Netease Q4 revenue was 26.7 billion yuan, and potential new products such as “Sixteen Voices of Yan Yun” and “Marvel Competition” won high reputation

On February 20, Netease released its fourth quarter and full-year financial results for 2024. The financial report shows that Netease’s performance in 2024 is stable, with total revenue of 105.3 billion yuan and Q4 revenue of 26.7 billion yuan. In 2024, the R & D investment will be 17.5 billion yuan, and the R & D investment intensity will reach 16.6%. This also marks the fifth consecutive year that Netease has invested more than 10 billion yuan in R & D.

In the past year, Netease has focused on its main business lines and made breakthrough progress in its high-quality strategy.

Netease Games continues to innovate its diversified product matrix, constantly updating and iterating in design, narrative and immersive content. A number of long-term high-quality products have reached new highs, with annual revenue of 83.6 billion yuan and Q4 revenue of 21.2 billion yuan.

Netease Cloud Music further enriches high-quality music content, optimizes user experience, and expands subscription membership. Annual revenue is 8 billion yuan, and Q4 revenue is 1.9 billion yuan. Recently, Netease Cloud Music and Ctrip launched the Ruge Journey Original Music Collection Competition, setting up a prize of 6 million yuan to collect city-themed music from musicians around the world.

Netease has a way to focus on driving innovation through technology applications and improving profitability. Youdao Q4 ‘s operating profit increased by 10.3% year-on-year, and it achieved full-year profit for the first time. For the whole year of 2024, Youdao’s revenue reached 5.6 billion yuan, of which Q4 revenue was 1.3 billion yuan.

Netease’s innovation and other business segment will have revenue of 8.1 billion yuan in 2024, of which Q4 revenue will be 2.3 billion yuan. In 2024, Netease’s strict selection Pro membership will increase by 35.5% year-on-year. Sales of core categories such as pets and home qing will hold double-digit growth year-on-year, firmly leading the way. The annual sales of China’s big goose down jackets will exceed double-digit growth year-on-year; Netease Media uses AI to improve quality and efficiency and launch new content consumption business. The number of new creators on Netease News Client Q4 increased by 27% year-on-year; In November last year, the large-scale structured data intelligent computing platform and industrialization project jointly developed by Netease Digital Intelligence and Zhejiang University won the first prize in the Zhejiang Province Science and Technology Progress Award.

It is worth noting that recently Netease Youdao, Netease Cloud Music, Netease Digital Intelligence and other multiple businesses and the “Cold Against the Water” mobile game announced that they will be connected to DeepSeek. By integrating DeepSeek and self-developed AI technology, they will be quickly applied to education, music, and corporate services. Among many products in the fields of games.

Consolidating the diversified product matrix: Long-term IP breaks records again, and new products are applauded

Over the past year, relying on long-term operating capabilities, Netease Games has reached new highs in a variety of premium IPs, and end-game growth has been significant. Among them, the annual revenue of the “Fantasy Westward Journey” mobile game that has been in operation for nearly 10 years, the “Westward Journey 2” that has been in operation for more than 20 years, and the “Fifth Personality” that has been in operation for more than 6 years have all hit new highs. The annual revenue of the “Eternal Escape” end-game also set a new record. At the same time, thanks to the outstanding performance of “Eternal Tribulation” end-game and agent games such as “World of Warcraft” and “Hearthstone”, end-game revenue in the fourth quarter increased by 57% year-on-year. The return of “Overwatch Pioneer” on February 19 will further boost players ‘enthusiasm.

While long-term IP broke records again, many new products also received both good and popular user feedback after they were launched. In the fourth quarter,”Sixteen Voices of Yan Yun” relied on its narrative content, open world gameplay, and immersive experience. The number of end-game downloads exceeded 3 million times within four days of its launch. After mobile games were launched, it ranked first in the iOS download list. About two weeks. At present, the total number of dual-end players has exceeded 15 million in two weeks, and the host and sailing have entered the preparatory stage.

“Marvel Competition” unlocks a new gameplay that integrates culture. With scene destruction, iconic hero connection skills and deep extension of the Marvel Universe,”Marvel Competition” quickly topped the Steam global bestseller list after being launched. Currently, registered users have exceeded 40 million, ranking first in the number of players in the Discord community. IGN and many other well-known foreign game media also scored high scores. Consulting firm Naavik stated in its latest report that the success of “Marvel Competition” marks that China manufacturers have further broken through barriers in the Western game market and demonstrated a new paradigm of Sino-US cooperation +IP empowerment.

