On October 31st, the trial of Lin Qi, the founder of YOOZOO Interactive, who was poisoned to death, began.
The WeChat official account of Shanghai First Intermediate People’s Court released a message that on the morning of October 31, 2023, the first-instance public hearing of the case against defendant Xu Yao for intentional homicide and releasing dangerous substances was held. The First Branch of Shanghai People’s Procuratorate sent representatives to support the prosecution. Defendant Xu Yao, defense counsel, litigation agents for the victim, expert witnesses, and individuals with specialized knowledge attended the trial. The trial concluded at 22:15 on the same day.
In the trial, the court conducted an investigation into the criminal facts alleged in the indictment, listened to arguments from both prosecution and defense, as well as the final statement of the defendant. The court ensured the litigation rights of the defendant, defense counsel, and legal representatives in accordance with law. More than 50 people including the defendant, victim’s family members, CPPCC members, and members of various sectors of society attended as observers.
According to a person close to the scene of the trial, the verdict was not announced in court.
According to the previous report by Shanghai police: On December 17, 2020, at around 5 p.m., the police received a report that a patient named Lin (male, 39 years old) was suspected of poisoning during medical treatment at a certain hospital. After receiving the report, the police immediately launched an investigation. Through on-site inspection and interviews, it was discovered that Lin’s colleague Xu (male, 39 years old) had significant suspicion of committing the crime. According to media reports, Xu’s full name is Xu Yao and he was the CEO of YOOZOO Interactive and Three-Body Universe Company at that time.
On December 25th, 2020, YOOZOO Interactive announced that the company received a notification from Mr. Lin Qi, Chairman and General Manager of the company, as well as the actual controller and controlling shareholder, that Mr. Lin Qi passed away on December 25, 2020 due to ineffective medical treatment for his illness.
Backed by ‘The Three-Body Problem,’ difficult to save performance, accumulated losses exceed 600 million yuan in 3 years.
On the evening of October 30th, YOOZOO Interactive released its ‘report card’ for the third quarter of 2023. In the third quarter, the company achieved a revenue of approximately 333 million yuan (＄44.5 million), a year-on-year decrease of 23.85%; and a net profit attributable to shareholders of approximately 62.49 million yuan (＄8.5 million), a year-on-year increase of 1921.46%. In the first three quarters of this year, the company achieved a revenue of approximately 1.179 billion yuan (＄0.16 billion), a year-on-year decrease of 19.35%, and a net profit attributable to shareholders of approximately 10.44 million yuan (＄1.4 million), a year-on-year decrease of 85.89%.
Regarding the reasons for the performance changes, YOOZOO Interactive stated that the company’s main revenue comes from games launched in previous years. Due to the impact of game lifecycles, there has been a decline in revenue from existing products. Additionally, newly launched games have had a shorter online time. However, with subsequent new game releases by the company, it is expected to drive revenue growth.
As a veteran in the gaming industry, YOOZOO Interactive, which made its fortune in browser games and quickly gained fame in the industry, once enjoyed great success by acquiring the copyright of ‘The Three-Body Problem’ through its founder Lin Qi.
At the end of 2020, the founder of the company, Lin Qi, unexpectedly passed away. And in this year, YOOZOO Interactive also experienced its first loss since transitioning into the gaming business.
The financial report shows that in 2020, the net profit attributable to shareholders of YOOZOO Interactive Co., Ltd. was approximately -188 million yuan (-＄25.7 million), a year-on-year decrease of 173.17%. Subsequently, in 2021 and 2022, the net profit attributable to shareholders of YOOZOO Interactive Co., Ltd. is approximately 168 million yuan (＄23 million) and -635 million yuan (-＄86.8 million) respectively. Among them, the performance in 2022 hit the worst since going public, far below the net profit of over one billion yuan during its ‘golden period’.
Although the performance is volatile, the actions of YOOZOO Interactive, backed by the copyright assets of ‘The Three-Body Problem,’ still attract market attention.
In 2018, Lin Qi, who acquired the copyright of ‘The Three-Body Problem,’ established Three-Body Universe (Shanghai) Cultural Development Co., Ltd., specifically responsible for developing and operating the IP of ‘The Three-Body Problem.’ ‘The Three-Body Problem’ was also once seen as a potential source of significant performance growth for YOOZOO Interactive.
As of now, the animated version of ‘The Three-Body Problem’ on Bilibili and the drama version on Tencent Video have been released successively. Regarding the development of ‘The Three-Body Problem’ series IP games, YOOZOO Interactive responded to investor inquiries in the first half of this year: ‘The company is currently developing ‘The Three-Body Problem’ series IP games and is expected to gradually release them into the market within the next 5 years. Among them, two Three-Body IP products successfully passed GR nodes in the first quarter, and it is expected that the first official launch of a Three-Body game will be next year.’
Shanghai Jiayou takes over and becomes the largest shareholder.
However, after experiencing a series of turmoil, this company that has released many popular games eventually changed ownership.
Over two years ago, Lin Qi, the former controlling shareholder and actual controller of YOOZOO Interactive, passed away suddenly. Other members of the Lin family were also forced to step into the spotlight.
According to announcements from YOOZOO Interactive, Lin Qi held approximately 220 million shares directly before his death, accounting for 23.99% of the total share capital of the company. In 2021, through notarization, these inherited shares were jointly inherited by his children Lin Xiaoxi, Lin Ruijing, and Lin Li. Xu Fenfen is their mother and serves as their legal guardian. After the change in equity was completed, there was no controlling shareholder in the company at that time and Xu Fenfen became its actual controller.
However, just six months after the inheritance of equity by Lin Qi’s children in June 2021, YOOZOO Interactive disclosed that Xu Fenfen, the legal guardian of Mr. Lin Qi’s heirs, was planning significant matters related to equity transfer.
The once popular game ‘Old Soldiers’ ultimately could not escape being sold off. For a while, there were speculations about who would take over. In January 2023, YOOZOO Interactive announced the answer: Shanghai Jiayou Enterprise Management Partnership (Limited Partnership), referred to as Shanghai Jiayou for short, and its actual controller Wan Zheng entered the public eye.
YOOZOO Interactive announced that the heirs of Lin Qi and their legal guardians intend to transfer the 12.34% shares held by Lin Qi’s three children to Shanghai Jiayou. After the transaction is completed, Xu Fenfen will no longer be the controlling shareholder of YOOZOO Interactive, and Shanghai Jiayou will become the largest shareholder of the company.
In March this year, after the completion of the share transfer, Shanghai Jiayou officially took over YOOZOO Interactive. The legal representative of the company has changed to Wan Zheng, and Shanghai Jiayou has become the largest shareholder of YOOZOO Interactive with a 11.72% stake. Currently, there is no controlling shareholder or actual controller of the company, and Wan Zheng serves as the Chairman of YOOZOO Interactive.
The outcome of Shanghai JiaYou’s takeover and whether it can rejuvenate YOOZOO Interactive is still unknown. However, in the open letter addressed to top priority investors released by YOOZOO Interactive in April this year, Chen Fang, the General Manager of YOOZOO Interactive, summarized the company’s transformation as ‘new management team, new organization, new technology.’ He also mentioned that Mr. Wan Zheng, the newly appointed Chairman of the Board, has been involved in the gaming industry since graduation and has nearly twenty years of entrepreneurial and investment experience.