions.
Speaker Change: Your next question comes from Richard <unk> with HSBC. Please go ahead.
Richard: Hi, Bill.
Speaker Change: Kathy I shall goes he goes.
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Speaker Change: Thank you management for taking my questions. Congrats on the very robust quarterly results. My question is about one human the mobile version has done well in the download rank, but monetization remains quite a conservative so how management our rate performance off once humor.
Ritchie Sun: Congrats on a very robust quarter of results.
Ritchie Sun: My question is about Once Human. The mobile version has done well in the download rank, but monetization remains quite preservative. So how would management rate the performance of Once Human and its potential?
Speaker Change: And its potential and what are the key competitive edge and differentiation of this product and whatnot that plants you will further enhance the combos commercialization going forward. Thank you.
Ritchie Sun: And what are the key competitive edge and differentiation of this product? And what are the plans to further enhance the commercialization going forward?
Speaker: Thank you. After the launch of Next Destiny, it took first place in 166 countries and regions and brought more than 6 million new users to the world in the first week. Next Destiny, NetEase Inc. Therefore, the top core players will play on both ends and charge at the PC end. After the release of World of Warcraft, the PC end has steadily increased by 90%, and the charge has increased by 500%. At present, the charge ratio on the PC platform is more than 50%. At the same time, it reached the top 5 on the Steam sales list.
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Speaker: The player's payment transfer on the PC side has a certain degree of influence on the performance on the speaker board of the mobile end. Next Destiny is a SoC game based on the Japanese racing system. This is different from the advantages and characteristics of other SoC products and completely solves the problem of the player's character development. thank the 因此后续我们会围绕这一点,通过两个方向来持续满足玩家的需求和营收的。 Therefore, we will continue to satisfy the players' needs and sales needs in two ways around this point. Gotta share First, we will add new gameplay scripts. We will launch different gameplay rules and new scripts to meet the players' needs in SOC, such as freedom of construction, world exploration, and PvP confrontation.
Speaker Change: Why do you think she is it does have a full pizza U can English on it you don't.
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Speaker Change: Yeah on the functional fisherman, who wind down as usual so you saw that.
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Speaker Change: Can you keep it.
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Speaker: Secondly, we will provide users with an open, exclusive, private service, exclusive ecosystem, giving these players the freedom to open and set up exclusive server functions, to meet players' custom needs for the SOC game world.
Speaker Change: Yeah, well monthly.
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Speaker: Thank you.
Speaker Change: Yeah.
Speaker: Thank you for your question. Once Human Mobile launched, it's very successful. It's achieved top downloading spot on 166 regions on iOS. In the first week, we got more than 6 million users.
Speaker Change: Thank you for your question.
Once you have mobile launched its very successful. It's a you know a chief's top downloading spot a onetime 166.
Speaker Change: We just I O S. A in the first week, we got you know a more than 6 million unique users are regarding the our what do you observe on the Oh.
Speaker: Regarding the, uh, what do you observe on the, uh, uh, Top Crossing Chart. One of the nature of this game is that it's a cross-play game. Players, they can choose to play on PC and on mobile, it's the same account. So a lot of top players, they play on both clients, and they choose to play on the PC side. Actually, after the mobile version launch, from the PC side, the concurrent user, they increased by 90 percent, and payment actually drove by 500 percent. And the payment on PC actually increased—the payment ratio from PC actually is more than 50 percent.
Speaker Change: Top grossing chart one of the nature of this game is that it's a cross play game.
Speaker Change: First they play they can play triple play on PC.
Speaker Change: It's the same account so a lot of Oh, you know top players are they play on on both client and Oh, they chose to play a more PE.
Speaker Change: On the PC side.
Speaker Change: After the mobile version launch from the PC side.
Speaker Change: The card to use or the AR increased by 90%.
Speaker Change: And payment actually drove by 500%.
Speaker Change: And it's the the payment on PC actually increased.
Speaker Change: The payment ratio from PC actually it's more than 50%.
Speaker: And that's why you see when we launched the mobile game, actually on Steam, it's ranked on one of the top setter charts. And so probably the players playing on PC actually kind of impacted the top-grossing chart ranking on mobile.
Speaker Change: And.
Speaker Change: That's why you know this you'll see when we launched a mobile game actually the steel on steel Runcorn one of the top helps at a chart.
Speaker Change: And so.
Speaker Change: So probably the the.
Speaker Change: Players play on PC actually kind of impacted the top grossing chart ranking on mobile.
