On May 16, 2023, Huya Inc., a leading game live streaming platform in China, announced its 2023 Q1 financial results, with its total net revenues for the first quarter standing at 1.95 billion yuan ($283.8 million), and non-GAAP net income at 85.5 million yuan, both exceeding market consensus estimates.
Huya Live’s mobile MAU for Q1 2023 has slightly increased year-on-year to 82.1 million at a healthy and stable level, which is quite encouraging as each year’s first quarter is usually a low season for live streaming activities, and starting 2023, users are devoting more time to offline entertainment activities given China’s re-opening early this year.
Huya CEO Dong Rongjie commented at the earnings conference call that “our appealing e-sports and entertainment program offerings along with our continued efforts to enhance our products with interactive features helped us sustain user engagement. We have been closely monitoring changes in the dynamic market environment and striving to quickly and flexibly refine our content and operational strategies to better meet users’ needs.”
Following more game titles approved in China in the past months, Huya is making plans to diversify its operational activities and deepen cooperation with game companies, to seize the opportunities brought by new game launches. For instance, through Huya platform’s “gift drop” features, both steamers and viewers can have access to free exclusive game tools and certain free gifts provided by game studios, so that they can have a better experience and understanding of new games. Huya is also inviting popular broadcasters to participate in the platform-based competitions for new games. Just as Dong Rongjie noted at the conference call that “leveraging our proven success in game promotion, we are confident we can identify and offer attractive new game content and enhance new games’ popularity, thus further solidifying our leading position in the game live streaming market and increasing our presence in the game value chain.”
In terms of financial performance, Huya further optimized its cost and expense structure for the first quarter of 2023, with gross margin increased significantly from the previous quarter. And 2023’s first quarter has also seen improved operational efficiency sequentially and annually. Ashley Xin Wu, Vice President of Finance of Huya offered more information at the conference call. She noted that “alongside our stepped-up efforts to optimize costs, particularly content costs, our first quarter gross margin rebounded sequentially, nearly reaching its level in the same quarter last year. Meanwhile, we continued to improve operational efficiency, with total operating expenses in the first quarter of 2023 decreasing by 26.2% year-over-year.”
As a result, the company achieves a net income of 44.8 million yuan for the quarter, with the aim to maintain current progress and pursue more gains in cost optimization and operational efficiency, in order to further solidify its financial foundation for long-term development.
As a live streaming platform that has gathered such a big user base for game and e-sports live streaming content, Huya has spared no effort to enhance its capabilities in content enrichment and technology upgrade, aiming to further elevate interactive experience for all sides.
On content front, the Huya Live platform broadcasted about 55 third-party professional e-sports tournaments for the first quarter, attracting a viewership of more than 400 million. Among these tournaments, LPL Spring, KPL Spring, and CFPL were the most popular events; in addition, Huya’s exclusive broadcasts such as LCK Spring and CS:GO tournaments EPL Season 17 and IEM Katowice were also warmly welcomed by users.
During the same period, 15 self-organized e-sports tournaments and entertainment PGC shows were also broadcasted, with the total viewership at around 77 million, among which Huya Cheshen Cup for Peacekeepers Elite and Jueying Cup for CrossFire Mobile being two standouts. The management stated at the conference call that Huya’s continued offerings in self-produced tournaments and programs can be seen as a strategy to “complement the licensed professional content supply on its platform”, and the company will adjust such content portfolios dynamically based on users’ interests.
It is also worth noting that during Huya’s annual gala period in March, a large e-sports event Huya Boom Fight was held in China’s Macao Special Administrative Region (SAR), inviting popular streamers, celebrities and amateur players to join competitions among game titles including League of Legends, Honor of Kings and Identity Five. The event not only attracted a wide audience both online and online, but also helped promote e-sports cultural exchange among youth groups in the Guangdong-Hong Kong-Macao Greater Bay Area.
On technology and product improvements, Huya introduced a virtual stage for the first time at its annual gala Huya Boom Night in March to live stream the show, which was an upgrade from the virtual e-sports venue launched in 2022. By adopting the virtual stage, online viewers felt as if they were onsite to share the immersive and interactive experience.
Furthermore, some other creative interaction features were added to make the online and offline viewing experience of the gala more interesting and fun. For instance, when entering the virtual scene, online viewers were able to join live performers’ fan camps, show support through their avatar costumes and decorations, and vote for their favorite teams. Virtual viewers could also use virtual graffiti tools to draw pictures and graffiti designs, which would be simultaneously presented on the stage, thus building a bridge to connect the online and offline audiences. With all the technological upgrades, encouragingly enough, the number of total online interactions and the popularity index of the gala on Huya platform broke the records of previous galas.
Additionally, the interactive game category on Huya platform is also gaining more traction, as such games allow viewers to directly engage with streamers and influence game outcomes in real time, thus bringing in a highly interactive and engaging experience. Correspondingly, Huya has introduced several interactive games through the Huya mini tool open platform, allowing broadcasters to select and apply those tools during their streaming sessions.
Regarding Huya’s international business, Nimo TV, the global live streaming platform has made some good progress in the recent months, and is actively expanding pan-entertainment content genre, alongside game live streaming, with a focus on MENA and Southeast Asia markets. The platform has made encouraging improvements in content planning, budget control and commercialization, moving toward a fast and healthy stage of development.
In addition, in early April, Nimo TV successfully concluded its first Nimo TV Global Gala in Vietnam, which brought together platform’s content creators, talent agencies and partners from across the globe, while taking the opportunity to express gratitude to all the broadcasters, agencies and partners for their continued faith, for making the Nimo TV community stronger, and for their tremendous contributions to Nimo TV’s increasingly enriched content.
Although there are some external uncertainties in the near term, Huya is positive about the overall market recovery’s prospects, in light of the company’s efforts in content enrichment, product advancement, and exploration of commercial opportunities, as well as continued improvements in operational efficiency, are setting the foundation for its long-term development. As Huya CEO Dong Rongjie said at the conference call, “we will continue to seek growth opportunities as the business environment rebounds, with an eye to create sustainable value for our users, broadcasters and all other stakeholders.”