Tencent-backed Chinese game-centric live streaming platform Douyu (NASDAQ: DOYU) Tuesday reported a 53% year-on-year increase in its total net revenue to 2.28 billion yuan ($321.1 million) in Q1 2020. The revenue from live streaming business accounted for more than 90% of the total revenue, reaching 2.11 billion yuan ($297.9 million) in the quarter ended March 31, 2020.
The company attributed the revenue growth to platform features facilitating user and streamer interactions, stimulating the number of paying user to grow 26.2% to 7.6 million in the quarter and increasing their payment frequency.
Net profit rose to 254.5 million ($35.9 million) from 18.2 million yuan in the same period of 2019, the company said in its unaudited financial results on Tuesday. Adjusted net income increased by 741.7% year-on-year from 35.5 million yuan to 296.9 million yuan this year.
“Our first quarter financial performance continued to exceed our expectations,” Hao Cao, Vice President of the company said in the report. “Looking ahead, we plan to continue to strengthen our operational efficiency and remain dedicated to generating sustainable long-term shareholder value.”
Despite the strong revenue and profit growth, the company posted a year-on-year decline of the average MAUs due to the COVID-19 lockdowns.
“The closure of the internet cafes during the pandemic is the main reason for the decline of our PC users,” the company said in the conference call on Tuesday evening. “However, we still maintain a stable mobile MAU growth of 15.3% in the first quarter. We believe that the mobile users have a higher level of engagement and a higher pay ratio than the PC users.”
Douyu has been leading the Chinese gaming live streaming industry since 2014 and gained access to a wide variety of esports content. However, other video streaming platforms such as Bilibili and Kuaishou are stepping in the game and eyeing the same territory.
Bilibili, the former subculture video streaming website that is now making its way into the mainstream, reported a 32% growth in its video games segment last week, earning the company 1.15 billion yuan ($162.5 million) which is nearly half of its total revenue in the first quarter.
However, Douyu said the industry’s competitive landscape did not changed significantly with new players entering the game.
“As a leading game live streaming platform, we will continue building our game-centric content ecosystem,” the company said in the conference call. “Our premium top and medium-layer live streamers help us create strong content barrier, giving us more advantages when competing with both existing and incoming players.”