Video-streaming and
mobile gaming company
Bilibili announced a 61 per cent year-on-year gain in net revenue for the third quarter, beating expectations as it grapples with a tighter regulatory landscape amid Beijing’s crackdown on the digital economy.
The Shanghai-based company said net revenues reached 5.2 billion yuan (US$808 million) for the quarter, higher than the expected 5.17 billion yuan, according to a composite estimate from 19 analysts compiled by Bloomberg.
Net losses reached 2.7 billion yuan, compared with 1.1 billion yuan a year ago. Amid increasing competition for consumers’ attention, the platform reported a 35 per cent rise in monthly average users (MAUs) to 267.2 million. Mobile MAUs rose 36 per cent to 249.9 million.
Video-streaming platforms have been caught up in a widening crackdown on the internet sector this year. This has been especially true for live streaming, an important contributor to Bilibili’s bottom line. Revenue from value-added services, which includes live streaming, rose 95 per cent for the quarter to 1.9 billion yuan.
In August, China’s Ministry of Commerce released a draft regulation for the live-streaming industry, detailing items no longer allowed to be sold during such broadcasts. Banned items include
sex toys, spy devices, foreign newspapers and medicine. It followed new live-streaming guidelines published in April by the same ministry and the Cyberspace Administration of China, the State Administration for Market Regulation and four other regulators.
Revenue from
video games has also been growing this year as Beijing cracks down on that industry. Bilibili unveiled a
record number of new games this year, and revenue from mobile games rose 9 per cent to 1.4 billion yuan for the quarter.
Beijing kicked off a fresh crackdown on the gaming industry in August when it increased limits on the time minors can spend on them. The new rules limit people under the age of 18 to playing only between 8pm and 9pm on Fridays, Saturdays, Sundays and statutory holidays.
Amid its success in gaming, though, Bilibili is already looking to the next big thing in the industry: the metaverse, which is loosely defined as a shared, immersive 3D virtual space where people can interact and trade. During the earnings call on Wednesday, CEO Chen Rui said his company has great potential to develop the metaverse concept, echoing sentiments recently expressed by Big Tech rivals such as
Tencent and
NetEase.
“Someone who hears the concept of metaverse and decided to get into this business probably would be a little bit too late,” Chen said, explaining that the elements necessary for success could take years to develop. However, he cautioned that Bilibili users are not necessarily going to be taking part in the metaverse soon.
“I do think metaverse is a concept with a long time horizon and is also a future objective,” he said. “I rarely heard anything discussion on a product level, because it does need a breakthrough in product and technology. So that’s why I do think this is still far ahead and is not going to happen in the next two or three years.”
Since its
HK$20 billion (US$2.5 billion) second listing in Hong Kong in March, Bilibili’s share price has rebounded from earlier volatility in tech stocks that saw shares drop to as low as HK$471 in October. Shares of the company, which is also traded on the Nasdaq, closed at HK$706 on Wednesday, a rise of 1 per cent.
Once a niche platform for fans of anime, comics and games, Bilibili has gradually
adopted a more YouTube-like model, attracting a wider audience across China using influencers and a variety of licensed content. Just a few years ago, the company still made more than 80 per cent of its revenue from mobile games. That share had fallen to just 26.7 per cent in the third quarter.