The financial report shows that Netease will launch more global and diversified new products to further enrich the product matrix. The multiplayer tactical shooter end-game “FragPunk”, which will be launched globally on March 7, uses card strategies to reconstruct shooting rules and is expected to become a new force in the field of e-sports;”Destiny: Rising”, which was rated as the most anticipated game of the year, completed its first round of testing, and its first test quality was recognized by core players; Marvel IP’s new book “Marvel Mystic Mayhem” ended multi-country testing, and the RPG experience of Strange Dreams received positive feedback from testers. In addition, the mobile version of “Seven Days World” will also start global public beta in April. As of December 2024, the global mobile version of the reservation volume will exceed 20 million.

Recently, many brokerage institutions such as Goldman Sachs, China International Capital Corporation, and Xiaomi Morgan Stanley are optimistic about Netease’s performance to increase their holdings or increase their target prices. They believe that Netease’s product line will be strengthened in 2025, with abundant game reserves, and will have breakthrough potential in sub-tracks.

Annual R & D investment intensity reaches 16.6%: AI innovates the industrial ecosystem and multiple services are fully connected to DeepSeek

Netease is committed to continuous investment in content creation and product research and development. In 2024, the R & D investment will be 17.5 billion yuan, and the R & D investment intensity will reach 16.6%. Recently, Netease’s multiple businesses quickly responded to the DeepSeek wave and connected DeepSeek among many products.

Netease Youdao used DeepSeek-R1 ‘s in-depth reasoning capabilities to upgrade and optimize many products such as Youdao Small P, Youdao Dictionary, and Youdao Smart Cloud, and innovatively launched a new category of AI answering pen SpaceOne. As the first AI native learning hardware in China, SpaceOne deeply integrates the capabilities of DeepSeek-R1 inference model, combines AI capabilities with the advantages of educational scenarios and knowledge bases, and unlocks new ways to explain subject problems in depth.

Netease Cloud Music announced that its podcast generation tool developed for creators has completed full-capacity access to DeepSeek-R1, and the quality of creation has been further improved after access. In addition, Netease Cloud Music will also be based on the DeepSeek-R1 model, integrate its own AI technology capabilities, and actively explore in many fields such as intelligent song recommendation, music information search, and musician creation assistance.

Recently, Netease Fuxi Youling Yisheng Zhuxiang platform launched a full-blooded version of DeepSeek, which has access to NetEase Digital’s integrated communications, service marketing, digital content risk control, intelligent data analysis, intelligent development and other businesses. At the same time, Shen Qiusuo, an intelligent NPC driven by DeepSeek, was the first large-scale intelligent life body with a virtual image, and officially entered the “Reverse Water Cold” mobile game, allowing for in-depth emotional communication with players. In addition to DeepSeek, the game has teamed up with Netease Fuxi to launch the first in-game AI model arena. The first phase has brought together large models from five well-known domestic AI manufacturers to participate.

While following the wave of AI and continuously upgrading applications, Netease AI is also accelerating its integration with the real industry. In November, Netease robot brand Netease Smart signed a strategic cooperation agreement with Xugong to release the black-light construction site and one-person multi-machine shepherd product models. It is understood that Netease’s smart loading robot can operate automatically in an unmanned and all-black environment to achieve 24-hour uninterrupted production. It has implemented projects such as the 104 National Highway Mixing Station and Gansu Road and Bridge Group.

Actively fulfill social responsibilities: AI+ minor protection upgrades another 8 million yuan in supplies to aid Xizang

In 2024, while achieving business breakthroughs, Netease will also continue to fulfill its corporate social responsibilities and promote the deep integration of digital technology innovation and social values.  

In the field of minor protection, Netease Games further upgrades the minor escort platform, optimizes the function of parents to bind game accounts, improves operating convenience, and helps parents efficiently manage their children’s game duration and consumption behavior. According to statistics, the platform helped parents complete a total of 560,000 related operations during the winter vacation. In addition, after the first launch of the AI Patrolman Minor Protection System, Netease Games continued to upgrade the system. Through leading AI real-name authentication technology, combined with real-time inspections based on user behavior characteristics, it more accurately identifies fraudulent adult accounts. Underage users protect the healthy growth of minors.

In terms of public welfare undertakings, Netease demonstrated corporate social responsibility in a number of actions in the fourth quarter. After the 6.8-magnitude earthquake in Dingri County, Xizang, Netease urgently donated 8 million yuan worth of cold prevention and daily necessities to support rescue and resettlement work. Its game “The Fifth Personality” donated 8.33 million yuan to the China Welfare Foundation for Disabled Persons through the girl who lit up the stars through public welfare props;”Cold Against the Water” linked up with the Academician Yuan Longping Rice Expert Workstation of Xing ‘an League to donate Yuan Zhimeng rice worth 1 million yuan in the name of players, allowing more than 10,000 children in 91 schools to have free lunches.