Speaker: For the specialty of this game, this is kind of a script-based, seasonal-based game. That's one difference compared to other SOC type of game.
Speaker Change: For the especially of the scam.
Speaker Change: This is a kind of a stripped faced seasonal based game.
Speaker Change: That's one difference compared to other I suppose they type of game.
Speaker: In the future, we're going to further satisfy the gamers' demand from two angles. One is we're going to add new gameplays, new script-based gameplays that can further satisfy the demand from users from PV kind of exploration or PVP kind of confrontation. And the other front that we're exploring is we're going to explore the prioritized ecosystem. Some of the SOC players, they have demands to, for example, open their private servers. So that's a different kind of gameplay experience. And we're going to explore how to satisfy this kind of demand.
Speaker Change: In the future, we're going to further satisfy the gamers T mountain from two angles. One is we're going to add new game place new scripted based game plays.
Speaker Change: That can further satisfy the demand from users.
Speaker Change: From you know PV kind of exploration or Pvp kind of competition.
Speaker Change: The other found that we're exploring is oh, we're going to explore the prioritized our.
Speaker Change: Some of the Oh, absolutely players they have few months to for example opened their private service.
Speaker Change: So that's a different kind of gameplay experience and we're going to explore how does satisfy at this kind of females.
Speaker: Thank you.
Speaker Change: Sure.
Yang Liu: Your next question comes from Yang Liu with Morgan Stanley, please go ahead. Thank you for the extra opportunity to ask a question. I would like to ask more about FragPunk, a game that is very popular on the international market. The popularity of FragPunk has declined rapidly since its launch. What can the company do to help FragPunk to play better in the competition of foreign FPS games?
Speaker Change: Your next question comes from Yang Li with Morgan Stanley. Please go ahead.
Speaker Change: Oh gosh yeah.
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Yang Liu: Let me do the translation. The popularity of FragPunk has declined rapidly since its launch. What can the company do to help FragPunk to play better in the competition of foreign FPS games? Thank you.
Speaker Change: Kind of thoughts after the launch stage Oh, what does that do to help the <unk> to differentiate the bedroom in the overseas I S. T. S game competition. Thank you.
Speaker: I'd like to answer this question. The R&D team of Jialong Shi is a brand new team. We are quite satisfied with them so far.
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Speaker Change: Thank you gentlemen.
Speaker: In my opinion, its foundation is very good as a design system. The system supports the production of new models quickly.
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Speaker: to consolidate core players and seek greater potential! Thank you for your question. FragPong was actually made by a new team. From a new team perspective, we're satisfied with the performance so far. The first, the game actually has a solid foundation. It's innovative because the mechanism allows for rapid updates and iterations regarding gameplay modes. We have been telling the team that it's important that we keep engaged in this market and keep refreshing and seeking for opportunities for gameplay expansion. We're committed to supporting this product in the long run to support the long-term operations. To achieve this, we encourage the team to make sure that we have a very solid, stable team and give the team more room and more time to keep growing.
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Speaker Change: We have been cutting the team that you know it's important that we keep engaging in this market and a key.
Speaker Change: Keep refreshing is seeking for opportunities for gameplay expenses.
Speaker Change: We're committed to supporting this product in the long run.
Speaker Change: To support the long term operations to achieve this we encourage the team that you know cars.
Speaker Change: Because.
Speaker Change: To make sure that we have a.
Speaker Change: Very solid stable team and.
Speaker Change: Keep the chin more room and more time to.
Speaker Change: Kipp role.
Speaker: From the market operation perspective, we'll continue to invest into the overseas market, maintaining visibility through all sorts of vehicles, like including tournaments, including collaboration with influencers and other IP crossovers. This will maintain our loyal player base while we're seeking for breakthrough opportunities.
Speaker Change: From the market accretion perspective will continue to be masking, some oversea market maintaining visibility.
Speaker Change: Through all sorts of vehicles.
Speaker Change: Vehicles, like including 12 months, including our cooperation with Influencers and other IP crossovers.
Speaker Change: This will maintain our loyal player base, while we are seeking for a breakthrough opportunities. Thank you.
Speaker: Thank you.
Thomas Chong: The next question comes from Thomas Chong with Jeffreys. Please go ahead.
Speaker Change: The next question comes from Thomas Chong with Jefferies. Please go ahead.
