Shulou(Shulou.com)12/24 Report--

On December 7, Beijing time, Douyu (NASDAQ:DOYU) released his unaudited financial results for the third quarter of 2023. In the third quarter, Douyu persisted in building a "diversified content ecological platform with games as the core" and continued to implement a long-term sustainable development strategy to make the platform ecologically healthier, significantly improve operational efficiency, and achieve profits for three consecutive quarters.

This quarter, Douyu improved the interaction and stickiness of users by virtue of its perfect game content ecology, rich operation and play methods and user experience, and kept the user scale of the platform stable. Financial data show that in the third quarter, Douyu's average mobile MAU increased to 51.7 million, with 3.9 million paying users. While cultivating the community game ecology, Douyu also continues to optimize the profitability of the platform. Gross profit margin and net profit have increased for three consecutive quarters. During the reporting period, Douyu's total revenue was 1.359 billion yuan, with a gross profit of 192 million yuan, corresponding to a gross profit margin of 14.2%. Under non-US GAAP, the platform's net profit was 71.9 million yuan, an increase of 180% over the same period last year and 17.2% month-on-month growth.

Douyu interim Management Committee pointed out in the financial report: "in the third quarter of 2023, we actively implemented and optimized the growth strategy, and the company's business achieved steady development, which is in line with our goal of building a healthy and sustainable game community ecology. This quarter, we have continued a sound marketing strategy, and combined with the launch of new games, strengthen our efforts with manufacturers in game promotion and game cooperation, and constantly optimize the user experience through high-quality game content and efficient operation. "

Improve the quality content and improve the scale and activity of ecological users in the community

Affected by the seasonal factors of the summer peak season, e-sports of Douyu platform and game content launched more frequently in the third quarter. Pay close attention to the peak of summer traffic, Douyu continues to innovate many new forms and new ways of playing, bringing users an exclusive content experience.

This quarter, Douyu continued to improve the diversified tournament system, broadcasting a total of 52 major official events, including 2023 League of Legends LPL Summer Games, 2023 Arena of Valor KPL Summer Games, 2023 Game for Peace PEL Summer Games, Dota 2 Bali Major and Riyadh Masters, and Xinyou Dauntless contract Global Championships. Through diversified event broadcasting and featured two-way content, the visibility of traditional e-sports events has been greatly improved. Thus stimulate the enthusiasm of e-sports users of the platform to watch the game and enhance the activity of users. In the 2023 League of Legends LPL Summer Games, Douyu newly developed unique game playing methods such as "MVP / backpot list" and "on-screen comment support rate", which added a more interesting experience for users to watch the game, enhanced the atmosphere for users to watch the game in the official live broadcast room, and further increased the degree of discussion about the event. At the same time, Douyu continued to enrich the official content reserve this quarter, announcing that he had won the exclusive rights of League of Legends's three-year live broadcast of the Global Finals, the EACC Champions Cup Summer Games, the FIFA Intercontinental Cup (FECC) and other major events, laying a solid foundation for the continuous improvement of the official event system of the platform in the future.

In terms of self-made events, Douyu's production level and operating ability are still outstanding in the third quarter, creating a total of nearly 80 high-quality self-made events with high participation. For example, the second way Challenge of warm-up events based on LPL official commentary Cup, 2023 Douyu Honor Cup S6, 2023 Douyu Game for Peace Autumn Mingshan Cup S4 (Game for Peace National Competition Cooperation track), Douyu Crossing the Fire Line Warfare God Cup, Douyu Yong robbery Infernal Carp Cup, Douyu Yunding Chess Cup S3 (TOC6 Douyu platform track), intrepid contract Anchor Competition Kaiwa Cup S2 and other events. All-round and continuous to build the leading industry e-sports ecological content system.

In terms of game content, with the rising popularity of hot summer games and the successive releases of new games from major manufacturers, Douyu continues to innovate live content and operational ways of playing, attracting the majority of gamers to retain and pay. For example, around NetEase's popular game "Egg Party", Douyu not only built a game area with rich content inside the station, but also cooperated deeply with manufacturers to pry millions of fans' heads from outside the station to create a PGC program "Egg Boy forward". At the same time, he made use of the "Channel" to complete user activity and retention, creating a live broadcast periphery ecology, attracting a large number of young new users. The good program effect and the ultra-high popularity of game channels and game communities also continue to pry manufacturers to cooperate and upgrade, and then launch more games and activities to feed regional game channels and community ecology, realizing the win-win situation of platforms, anchors and manufacturers.

