Online entertainment platform Bilibili posts strong earnings in second quarter amid mobile gaming boom
- Bilibili’s mobile game revenue grew 36 per cent in the second quarter, more than NetEase’s 21 per cent but lower than Tencent’s 40 per cent in the same period
- Stay-at-home orders issued globally during the Covid-19 pandemic have pushed millions of people to turn to online consumption and entertainment
Mobile games continued to be the biggest source of revenue for Bilibili, accounting for 48 per cent of the company’s total revenue in the second quarter. Revenues from mobile games grew 36 per cent from the same period last year, reaching 1.248 billion yuan in the quarter.
“The increase [in mobile gaming revenue] was primarily due to the successful newly launched mobile game Princess Connect, and the sustained stable performance of existing mobile games,” Bilibili said in a press release on Wednesday.
Sales of games in China surged to 139.4 billion yuan from January to June, 22.3 per cent higher than the same period last year, according to a report in July by the government-backed China Audio-Video and Digital Publishing Association.
Bloomberg Intelligence senior analyst Vey-Sern Ling said Bilibili‘s strength is its highly engaged and youthful user base.
The company reported an average of 171.6 million monthly active users in the second quarter, while monthly paying users reached 12.9 million, more than double compared to the same period last year, according to the company.
“Our growth strategy continues to pay off as our platform becomes more attractive for users and business partners,” the company’s chief financial officer Sam Fan said, adding that “we continued to convert our growing traffic to paying users”.
“The appeal of the platform to advertisers is clear in the second quarter,” Ling said. Bilibili’s advertising revenues more than doubled in the quarter, growing 108 per cent year-on-year to hit 348.6 million yuan.
The Shanghai-based company also saw strong growth in its value-added services – including revenue from subscriptions and live broadcasting – which grew 153 per cent year-on-year to 825.3 million yuan.
However, the company still suffered a net loss of 570.9 million yuan, an 81 per cent increase from the same period last year, amid a 103 per cent increase in operating expenses from the same period last year. The biggest contributor to this was sales and marketing expenses, which Bilibili attributed mainly to spending more to market Bilibili’s app and brand, as well as promotional expenses for its mobile games.