Thomas Chong: Good evening, this is Wang Lichang, accepting my question. My question is about the distribution of resources in the domestic and overseas markets in the next few years. Thanks management for taking my question. My question is about resource allocation. Can management comment about the allocation of resources in domestic... Thank you. I believe that NetEase has enough resources to pay attention to domestic and foreign markets at the same time. After 25 years of development, our company has prepared a lot of tools and talents. Of course, we will also have some shortcomings, such as how to understand the needs of overseas users, etc.
Thomas Chong: This is.
Speaker Change: Steven.
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Speaker Change: Management Baltic in my question.
Speaker Change: These patients can management comment about the allocation of resources in domestic.
Speaker Change: Please proceed.
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Speaker: But from an executive level, we have no problem at all.
Speaker Change: That's all just communist along wellness at lunchtime it wouldn't either.
Speaker: Thank you. From NetEase's perspective, we believe we do have sufficient resources to do both domestic and overseas markets at the same time. From the 20 years' history we have been doing this business, we have accumulated a lot of tools, toolchains, and talents. Of course, we have shortcomings as well, for example, like how to understand the demands from overseas gamers. On that part, we will keep improving, but from a resource allocation perspective and execution perspective, we do have sufficient resources. resources to do both markets. Thank you.
Speaker Change: Yeah from that is the perspective, we believe we do have sufficient resources.
Speaker Change:
Speaker Change: To do both domestic and overseas market at the same time.
Speaker Change: From the 20 year history, we have been doing this business, we have accumulated a lot of tools to train and talents of course, there are we have shortcoming as well for example.
Speaker Change: Like how to understand the P mountains from oversea gamers.
Speaker Change: All of that part of will.
Speaker Change: Keep improving but from resource allocation perspective, and execution perspective, we do have sufficient.
Speaker Change: Right.
Speaker Change: This also has to do both market.
Speaker Change: Thank you.
Siu-King Chang: The next question comes from Siu-King Chang with CICC International Corporation. Please go ahead. Thank you, Guan Yucheng, for giving me the opportunity to ask questions.
Sticking Chang: The next question comes from sticking Chang, what's the ICC International Corporation. Please go ahead.
Brian: Thank you Brian.
Siu-King Chang: Congratulations on the performance of this quarterly document. I have two questions.
Speaker Change: Two quick glossy chassis doing Jim.
Speaker Change: <unk> be some elements, we dial concentrating fob with attendees.
Siu-King Chang: The first one is about the new products. We noticed that the recent products of the company are doing well. What are the standards for the new products of the company? What indicators will be mainly considered? And what is the situation of the new products this year? How should we look at the pipeline for the next one to two years?
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Siu-King Chang: And the second question is that I want to follow up on e-sports.
Speaker Change: Yeah.
Speaker Change: Lindsey.
Siu-King Chang: Congratulations to the fifth person of the company and Yongjie Wujian for entering the presidential election for the first time in 2026. Then I would like to ask Guan Yucheng if we will take this opportunity to develop an international e-sports operation. What is the future strategy of e-sports in the field of e-sports? Thank you. Thanks, Manifand, for taking my questions. And congratulations on the third quarter.
Speaker Change: Yeah, I mean, I don't yet know.
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Speaker Change: But I think you know going forward like in Jimmy Choo, Jimmy This is Jim.
Speaker Change: Hi, Thanks for taking my questions and congratulations on a solid quarter.
Siu-King Chang: I have two questions. My first one is about your new titles. We have noticed that several new titles achieved great performance. Which key evaluation metrics are prioritized during the product ideation and approval phases in the company? And how shall we expect the pipeline in one to two years?
Speaker Change: Two questions My first of all our alteon <unk> titles.
Speaker Change: <unk> got several new titles.
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Speaker Change: Which key valuation metrics.
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Speaker Change: How shall we expect the pipeline he wanted to yes.
Speaker: My second question is a follow-up one on e-sports. Congratulations on i25 and Naraka being selected for the 2026 Asia Games for the first time. May I ask whether management plans to take this opportunity to develop international e-sports operations? And what's the company's long-term strategy for the e-sports games? Thank you. Yes, NetEase makes games. We are a... 接近25年经验的公司 In the past 25 years, we have gained a lot of experience. and very good tools. Our team loves games very much.
Speaker Change: Second question a follow up 1000.
