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Who can be the final winner of the Chinese game live streaming war?
Recently, the game live streaming industry is very "hot", attracting attention from the public frequently.
Last month, "Panda TV", which was founded by Wang Sicong, the son of Wanda Chairman, was shut down all servers and officially closed down.
Huya TV also released the 2018 Q4 and the unaudited financial report for the whole year on March 5th, Beijing time. After the release of the first transcript after the Huya IPO, its share price also ushered in a substantial increase, and its parent company YY share price also had an obvious rise.
The current game streaming industry is obviously not in smooth sailing. The future development pattern of the game live streaming industry will become a topic of great concern.
Huya's profit for 5 consecutive quarters
The competition between domestic game live streaming platforms is currently concentrated on the contest between several head platforms. As the first to go public in the US, Huya Inc. has become the focus of the game live streaming industry, and its rising share price also confirms the market's optimism.
According to Huya's financial report, Huya's total net revenue in Q4 was 1.504 billion yuan, up 103.1% year-on-year; net profit was 99.6 million yuan, up 1900.4% over the same period in 2017; non-GAAP net profit was 166.9 million yuan. The year-on-year growth was 486.8%.
It is worth noting that this is also Huya's fifth consecutive quarter of profitability. At the same time, non-GAAP net profit of Tiger Tooth in 2018 was 460.9 million yuan, which also achieved full-year profit.
In addition, in 2018, Huya reached 116 million at the average number of monthly active users of Q4, an increase of 34.5% year-on-year and 17.2% quarter-on-quarter; the number of paid users increased to 4.8 million, an increase of 73.1% over the same period last year. This shows that Huya's number of users and payment aspects have also shown good growth, and the user's stickiness to Huya has gradually increased.
In Q4 in 2018, Huya’s revenue from live streaming was 1,441.8 million yuan, an increase of 108.1% compared with the same period in 2017, accounting for 95% of total revenue. In terms of business revenue, it is clear that the live streaming business is still the core source of Tiger's revenue.
However, like other live streaming platforms, Huya has a single revenue structure that relies too much on live broadcast revenue. At present, there may be a situation in which live broadcast revenue will dominate in the next few quarters. The future revenue of Huya is facing a big risk.
After the release of the Q4 financial report, Dong Rongjie, CEO of Huya, once mentioned: “The more than 400 electric competitions broadcasted by Huya in 2018, attracted more than 1.6 billion viewers.” From the current business development of Huya, it is already focus on the development of e-sports business, layout of e-sports ecology, this is likely to be the key to the breakthrough of Huya’s revenue in the future.
After Huya’s earnings report, Douyu meet challenges again when aim for IPO.
After the live steaming industry experienced the last round of fierce competition, a new round of "hegemony" has also started. For the players in the first camp, Huya and Inke both seized the last bus in the market tide and started new development with the advantage of the capital market. The IPO's slow-moving betta has begun to lag behind the competition's lead, and is also preparing for the US stock market, trying to catch up.
After the live broadcast industry experienced the last round of fierce competition, a new round of "hegemony" has also started. As the players in the first camp, Huya and Inke both seized the last bus in the tide of listing and started new development with the advantage of capital market. And Douyu, who is slower in IPO, has begun to fall behind in the lead of competitors, and is preparing to list US stocks, trying to catch up.
On February 12, foreign media Reuters IFR (International Financing Review) reported that Douyu, the domestic game broadcast platform, will apply for an IPO in the US, raising about US$500 million, and it is expected to be listed in Q2 in 2019.
But Douyu's road to listing is not smooth sailing.
First is the change in the industry environment. After the rapid development of the live streaming industry, a cooling-off period was ushered in 2018, the growth rate began to slow down, and the market began to shuffle. According to statistics released by CNNIC, the number of webcast users in 2018 was 397 million, down from the end of 2017. With a total of 25.33 million, user usage dropped by 6.8%.
Therefore, many companies have begun to explore new business growth points while expanding their main business of live broadcasting and have extended their reach to the upstream and downstream.
In this context, if Douyu wants to go public, it must be competitive in the second half of the game of the live broadcast industry.
In addition, as Douyu's biggest competitor, Huya's performance ability has become another objective measure of Douyu – whether it can compete with competitors.
From the perspective of revenue and profit, the first grades issued by Huya IPO is considerable and dazzling: Huya’s total revenue in 2018 increased by 113.4% year-on-year, and net profit reached 460.9 million yuan. Huya realized the profit for the whole year and consolidating the status of the first live broadcast when the industry was generally depressed.
It can be said that the good performance of the Huya has raised the standard line of the peers and also revealed its own "sword." This gives more pressure to Douyu, who is preparing to log in to the US stock market in the near future.
At the same time, Huya's mobile user growth is also relatively good, gradually bringing higher paid conversion rates. And fighting fish has always focused on the PC side. In the face of the general trend of mobileization, what kind of development will it have? This is also worth looking forward to.
Huya and Douyu compete for the center, and the second and third echelons are struggling...
Will Tencent be the big winner?
Three years ago, the "War of the thousands of live streaming platforms" was still vividly in sight. The live broadcasts that were popped out in the APP Store search for "live" were countless, and all live steaming platforms were trying their best.
Today, the previous lively scene has disappeared, the live broadcast industry has been changed, and the pattern has gradually stabilized. The old platforms such as YY, Huya, Douyu, Huajiao, etc. have all been assigned to different echelons. The platforms such as the Quanmin Live have ended one after another. Many small platforms have not attracted much attention, and they have quietly retired.
In the field of live game streaming, the new pattern of Tencent, Douyu and Huya has emerged. According to the "2018-2019 China Online Live Industry Research Report" released by Ai Media Consulting, the 2018Q4 game content live broadcast platform mobile terminal monthly users TOP7 are Huya TV, Douyu TV, Panda TV, Chushou TV, Longzhu TV, Zhanqi TV
Among them, Huya and Douyu are equal and together become the first. Longzhu TV was suspended for rectification in November 2018, and Panda TV closed down，which has basically withdrawn from the first echelon's game live broadcast platform.
In this TOP7, it is not negligible that the game giant Tencent has a strong layout circle. On March 8, 2018, it invested 630 million US dollars and 460 million US dollars in fighting fish and tiger teeth respectively. Egame, which was inactivated in 2016, is also in the game. The mobile e-sports platform occupied a good seat, Zhanqi, Panda, and Chushou could not turn over temporarily.
In addition, Kuaishou, a short video platform developed by Tencent, also launched the independent app “Dianmiao Live”, which officially entered the game field and further increased Tencent’s territory in the game field.
In contrast, even if the "Toutiao and Tencent Wars" battle has burned into the game field, Tencent's influence in the game industry is still enough to stand out. Similarly, even if Douyu and Huya are hard to compete, Tencent behind them is a big winner.
"Tencent, as a first-in-command game giant, has two trump cards in the head game and the head game live platform. It has formed a closed loop of its own 'game development - game promotion - game advertising", which will not have strong power in a short time. Competitors, but not without worry," said a game industry reporter.
Panda, now regarded as a new force for live games, is over. When will the next player against Tencent appear?
This is an article from Sohu, original writed by Malayutou(麻辣娱投）， translated by Xu Yin.