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NetEase sees Q3 growth with mobile titles, Western partnerships

Net revenue increase of 35.1% YOY driven by Chinese mobile releases, Battle for Azeroth, and Minecraft

NetEase has reported its financial results for Q3 of fiscal year 2018/2019, showing continued solid growth in its mobile titles and strength from its partnerships bringing Western titles to China, such as World of Warcraft and Minecraft.

The company posted a net revenue for Q3 of 16.9 billion yuan ($2.5 billion), which was up 35.1 percent year-over-year. Of that, online game services accounted for 10.3 billion yuan ($1.5 billion) up 27.6 percent year-over-year. NetEase also brought in a gross profit of 7.5 billion yuan ($1.1 billion), up 26.9 percent year-over-year.

NetEase saw profits from a number of new releases throughout the quarter. The first, Justice, was actually released at the tail end of Q2, but most of its impact was felt this quarter. In addition, NetEase also released the mobile titles Butterfly Sword, Ancient Nocturne, and Night Falls: Survival.

Furthering its Blizzard partnership, NetEase launched World of Warcraft: Battle for Azeroth in China, which resulted in increases in both total subscribers and revenue. The relationship between the two companies was further emphasized with the announcement of Diablo Immortals, which will be developed in a partnership between the two companies for a global release.

And as for Minecraft, NetEase announced the Chinese release had reached over 150 million registered users. The company said they were over 100 million registered users in its Q2 report.

"While the performances from our flagship titles remain remarkably steady, we are innovators at our core," said CEO William Ding. "NetEase is one of the very few companies that has consistently created distinct new game IP for both PC-client and mobile platforms. Over the last few months, we rolled out several more hit games including Justice, Ancient Nocturne and Night Falls: Survival.

"Additionally, we have taken a more global view of our online games business. As a result, our international expansion, took another leap forward this quarter, contributing more than 10 percent of total online game net revenues for the first time in our company's history. We are also very excited about our collaboration with Blizzard to bring one of their biggest games to mobile players, increasing our visibility and expanding our foothold in the global online games market."

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