Perfect World, one of the largest gaming and entertainment companies in China, reported steady revenue growth from its gaming business in 2019 and the first quarter of 2020, powered primarily by high-performing mobile titles that the company released in 2019, according to filings the company submitted to the Shenzhen Stock Exchange on Friday.
While the company’s overall revenues remained stagnant for 2019, its gaming revenues rose 26.6% year on year to RMB 6.86 billion. The company attributed the increase to stable revenues from legacy PC client titles such as Perfect World International and Jade Dynasty, as well as new mobile games launched in 2019, including Perfect World Mobile and ReEvolve, both published by Tencent.
For the full year of 2019, revenues from PC client games increased 10.14% year on year to RMB 2.42 billion, with a gross profit margin of 60.1%. Mobile titles contributed 56.6% of the company’s gaming earnings for the year, bringing in RMB 3.88 billion in revenues, with a gross profit margin of 43.2%. These high margins helped the net profits of the company’s gaming business jump 38.7% year on year to reach RMB 1.90 billion.
Perfect World also benefited from the industry-wide growth caused by the COVID-19 lockdown in the first quarter of 2020 and saw its gaming revenues surge 47.7% compared to the same period last year. Gaming-related net profits for the first quarter also shot up 67.3% to RMB 608.4 million.
The company is actively developing a number of massive multiplayer online role-playing games (MMORPG), simulation games (SLG), and collectible card games for 2020.
Perfect World has been expanding its influence in the Chinese esports scene in 2019, co-hosting The International 2019 (Ti9) for MOBA title DOTA 2 in Shanghai in August with Valve, which was the first time the championship was held in China. In addition, the company is also actively pushing to release Steam China, the localized version of the World’s biggest digital game distribution platform, which will be entirely separate from the international version.
Cloud gaming is another area where Perfect World has been trying to secure a footing. In 2019, the company partnered with the three major telecom providers in China to release titles on their respective cloud gaming platforms. Perfect World is also reportedly negotiating with Google’s Cloud gaming platform Stadia for potential partnerships.