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Video game developer NetEase exceeded expectations in the company’s second-quarter earnings report.
The China-based tech giant reported $3.5 billion in revenue in Q2 2022 — a 12.8% increase year-over-year — surpassing Wall Street estimates of $3.4 billion for the quarter.
The better-than-expected results were driven by NetEase’s games and related value-added services segment, which generated $2.7 billion in revenue in Q2, up 15% compared to Q2 2021.
- Online game revenue made up 92.8% of NetEase’s games and related value-added services.
- NetEase reported $1.9 billion of gross profit in Q2 2022, a 15.7% increase year-over-year.
- Operating expenses reached $1.2 billion during the quarter, up 7.6% compared to Q1 2021.
- As of June 30, NetEase has $13.1 billion in total cash, restricted cash, and cash equivalents.
NetEase benefited from the debut of its mobile version of “Diablo Immortal” in China — the world’s largest gaming market — in Q2 2022.
In July, the title — co-developed with Activision Blizzard — surpassed $100 million in global player spending across Google Play and the App Store following its June 1, 2022, release.
Declining Rival
Tencent — a NetEase rival — took a step back in its second quarter. The Chinese tech conglomerate generated $19.77 billion in revenue in Q2 2022, a 3% decrease compared to the same period last year. The quarter marked Tencent’s first-ever year-over-year revenue decline.
Tencent’s gaming division saw revenue for domestic and international games fall 1% year-over-year during the quarter to $4.7 billion and $1.6 billion, respectively.
