2024/08/30 22:52
With a revenue of 2.22 billion, XinDong's first-half financial report is not only "turning losses into profits"
2024/08/30 22:52
Text/Qiuqiu
At last month's TapTap Developer Salon (TDW), Huang Yimeng said that XD experienced a trough last year, and its stock price even fell below the issue price.
Fortunately, after experiencing the pains of strategic transformation, cost reduction and efficiency increase, XD has cheered up this year, and the once positive trend has gradually become a performance that can be taken out:
According to the financial report, XD's revenue in the first half of 2024 was 2.22 billion yuan, a year-on-year increase of 26.7%, and the growth of both profit, profit attributable to the parent company and adjusted profit exceeded 100%, and the company as a whole achieved a turnaround.
At the same time, progress has also been made in reducing the cost and increasing the efficiency of cardiac.
The company's R&D expenditure decreased by 20.5% year-on-year, and the number of R&D personnel decreased by 146 year-on-year to 997; Marketing spend increased by 110.4% year-over-year.
It can be seen that when the new game needs to be promoted, XD quickly adjusted the cost structure, reduced unnecessary R&D expenses, and put more resources on the promotion and release of the new game and the iteration of TapTap with a higher rate of return.
The financial results also justify the above strategy:
In the first half of the year, the gross profit margin of XD's game business increased from 47.3% to 59.9% year-on-year. TapTap's monthly active data in the first half of the year returned to growth and hit a record high, while its revenue continued to maintain the growth trend of more than five years, reaching 734 million yuan.
Of course, compared with past results, I believe everyone is more concerned about what happens next? Will the road be smoother? Will it be possible to produce good results at the end of 2024 or beyond?
In this regard, Grape Jun wants to take advantage of the release of the heartfelt financial report to talk about his thoughts according to some of their recent developments.
01
Since the beginning of this year, there should be three new self-developed products worth paying attention to, namely "Sword of the Lily of the Valley: For This Peaceful World", "Let's Go Muffin" and "Heartbeat Town".
Let's talk about "Sword of the Lily of the Valley" last year, it landed in Hong Kong, Macao, Taiwan and mainland China, and achieved the first place in the best-selling list of iOS games in Hong Kong/Macau, China, the seventh best-selling list in Taiwan, China, and the 12th best-selling list in the domestic market.
In August this year, "Sword of the Lily of the Valley" was launched in many markets around the world, topping the free list of the United States and Japan markets at the highest, and rushing into the top 20 best-selling lists in Japan, Korea, Thailand, Singapore and other markets - DataEye estimates that the double-end income of "Sword of the Lily of the Valley" in 8 days of overseas launch is about 38.57 million yuan (excluding Hong Kong, Macao and Taiwan, China, which has been deducted from the share), which can be said to be one of the most eye-catching overseas products in recent times.
The data comes from the dotted data
If the results of "Sword of the Lily of the Valley" last year verified the project team's understanding of the chess category, game operation and payment model, then the explosion of the game overseas this year also shows XD's ability to publish globally - they can make it easier for overseas players to accept the experience of vertical themes and gameplay through earlier operation layout, catchy game highlights, and various promotion forms.
"The Sword of the Lily of the Valley" Japanese service publicity material,
Source: DataEye
Behind the success of "Let's Go Muffin" is the experience of R&D and distribution of advantageous categories accumulated by XD.
As we mentioned earlier, "Let's Go Muffin" partially confirms the transformation of XD's R&D strategy from casting a wide net to establishing advantageous categories. Game vertical screen + placement + social system, mature cultivation and paid design...... Basically, it comes from the accumulation of products such as "Endless Uralla" and "Playing Poli Every Day" in the past.
In addition, XD also made detailed operation and publicity plans before and after the launch of "Let's Go Muffin", such as how to refine the selling points of the game and how to determine the matching linkage brand...... Coupled with the confidence boost brought by Huang Xiwei's return, the game not only achieved outstanding results in the Hong Kong, Macao and Taiwan markets in China, but also entered the top 4 of the best-selling list after its subsequent launch in China, ranking in the top 20 of the best-selling list for a long time.
