37 Interactive Entertainment Net Profit Doubled in 2016, Expecting RMB 430 Million in Q1 2017
37 Interactive Entertainment (002555.SZ) recently presented its 2016 annual financial report. The report shows that 37 Interactive Entertainment totaled revenue of RMB 5.248 billon, up 13%, among which the total net profit of shareholders was RMB 1.07 billion, up 111%. As anticipated in the report, the company has a total net profit of up to RMB 430 million (including RMB 80 million investment revenue) in Q1 2017.
The report also shows the two main factors in the net profit growth. Firstly, in December 2015, 37 Interactive Entertainment purchased the remaining 40% stock of its subsidiary Shanghai 37 Interactive Entertainment, whose net profit in the reporting period all belonged to 37 Interactive Entertainment. Secondly, the company continued to improve significantly in developing and publishing mobile games, with Yonghengjiyuan as one of the most outstanding examples.
2016 was the year that 37 Interactive Entertainment made a breakthrough into the mobile games business. The total revenue of its mobile games reached RMB 1.639 billion in 2016, up 219% compared to 2015; the net profit RMB 1.014 million, up 978%. It’s worth pointing out that Yonghengjiyuan, developed by 37 Interactive Entertainment, was released in China and several key overseas regions, generating global revenues of up to RMB 315 million in one month.
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Domestic Mobile Games Business Strengthened
Ever since the company was founded in 2011, 37 Interactive Entertainment has developed a profound understanding of products and the user community, and has built up abundant user-acquisition resources in its development and operations of an integrated browser games business. In 2016, these advantages were successfully inherited by the company’s mobile games business. Up till the report released, the “browser to mobile” Yonghengjiyuan had generated revenues of up to RMB 280 million in one month and revenues of up to RMB 55 million in one day in Mainland China, setting a new standard for such products.
The outstanding performance of Yonghengjiyuan has indicated that there is still a great potential to tap in China’s rapidly growing mobile games market. Additionally, the feasibility of the company’s “pc to mobile” strategy and its publishing competence to achieve user acquisition and conversion has been successfully proven. Up till the report released, the overall mobile games publishing business of 37 Interactive Entertainment generated revenues of more than RMB 410 million in one month in China, with a trend of consistent growth.
Overseas Mobile Games Business Extend
37 Interactive Entertainment has been devoted to globalizing its products to the international market since 2012. The company has established a profound understanding of key overseas markets and has piled up advantages in localized publishing and operations.
In 2016, 37 Interactive Entertainment focused further in game localization and consecutively released a number of successful mobile games, such as Chuangshipoxiao (traditional Chinese version of Yonghengjiyuan), Blades & Rings (English version of Yonghengjiyuan), Loong Craft, Clash of Dawn, Chinese Paladin and The King of Fighters ’97. These titles were released in key regions including, but not limited to, Hong Kong, Taiwan, Southeast Asia, and North America.
In Taiwan, Chuangshipoxiao took 1st place in both iOS and Google Play’s top grossing rank, and was named “Most Popular Game of the Year” in Google Play. Moreover, Loong Craft, which was released in Southern Asia, took 1st place in Malaysia’s iOS top grossing rank within the first 20 days after release and retained the title for more than 3 months. In April 2016, the title succeeded in taking 1st place in both iOS and Google Play’s top grossing ranks.
Localized strategies in marketing, publishing and operating gave a boost to the company’s overseas mobile games business in 2016, generating revenues of up to RMB 90 million in one month.