NetEase's Earnings Call: Unpacking Contradictions in Overseas Strategy, AI Integration, and Game Monetization
Earnings DecryptWednesday, May 21, 2025 2:53 am ET

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Revenue and Game Performance:
- NetEase reported total net revenue of RMB28.8 billion for Q1 2025, representing a 7.4% increase year-over-year.
- Online games revenue was RMB23.5 billion, up 15% year-over-year, primarily driven by new titles like Marvel Rivals and Where Winds Meet, and established titles such as Identity V.
- Growth was driven by successful new releases, increased engagement, and strong performance of flagship titles.
Youdao and AI Services:
- Youdao's operating profit achieved record highs, despite a 7% year-over-year decline in learning services revenue.
- The decline was due to strategic structural improvements, focusing on high-demand subjects and AI-driven innovations.
- Growth in AI subscription sales was driven by AI integration into products, enhancing user engagement.
Esports and Game Distinction:
- Identity V achieved a new quarterly high in player base, surpassing 400 million global registered players.
- Naraka: Bladepoint saw new record revenue in the first quarter, with updates to PvE content increasing player engagement.
- This success was attributed to continuous operational improvement, unique gameplay, and increased esports recognition.
Global Expansion and New Titles:
- Several new titles, including FragPunk and Once Human, performed well in overseas markets, enhancing NetEase's global presence.
- Marvel Rivals successfully launched in China, achieving the #1 spot on Steam's global top seller chart after Season 2's update.
- The success of these titles reflects NetEase's strategy to develop games suited for the global market, with a focus on innovation.
Revenue and Game Performance:
- NetEase reported total net revenue of RMB28.8 billion for Q1 2025, representing a 7.4% increase year-over-year.
- Online games revenue was RMB23.5 billion, up 15% year-over-year, primarily driven by new titles like Marvel Rivals and Where Winds Meet, and established titles such as Identity V.
- Growth was driven by successful new releases, increased engagement, and strong performance of flagship titles.
Youdao and AI Services:
- Youdao's operating profit achieved record highs, despite a 7% year-over-year decline in learning services revenue.
- The decline was due to strategic structural improvements, focusing on high-demand subjects and AI-driven innovations.
- Growth in AI subscription sales was driven by AI integration into products, enhancing user engagement.
Esports and Game Distinction:
- Identity V achieved a new quarterly high in player base, surpassing 400 million global registered players.
- Naraka: Bladepoint saw new record revenue in the first quarter, with updates to PvE content increasing player engagement.
- This success was attributed to continuous operational improvement, unique gameplay, and increased esports recognition.
Global Expansion and New Titles:
- Several new titles, including FragPunk and Once Human, performed well in overseas markets, enhancing NetEase's global presence.
- Marvel Rivals successfully launched in China, achieving the #1 spot on Steam's global top seller chart after Season 2's update.
- The success of these titles reflects NetEase's strategy to develop games suited for the global market, with a focus on innovation.

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