The linkage between the Taiwanese server of "Let's Go Muffin" and the Kabo cat and cat worm
As for "Heartbeat Town", I think its success lies in the fact that XD has experience in the operation of large DAU products, such as "Sausage Party"; On the other hand, it is the boost of TapTap: on TDW, Dai Yunjie once said that TapTap brought 10 million off-site downloads to the game in the first half of the year.
The current number of TapTap downloads of "Heartbeat Town".
It has exceeded 28 million
From the dynamics and strategies of the above three games, it can be seen that XD's self-developed new products do not seem to have copied the existing successes three times, but have achieved breakthroughs in project selection, TapTap, operation and distribution, overseas localization and other aspects.
It can be seen that after establishing advantageous categories, running through the process of game R&D to going overseas as soon as possible, and concentrating R&D/publishing resources by reducing costs and increasing efficiency, XD's various business capabilities have grown rapidly.
Moreover, these business capabilities may be more meaningful than new product achievements, such as improving the long-term strategy of games such as "Sausage Party" and "Torchlight: Infinite" in the past, and can also better ensure the future "Let's Go Muffin", "Heart Town" to go to sea, "Ise · · Restart Day.
As Huang Yimeng said at the financial report meeting in March this year, the growth and success of new products are inseparable from the experience and reflection in the research and operation of the company's many games.
02
When it comes to TapTap, you may feel a little sad that it has reached a bottleneck. Will the general trend of difficulty in obtaining volume affect it? Including on TDW, Dai Yunjie also said that the most concentrated question raised by developers is how much TapTap can get.
At that time, Dai Yunjie introduced some data and strategic directions of TapTap:
Only about 20% of the Home exposure resources come from advertisements, and the platform download data in 2024 is biased towards the waist and long tail, while ensuring the overall market data, the exposure of paid games has increased by 30%...... These data prove that TapTap maintains a relatively reasonable commercialization rate, and after the adjustment and optimization of the traffic structure, there is still a lot of incremental and revenue space within the platform - the success of "Heartbeat Town" is like this, and so is the increase in the exposure of paid games.
In addition, TapTap has also explored a traffic resource replacement service called REP.
Since the launch of this service, more than 3,000 vendors have settled in the service, with an average of nearly 1,000 monthly active vendors, and the value of resources provided per month has exceeded 1 billion...... These resources can be regarded as "squeezed" out by TapTap through sorting and redistribution, so the achievements of the REP business can also prove the potential of TapTap's acquisition volume.
The promotion results achieved by REP partners
In fact, it is not right to look at TapTap's traffic pool alone, because at present, TapTap has done a lot of distribution and promotion business on external advertising and social media platforms through REP, advertising, cooperation and other forms, and with the help of brands, subsidies, operation strategies, and bargaining power, TapTap can assist in the promotion of many products across the network.
For example, in addition to "Heartbeat Town", in the first half of the year, TapTap also brought 8 million, 8 million, and 5 million off-site downloads to "Phigros", "Happy Fishing Master" and "Dusty Forbidden Zone".
Huang Yimeng said that their previous developer service ambition was relatively large, hoping to do a lot of functions, but now they will return to the original point and strengthen the internal ecology.
Nowadays, TapTap solves the problem of "volume" that developers are most concerned about, and does a good job in basic service experience (such as the volume structure, rating, TDS, and mini games mentioned by Dai Yunjie), which may be what he calls the "back to the origin" strategy, and it is also a strategy to further reduce costs and increase efficiency, and concentrate resources to achieve breakthroughs.
03
Although the above mentioned a lot of dynamics and strategic layout, and also mentioned their relatively bright performance in the first half of the year, I believe that this is just the beginning of them, and in the future, whether it is self-research or TapTap business, it will continue to turn the trend of improvement into solid performance.
For example, the growth of XD game business revenue comes more from the Hong Kong, Macao and Taiwan markets of "Let's Go Muffen" in China, and the domestic and Hong Kong, Macao and Taiwan markets of "Sword of the Lily of the Valley", while the better-performing "Let's Go Muffin" national server, "Heartbeat Town" and "Sword of the Lily of the Valley" are basically not included in the performance of the first half of the year, so they may continue to explode in the second half of the year.
