Chinese game development company and mobile application developer NetDragon has released their 2022 full-year financial results, with reported revenue of 7.9bn Yuan ($1.14bn).
Revenue for NetDragon increased by 11.8% year-on-year while gross-profit was down slightly by 4.6%, to 4.3bn Yuan ($624.7m). Their gaming division saw a 14.1% decrease in profit while their loss from their education division was down 27.4%. In particular, NetDragon drew attention to the strong performance of their Eudemons franchise, including mobile game Eudemons Pocket Version. Their increase of their R&D headcount by 300 is indicated to go primarily towards increasing their pipeline of new games in 2023.
Dr. Dejian Liu, Chairman of NetDragon, commented: “In 2022, we delivered a resilient performance with 11.8% revenue growth in a year of both opportunities and challenges. Our education business achieved record-high revenue of RMB4.3 billion with 34.2% YoY growth, as we continued to build on our global market leadership position with our commitment to providing educators the ability to transform learning and collaboration.
China’s storm
The gaming market in China has faced a fairly rough 2022, with the freezing of game licences and pandemic restrictions proving to be major obstacles to continued growth. On this subject Liu commented, “The gaming industry in China went through unprecedented challenges throughout 2022 as a result of a slowdown of the domestic economy due to the Covid-19 impact. However, a clearly defined go-to-market strategy and our unique gaming IP portfolio helped us to weather the storm.”
Notably, although NetDragon reported a loss in their domestic games division, their overseas games actually grew by around 6.5% in revenue. It may be that this sort of performance is what is informing the movements of other Chinese game companies like Tencent who are seeking to expand their games outside of China and to foreign markets. With the massive success of Tencent’s Honor of Kings in Brazil it may be that pushing games to foreign markets is not just something the gaming giant will consider, but smaller companies too.