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Speaker: 也有同样在未来立下的时候 I also have the same goal in the future 我们欢迎对各种游戏有想法的人才加入我们的团队 We welcome talents with different ideas for games to join our team 所以我们立一个新的项目 So our new project is to consider 首先考虑的是人本身他是不是乐爱游戏 whether people themselves love games 他是不是乐爱自己的生活 whether they love their family life As long as it meets these requirements, we will actively evaluate and think about this product. 所以在未来我们会 So in the future we will Thank you for inviting us to join the team. Of course, we also have a certain review mechanism. I think you don't have to worry about the pipeline of products in the next two to three years.
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Speaker: We still have a lot of excellent projects lined up. Thank you. Thank you for your question. I will answer the first question first. Over the past 25 years, we have accumulated a lot of experience, tools, and talents. And our talents, our teams, they're really passionate about gaming. And when we start a new project, we welcome all sorts of talents with creative thinking about game ideas. When we consider a new product case, actually the first attribute we consider is whether or not the core team members, they're passionate about gaming, or they're passionate about the specific game project they're proposing, including how to execute them out over the years.
Speaker Change: Oh, well you showed that Sean.
Speaker Change: Yes, yes, yes.
Speaker Change: Yes, so thank you for questions.
Speaker Change: First question first.
Speaker Change: Over the past 25 years, we have accumulated a lot of experience.
Speaker Change: Tools and <unk>.
Speaker Change: Talent and our talent our teams that are really passionate about gaming and talk about when we talk to new project.
Speaker Change: We welcome all sorts of talents with thinking creative thinking about about game ideas.
Speaker Change: Well, we consider a new product case, but actually the first attribute a week, we consider is whether or not the core team members their passion about the passion about gaming are they pushing about the specific game project, they are proposing and and.
Speaker Change: And including how to execute them out over years.
Speaker: And if they satisfy all this threshold, we'll actively evaluate and think about this product. Of course, we do have an internal evaluation. system. And in the future, actually, we'll open this platform to more, you know, game lovers outside, talent outside, if they want to join us, if they have creative ideas, you know, we welcome them. Specifically about the pipeline in the next couple of years, you know, rest assured, you know, don't need to worry. We have other, you know, very good product that, you know, hasn't been announced yet. Thank you.
Speaker Change: If they satisfy.
Speaker Change: This.
Speaker Change: Thresholds will actively evaluate and think about this product of course, we do have a.
Speaker Change: Internal evaluation.
Speaker Change: Sure.
Speaker Change: The system.
Speaker Change: In the future actually will open this trough for them.
Speaker Change: Two more you know game lovers all site.
Speaker Change: Oh, sorry, if they want to join us if they have a creative ideas you know.
Speaker Change: We welcome them.
Speaker Change: Specifically about the pipeline in the next couple of years.
Speaker Change: Rest assured you know.
Speaker Change: I'll need to worry we have other very good product that our pipeline has not been announced yet thank you.
Speaker: William, the second question is about the Asian Games and eSports. We value e-sports very much, so this time we have two games that have been selected for the Asian Games. I believe the first reason is that the quality of our team's products is very good. Second, we have a wide public base. Third, we hope that NetEase's self-development team 近期的游戏,能够不只是... 陆维亚人会的比赛项目也能未来进入 奥运会的 电竞奥运会的 We have the largest e-sports venue in Hangzhou, China, and we have been organizing e-sports competitions for a long time. At the same time, we also have our own e-sports venue in Shanghai, which is also the largest in Shanghai.
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Speaker: is also the first, so NetEase will be in the field of e-sports for a long time to update, thank you. Yeah, so thank you for your question and interest about our product in the Asian Games. For a long period of time, we have been actually paying a lot of attention to esports. And this time, two of our products have been selected. That's a testimony of, you know, not only the quality of the game, but also the gamer base of the games. And we hope, you know, our self-developed game non-stop at being part of Asian Games.
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Speaker Change: Yes, Sir Thank you for your for your question on non interest about our product.
Speaker Change: Literally in the Asian games.
Speaker Change: Before long Showtime, we have been actually are paying a lot of attention to sports and at this time to offer a product and selective that's a testimony of you know not only the quality of the game, but also the the Gamer base all the games and Ah.
Speaker Change: We hope you know ourself your golf game.
Speaker Change: Non stop at being part of patient care, we hope them to be included in the higher level on an esports Olympic games.
Speaker: We hope them to be included in higher level esports Olympic Games. Talking about esports operation, in Hankou, we have, you know, the largest esports stadium. And we continuously run esports tournaments here. And we also, in Shanghai, we have our own private esports stadium. The Biggest, and we have continuous esports operations based there as well. In the long run, we're going to, in the long term, continue to invest into esports operations. Thank you.
