Douyu (NASDAQ: DOYU) officially released its financial report for the third quarter of 2024 on November 20th. Despite facing challenging market conditions, Douyu has achieved significant breakthroughs in strategic transformation and business diversification. During the reporting period, Douyu’s innovative business, advertising, and other revenues saw a substantial increase of nearly 50%, successfully surpassing 300 million yuan, accounting for nearly 30% of the company’s revenue.
Market analysts believe that with the continuous rapid growth of Douyu’s innovative business, advertising, and other revenues, and the release of economies of scale, the company’s dependence on traditional live broadcast rewards is decreasing. Its platform and business transformation have now smoothly entered the deep water area. A firm strategic transformation is driving the company’s new business matrix, beyond game live broadcast rewards, to transition rapidly from quantitative to qualitative changes.
Innovative business, advertising, and other revenues reached 311 million yuan, accounting for nearly 30%, setting a new high. Douyu’s financial report for the third quarter of 2024 shows that the company achieved a total revenue of 1.063 billion yuan in the third quarter, which, although still lower than the same period last year, achieved the first quarter-on-quarter growth in eight quarters. The company achieved a net profit of 3.4 million yuan during the reporting period. More importantly, Douyu’s innovative business, advertising, and other revenues in the third quarter reached 311 million yuan, a significant increase of 49.4% compared to the same period last year, maintaining a high growth momentum.
The rapid growth of innovative business, advertising, and other revenues not only brings new growth points for Douyu but also further optimizes the company’s revenue structure. Currently, the proportion of this part of the business revenue in Douyu’s total revenue has also been further increased to 29.3%, setting a historical high. As these new business segments continue to grow and strengthen, Douyu’s risk of relying solely on game live broadcast rewards is gradually decreasing, and its platform and business’s long-term and sustainable development capabilities are thereby significantly enhanced.
The growth of Douyu’s innovative business, advertising, and other revenues is mainly due to its close focus on hot games and active exploration in content innovation and commercial operations. During the reporting period, Douyu launched various cooperation promotion activities through close cooperation with game manufacturers, which not only enriched the platform’s content ecosystem but also effectively increased user activity and stickiness. In the third quarter, Douyu tailored diversified platform promotion strategies for the public testing of multiple different categories of game products such as ‘Yongjie Wuji Mobile Game’, ‘Need for Speed’, ‘Unlimited Machine’, and significant events such as the return of ‘Hearthstone’ to the domestic server, effectively helping these game products to directly reach and attract the attention of a large player community.
Particularly noteworthy is the emergence of ‘Black Myth: Wukong’ in August, which has taken the domestic and global gaming market by storm. Douyu has fully leveraged its rich resources of PC game streamers to quickly launch high-quality live content. In conjunction with platform benefits, detailed game strategies, and creative interactive challenges, Douyu has greatly enriched the content ecosystem in the early stages of the game. It is reported that on the first day of the game’s launch, the number of Douyu streamers in the ‘Black Myth’ category accounted for 23% of the entire platform within two hours. This not only heated up the game’s launch but also effectively promoted the increase and return of Douyu users. Nearly half of Douyu’s daily active users watched game-related content that day.
Furthermore, during the reporting period, Douyu broadcasted nearly 70 official large-scale events, including the 2024 League of Legends World Championship (S14), League of Legends LPL playoffs, King Pro League summer season, CrossFire CFPL summer season, Peace Elite PEL spring season, CSGO blast autumn season, EWC E-Sports World Cup, and exclusively aired the CSGO XSE Asian Professional Invitational (XSE ProLeague).
Douyu also hosted nearly 80 platform e-sports events, covering multiple game categories such as League of Legends, King Pro League, CrossFire, Teamfight Tactics, and DNF mobile game. Among these, there were a series of cooperative events launched in partnership with cross-platform content creators, leveraging the platform’s unique advantages. These events attracted a large number of players and drove the rapid growth of innovative businesses such as game prop sales and membership services. The interim management committee of Douyu stated: ‘In the third quarter of 2024, we actively adjusted our company’s operational strategy to flexibly respond to changes in the external environment, and firmly implemented the long-term development strategy of ‘a diversified content ecosystem platform centered on games.’ On one hand, we focused on the company’s core strengths to enhance commercial capabilities, and on the other hand, we optimized operational methods to improve the cost-effectiveness of our business and coordinated platform resources to enhance operational efficiency.’ The platform’s ecological foundation remains stable as the business transformation gradually moves from quantitative to qualitative change. While maintaining the growth of innovative businesses, advertising, and other revenues, Douyu also successfully stabilized the platform’s user ecological foundation. In the third quarter, Douyu fully utilized the summer season to make orderly investments around anchor resources and advantageous businesses, continuously outputting high-quality content and game-related services, enhancing user stickiness. The third-quarter report data shows that in terms of user data, the company’s mobile average monthly active users (MAU) for the third quarter of 2024 was 44.1 million, with a total of 3.4 million paying users. Additionally, it is worth mentioning that in the third quarter, Douyu continued to improve the ‘four-in-one’ (business compliance, content compliance, process compliance, and data compliance) compliance system construction, further strengthening the platform’s compliance management mechanisms.In terms of specific actions, Douyu has intensified self-inspection and standardized management. Particularly in preventing online fraud, prohibiting private transactions, combating online gambling, removing vulgar and pornographic content, blocking illegal links and non-compliant audio and video, it has launched the ‘Clarity Action’ many times for special governance.
Douyu has also launched an anchor learning center and added a learning and scoring mechanism, further upgrading the compliance education for anchors to ensure that every anchor deeply understands and complies with platform rules. Analysts believe that the stability of the platform’s ecological foundation and the construction of a strong compliance system have laid a solid foundation for Douyu’s strategic transformation to enter deep waters and achieve continuous breakthroughs. ‘At present, Douyu’s business other than game live streaming rewards has reached nearly 30%, which has reached a considerable scale. The diversified business brought by its strategic transformation has begun to gradually change from quantitative to qualitative changes.’ Douyu also stated in its earnings press release that in the future, the company will continue to invest in anchor resources and new businesses. Through content creation and product upgrades, it will continuously provide users with high-quality content and rich game-related services. Facing macro environmental changes and industry fluctuations, the company’s primary goal is to stabilize the fundamentals of its business, balance the development of traditional and new businesses, and allocate resources in an orderly manner to optimize the platform ecology, so as to achieve the company’s long-term sustainable development.