In terms of homemade PGC variety, with the help of the great influence of head game anchors and the strong interaction of entertainment variety shows, Douyu created more than 10 homemade variety shows with low cost, high revenue, strong content and good reputation in the third quarter, including "Farm Adventure", "brain Secret Service team", "Milk Troupe Redeparture", "OPPO Street Plan 2", "very Adventure" and so on. In the Nanjing Hero ensemble "Let's go Youth" of Arena of Valor's professional team, Douyu arranged for team players to experience farm life in the countryside, opening up a new live broadcast mode in which online celebrities / professionals jointly bring goods to the countryside. While promoting the revitalization of the countryside through innovative live broadcast mode, the young e-sports contestants recorded the unique personal charm shown by the ensemble for the first time, which also won the enthusiastic pursuit of the fans of the team.

Revenue from member business and game-related services increased for the third consecutive quarter of profit

Under the background of market stock competition, in the third quarter, Douyu paid special attention to deepening the exploration of profit model, and made diversified attempts in drilling powder service, paid play, new tour promotion and so on. According to the financial report, Douyu's total net income in the third quarter was 1.359 billion yuan, of which live broadcast revenue was 1.151 billion, advertising and other income increased from 93.3 million yuan in the same period last year to 208 million yuan, and gross profit was 192 million yuan, corresponding to a gross profit margin of 14.2%. Under the US general accounting standards, the net profit was 76.4 million yuan, an increase of 8300 yuan over the same period last year. Under non-US general accounting standards, net profit reached 71.9 million yuan, an increase of 180% over the same period last year and 17.2% month-on-month growth. The positive change in the financial report data highlights the outstanding results made by Douyu in the exploration of profit model in this quarter.

In terms of the upgrade of drill powder service, in the third quarter, Douyu launched the "drill powder feedback" feature, which opens personalized drill powder welfare rights to anchors, who can customize diamond powder benefits such as peripheral gifts or virtual game props according to the needs of users. through the personal "customized" welfare feedback of the anchors, deepen the emotional connection between the anchors and users, mobilize the enthusiasm of user interaction, and help enhance users' willingness to renew. At the same time, Douyu also launched a diamond powder carnival to provide exclusive gifts to light up the game, raise the payment rate and optimize the payment atmosphere of the platform. Thanks to the refined and personalized member service experience, the stickiness of Douyu diamond powder members' payment has been further strengthened in the third quarter.

In addition, Douyu also tries to create paid games that are suitable for different game categories according to different game characteristics. For example, in the sections such as League of Legends mobile games and Game for Peace, Douyu continued to deepen cooperation with manufacturers, strengthened the combination of live broadcast content and game props, and promoted the growth of promotion income such as the sale of game props and goods around the game. In the golden shovel battle section, Douyu innovated and launched the only unique paid game of self-walking chess products in the network, the "omnipotent Anchor sharing Challenge", which significantly enhanced the sense of interaction and participation between users and anchors, and played an obvious role in promoting user payments. it has been emulated by similar platforms.

Continuous development of technology R & D and innovation function to improve operational efficiency

Technological innovation can not only bring users a good user experience, but also improve productivity and reduce operating costs, so Douyu not only optimizes the operation model, but also continues to make technical research and development, relying on technical means to improve the operational efficiency of the platform.

With the addition of a large number of game categories and game products in the game market, the live content of game anchors is not limited to a single game. In order to improve the efficiency of the use of live content, Douyu independently developed a retrieval scheme for game partition, using deep learning technology to quickly identify the content played in the live room, and quickly aggregate the corresponding live content to the corresponding game partition. It not only increases the exposure of content, but also helps users quickly locate their favorite live content.

In terms of ecological health management of the platform, Douyu also uses technical means to practice fine management. Since 2017, Douyu has made efforts to develop his own content audit system, including image audit system, voice audit system and text audit system. After long-term data screening, cultivation and self-learning, Douyu's risk identification system has accumulated a large amount of violation characteristic data, built a strong computing power, and made its own risk identification model more accurate. In the third quarter, Douyu continued to strengthen the platform content management and audit mechanism on the basis of the existing risk identification technology system, improved the accuracy of system audit, and expanded the scope of use of system audit, while greatly improving the accuracy and efficiency of content audit, it also effectively reduced the pressure of manual audit.

On the whole, Douyu's profitability and operational efficiency further improved in the third quarter, the content richness and experience of gameplay brought forth the new, and got positive feedback on performance. With regard to the future development of the platform, Douyu interim Management Committee also pointed out, "in the future, we will continue to devote ourselves to the long-term growth and sustainable development of the platform, and on the basis of continuing to strengthen compliance construction, build a 'diversified content ecological platform with games as the core', provide better content and services through product upgrading and innovation, and explore new growth points to ensure the steady development of the company's business and finance. In order to consolidate Douyu's comprehensive competitiveness and leading position in the domestic game content industry. "

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