Speaker Change: Talking about esports operation.
Speaker Change: Hunter, we have you know.
Speaker Change: The largest E sports stadium.
Speaker Change: We continue as a run esports tournaments here and we're also you saw how we have our own private E Sports Stadium.
Speaker Change: Went up.
Speaker Change: The biggest and we have a continuous esports operation based there as well.
Speaker Change: In the long run we're going to in the long term continues to invest into esports operations. Thank you and.
Operator: And operator, for the sake of time, we have time for one more question. Thank you.
Speaker Change: I'll put it out for the sake of time, we have time for one more question.
Speaker Change: Thank you. Your final question comes from Alicia Yap with Citigroup. Please go ahead.
Alicia Yap: Your final question comes from Alicia Yap with Citigroup. Please go ahead. Good evening. Thank you for accepting my question. My question is about AI. With the help of AI technology, will the gaming studio be able to launch content updates faster and shorten the development cycle of new content? As the role of AI in development and distribution is increasingly important, will this change NetEase's plans for new versions, new files, and new strategies? I will translate for myself. Thanks, management, for taking my question. With the help of AI, it seems like the game studios are able to produce content updates very quickly and then also shorten the overall development time for the expansion pack.
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Speaker Change: Thanks management for taking my questions I'll leave to help us. It seems like the same studios are able to produce a content update I'll tell you quickly and then also shorten the overall development time, Florida expansion pack without a buck and change how <unk> plans to.
Alicia Yap: Will that affect and change how NetEase plans to expansion pack release timing and also the game promotion targeting as AI increasingly taking a more important part of the game development and game publishing? Thank you.
Speaker Change: Past exploration release timing and also the game promotion targeting.
Speaker Change: S. AI are increasingly taking a more important part of the game development. Thank you publish thank you.
Speaker: In fact, in the development and user experience of game content of A.I., NetEase has fully applied these latest technologies. We have been constantly investing in A.I. since five years ago. And these results are generally applied to the fun of game development and game content itself.
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Speaker: 我覺得這不是一家公司的 I don't think this is a company's The whole industry should be very active in adopting AI technology. It's just that each company has a different application in terms of depth and breadth. I would like to emphasize once again that AI is not only important for games, but also for other businesses. Thank you.
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Speaker: Thank you for your question. We actually have been using AI in our game development and gamers' experience for a long time, at least five years, in the past five years, so we never stopped investing into technologies, including AI technologies. And a lot of this result actually has been deployed in our game development and content production. For AI in general, we believe it's not specifically attached to specific one company, it should be a whole industry kind of thing. In the whole industry, everyone will be actively adopting AI technology. Every company with their different context, maybe the breadth or the deepness, how they apply AI technology might be different.
Speaker Change: Thank you for your question.
Speaker Change: We actually have been.
Speaker Change: Using AI in Oregon development and.
Speaker Change: Gamers experience for.
Speaker Change: For a long time at least five years you name the past five years. So we never stopped investing so technologies, including AD technologies and a lot of this result actually has been deployed.
Speaker Change: Deployed in all advocated in our game development and cotton.
Speaker Change: For production.
Speaker Change: Yes in general we believe it's not you know specific attach to specific one companies it should be a whole co industry kind of pain in the whole industry everyone.
Speaker Change: Or what will be actively adopting air technology.
Speaker Change: Every company.
Speaker Change: Was there a different contracts, maybe the past where the deepness, how the appetite how they apply after my might be.
Speaker: I want to emphasize again, actually, AI is critically important, not only to the game industry, but to many other businesses as well. It's been a critically important thing. Thank you.
Speaker Change: It might be different.
Speaker Change: That's again actually yes critically important not only to.
Speaker Change: Two game industry and other business as well as being critically important thing. Thank you.
Speaker Change: Okay.
Speaker: And that concludes the question and answer session.
Helen: And that concludes the question and answer session I would like to turn the conference back over to Helen <unk> for any additional or closing comments.
Helen Wu: I would like to turn the conference back over to Helen Wu for any additional or closing comments. Thank you once again for joining us today. If you have any further questions... Please feel free to contact us directly. Have a nice day.
Speaker Change: Thank you once again for joining us today, if you have any further questions. Please feel free to contact us directly have a nice day goodbye.
Goodbye.
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