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On the morning of November 15, Beijing time, Sina Technologies News reported that Netease (Nasdaq: NTES) today released an unaudited financial report for the third quarter ending September 30, 2018. The report showed that Netease's net income in the third quarter was 16.655 billion yuan (about 2.454 billion US dollars), an increase of 35.1% compared with the same period last year. The net profit of easy shareholders is RMB 1 billion 600 million yuan (US $232 million 400 thousand), down 37% compared with the same period last year. The net profit attributable to Netease shareholders in the third quarter was 2.259 billion yuan ($329 million), excluding the US General Accounting Standards (non-GAAP).
After the announcement of the financial report, senior executives of Netease CEO Ding Lei and CFO Yang Zhaotao attended the subsequent financial report teleconference, interpreted the main points of the financial report and answered the analyst's questions.
The following is the main content of this conference call Q & a session.
Thomas Chong, Credit Suisse analyst: I have two questions about the game business. The first one is about Netease's cooperation with Blizzard. Can management share more time about the release of Diablo Tour in proportion to Blizzard's share? Besides Diablo, whether Netease and Blizzard have other games? Play cooperation? The second question is how the management views the game regulatory environment in 2018 and the regulatory environment in 2019.
Ding Lei: Netease and Blizzard cooperated very happily. From 2009 to 2018, the two companies integrated for nine years, bringing Chinese consumers a very good experience of Blizzard game operation. So, in early November, Netease announced that it would cooperate with Blizzard to develop a hand-tour with Dark IP, which was also a common experience of both sides long ago. A cooperation reached. Without accident, we hope that the game will be launched next year and released worldwide. As for the game business division, this is a business secret, and it is difficult to disclose it to the outside world.
In addition, as game practitioners, we fully understand and support the regulation of the game industry by government departments. China's games have developed rapidly in the world, and some problems have arisen. The first is the impact on minors. The second is some games with vulgar content, such as gambling and pornography. After a period of cleaning up, I hope that the game itself will return to the field of entertainment, education and cultural creativity and be able to give. More consumers and players bring better gaming experience. I believe that, in the long run, the government supports and affirms the development of creative industry of game culture.
Eddie Leung, Bank of America Merrill Lynch analyst: Netease mentions that more and more users are on its own platform, and more and more content innovations are being made. My question is whether the management team has seen a situation where the proportion of overlapping users using Netease's multiple services is rising and what will happen in the future. A trend? In addition, how will the company encourage different internal teams, such as music teams and game teams, to better mix users of different applications of Netease? Can the management talk about how you did it? The second question is about the game version number. In the games that Netease has not yet launched, how many games have got the game version number?
Yang Zhaoxuan: let me answer the first question first. First, the company does not disclose user data of different business lines. But as we said before, Netease is developing and launching increasingly diversified products, not just a game company. Therefore, users of Netease products and services are definitely enjoying more and more high-quality content, while the use of Netease brand experience is constantly improving.
The company does not have specific data to assess user overlap, but we believe that user overlap should not be too large. After all, users in different vertical industries want to use the best products and services they can find in the market. Some people may have heard that earlier this week, we started testing the VIP membership program. Once users buy this service, they will get a lot of membership privileges from different product lines of Netease, such as games, music and business services. This is also a cross-promotion of different products and services to Netease users. Experience means.
Executives: The company will launch new game products in the next quarter and next year at the same speed as this year, so the specific product launch plan, but also please pay more attention to some product launches.
Ding Lei: I think we should pay more attention to the quality of products, not the quantity of products. Netease hopes that every product it launches will be of high quality, innovative and bring unique experience to Chinese users. NetEase is not a company that wins by numbers.
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