At the financial report meeting, XD also said that the national service of "Let's Go Muffin" alone had a turnover of nearly 200 million yuan in the first half of the year.
For example, TapTap's monthly active data in the first half of the year has rebounded, REP and other businesses are also gradually improving, and the download volume of "Heartbeat Town" may only show a part of TapTap's ability to acquire volume across the network.
04
Q: What about revenue deferrals for games like Let's Go Muffin?
CFO: "Let's Go Muffin" deferred nearly 200 million yuan in the first half of the year.
Q: What is the overseas distribution plan of "Let's Go Muffin"?
Huang Yimeng (Dash): It will be launched in Korea next month, followed by global markets such as Japan.
Q: Have there been any recent changes in the purchase volume of "Let's Go Muffin"? What's next?
Huang Yimeng (Dash): Its business model is relatively mature, so the buying rhythm will be adjusted according to the profit margin level of the product: the initial purchase cost is low, the profit margin is better, and the promotion will be more, and we will focus more on optimizing the game and extending the life cycle in the future.
Q: Has there been any change in the positioning and goals of "Heartbeat Town" after its launch compared with before the launch? How to better operate in the long term?
Huang Yimeng (Dash): "Heartbeat Town" was a surprise for the company, exceeding certain expectations. As a simulation category, it has a relatively high degree of innovation in gameplay, but the corresponding challenge is that the category lacks a very mature reference standard.
Therefore, we made a lot of long-term operation plans when the project was established, for example, we originally wanted to gradually attract players and improve the user experience after the game was launched; However, the popularity of "Heartbeat Town" has exceeded expectations, so the originally cautious R&D operation cycle needs to be accelerated, so that the company's current state can support higher R&D efficiency.
Q: What is the DAU expectation for "Heartbeat Town"?
Huang Yimeng (Dash): I think at least a few million to tens of millions of daily users can be called a big DAU, and there is no game in the simulation business category that can achieve this goal at the moment, and we will continue to work hard.
Q: When "Heartbeat Town" was launched, there was not much buying, what was the profit margin? What is the future marketing strategy?
Huang Yimeng (Dash): Because "Heartbeat Town" is not a traditional buying game, the profit margin at the project level is relatively high; However, the absolute value of game revenue is still in its infancy, and the focus is on how to change it to a long-term service game.
Dai Yunjie (Kros): "Heartbeat Town" actually has a certain amount of purchases, and the ROI remains at a good level.
Q: What is the future publicity plan of "Heartbeat Town"?
Huang Yimeng (Dash): The focus of "Heartbeat Town" is not on promotion and marketing, but on developing product features and meeting user expectations - when this step is completed, the new user addition and brand linkage will be a matter of course.
Q: Why does TapTap want to launch a PC store?
Huang Yimeng (Dash): The domestic PC market has been developing, for example, the recent "Black Myth: Wukong" has led to a wave of PC users, and now many mobile games have also launched multi-terminal versions. In the future, the boundaries between PC and mobile games will become more and more blurred, and we are also considering whether TapTap's services should cover this trend more comprehensively, but the product form has not yet been fully determined.
Q: What is the reason for the slight increase in channel expenses in the first half of the year? How do you view the trend of domestic Android channel distribution?
Huang Yimeng (Dash): All of XD's games are not available on channels, except for iOS. Therefore, the proportion of our game channels is nothing more than Android and iOS.
As for the trend of channel changes, I think it will be more and more difficult to maintain the traditional channel tax collection model, bag washing and other interception behaviors. Including Apple in Europe, the United States and Japan and other markets, also facing antitrust measures. In short, the game between developers, channels, and legislative supervision is a long-term dynamic process, but the overall trend is favorable to TapTap.
Q: Does the company have any plans for issuing agency business in the future?
Huang Yimeng (Dash): The agency business depends on the quality of the product, and we will continue to promote it with an open mind, but we do not make any guarantees.
Q: Is this year a better year since XD went public?
Huang Yimeng (Dash): Through a series of adjustments last year, XD is indeed in a better state to meet the challenges of the future this year.
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