NetEase (NTES) Q2 FY25 earnings call: guidance and Q&A

Inquired about the monetization success of Where Winds Meet and the drivers behind Once Human's grossing rebound, including its evergreen potential and user/revenue split.

Management stated Where Winds Meet exceeded initial expectations with solid performance, attributing it to high-quality content and a cosmetic-only monetization strategy for sustainable success. For Once Human, the rebound was driven by the 2.0 update and RaidZone spin-off, with a 50-50 user split between China and international, but only 2-3% revenue from international.

“[Interpreted] Where Winds Meet has delivered a solid performance as we have explained and exceeded our initial expectation before launch in both in terms of active players and monetization. And more notably, the long term -- we believe the long-term performance has been quite stable, demonstrating the promising potential for the sustainable success.”

asked by Yang Liu · answered by William Ding

Asked for additional color on Blizzard games' sequential performance, whether they are targeting old and new gamers, and if future growth will be driven by content updates/promotions or new user growth.

Management confirmed that game metrics for Blizzard titles in China have surpassed pre-shutdown levels due to dedicated local operations. They believe there's significant potential to attract more new players and re-engage those who haven't returned by aligning with local tastes and habits.

“[Interpreted] As we continue to deepen our collaboration with Blizzard developing team, our mutual trust and the coordination is increasing. Looking to the future. As long as we implement more improvements that align with the local tastes and habits of local Chinese players. We believe there is a good opportunity that we can attract even more new players as well as engaging those who haven't returned yet.”

asked by Alicia Yap · answered by William Ding

Inquired about the effectiveness of Marvel Rivals Season 3 after its revenue ranking rebound and subsequent drop, and asked for feedback on Sea of Remnants' first testing and its monetization model/market.

Management noted an upward and stabilized trend in DAU and revenue for Marvel Rivals, indicating Season 3's effectiveness, with plans for more content. For Sea of Remnants, they expressed high confidence in its success and a 2026 launch, but deferred details on monetization and market until closer to release.

“[Interpreted] Marvel Rivals recently launched Season 3 and the Mid-Season Finals of Marvel Rivals IGNITE also concluded. We have observed upward and stabilized trend on both DAU and revenue, which make us believe that the new seasonal content update and strategy are effective.”

asked by Ritchie Sun · answered by William Ding

Asked for reasons behind the recovery of evergreen titles like Eggy Party and Fantasy Westward Journey Online, and the R&D status, launch expectations, and competitive landscape for ANANTA.

Management attributed Fantasy Westward Journey Online's recovery to continuous optimization and a new unlimited server, leading to a record 2.93 million peak concurrent users. Eggy Party's success is due to mastered UGC platform methodology and marketing. ANANTA is in mass production, with news expected around the Tokyo Game Show in late September, focusing on superior gaming quality to differentiate.

“[Interpreted] And we're super excited to announce that the number of peak and current users set a new record on early August at the 2.93 million PC number. And we have been running this game for so many years, and we are confident that with continuous innovation Fantasy Westward Journey PC will be continuing growing in the future.”

asked by Felix Liu · answered by William Ding

Inquired about the acceleration of AI empowerment, existing bottlenecks, plans for AI adoption in games, and the potential for truly AI-native games. Also asked about important directions and genres for future overseas expansion.

Management highlighted significant investment in AI for development, operations, and tool chains, anticipating AI to play a more important role and potentially design games in the future. For overseas expansion, they emphasized building global publishing capabilities across different geos, leveraging firsthand experience from titles like Marvel Rivals and Once Human, and expect continued growth fueled by new games.

“[Interpreted] We have been investing a lot of resources to embrace AI to leverage AI in our development, in our operations, how to embrace AI in our tool chain, everything. So looking to the future. AI is going to play a more and more important roles. And we are looking into the future that some there might be games designed by AI, could be fun game, that's the future we're looking forward to.”

asked by Lincoln Kong · answered by William Ding

Asked for an update on MARVEL Mystic Mayhem's overseas performance, expected launch time for the domestic version, and specific targets for the game.

Management stated MARVEL Mystic Mayhem launched successfully overseas on June 26, receiving multiple features and positive reception. However, they acknowledged facing long-term growth challenges for the game and are actively working on strategies to sustain its growth in the long run. No specific domestic launch update or targets were provided.

“[Interpreted] In the meantime, we do face some long-term growth challenges for the game, and we're in the process of figuring out how should we grow the game and keep your game in the long run.”

asked by Jialong Shi · answered by William Ding