NetEase, Inc. (NASDAQ:NTES) Q4 2015 Earnings Conference Call - Final Transcript

Feb 25, 2016 • 10:00 am ET


NetEase, Inc. (NASDAQ:NTES) Q4 2015 Earnings Conference Call - Final Transcript


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Onward Choi

thrive and were listed as the top two grossing games in China's iOS App Store in the fourth quarter.

I would also like to highlight a few of our new mobile additions that demonstrated strong performances during the fourth quarter, which include our licensed game, Kai-ri-sei Million Arthur as well as Invincible, the Kung Fu Panda mobile game and Chrono Blade. The foundations of our online games business can be seen in our PC-client games which have delighted players for more than 15 years. Our passions for these games remains strong and with that ideal comes new developments to complement our long-running successes.

For example, our self-developed 3D oriental fantasy MMORPG, Revelations maintained strong traction in the fourth quarter, and in November we launched open beta testing for our 3D warfare MMORPG Hegemon-King of Western Chu. During the fourth quarter we also released a number of new expansion packs for PC-client games including Tianxia III, Heroes of Tang Dynasty Zero and Kung Fu Master II, as well as launched a promotional campaign for Demon Seals. In addition to our successful and growing portfolio of self-developed online games, Blizzard Entertainment's Hearthstone Heroes of Warcraft continued to perform well and attract new players.

The steps we talked in 2015 to grow our business sets us on course to advance and diversify our games portfolio in 2016. To this end, we recently released a trailer for War Rage, a real-time tactical action game for PC-clients, which we expect to launch in 2016. We also plan to build on the popularity of our established PC-client titles with upcoming expansion packs for games, including New Westward Journey Online II, Tianxia III, Heroes of Tang Dynasty Zero, Demon Seals and Kung Fu Master II. Our mobile portfolio is also growing, as we work to introduce a number of gripping new titles this year. In January, we released Kung Fu Panda 3 and The X-World. These games quickly gained traction with players along with other compelling new mobile games, including Raven, Fantasy

Westward Journey Warriors and the mobile version of New Ghost. A series of new titles based on the best-selling novels by Mr. Gu Long, a famous wuxia writer, are also scheduled to premiere in the coming months. In addition to our games, we are expanding our reach with our Internet service offering. In the fourth quarter our advertising services grew 68.1% and our email, e-commerce and others business grew 355.5%, both compared with the same period in 2014.

During the fourth quarter we further strengthened our brand by hosting high-profile events, such as NetEase Annual Economist Conference. These types of events along with the steady popularity of our mobile news app helped to grow our advertising services business with the automobile, Internet services and telecommunication sectors as the top-performing advertising verticals in the fourth quarter.

As advertisers seek more and more mobile Internet marketing opportunities, our leading mobile product matrix provides us with a considerable competitive advantage, enabling us to maintain and grow our partnerships