NetEase is a leading Internet company in China
NetEase is a leading internet company in China. It was established in 1997 and started as a typical Chinese internet company providing traditional internet services, such as media and email services. Since 2001, the company has expanded its business to the online game sector. According to App Annie data, the company is now the world’s second largest mobile game company based on the user expenditures of iOS and Google Play in 2019. In 2006, the company launched an intelligent learning platform Youdao, which was spun-off and listed on the New York Stock Exchange in 2019. In 2013, the company launched a music streaming platform NetEase Cloud Music Platform. In 2016, the company launched its e-commerce platform Yanxuan. The company’s business can be divided into three major sectors, online games, Youdao, and other innovative businesses such as NetEase Cloud Music and Yanxuan. The company was listed on the Nasdaq Stock Exchange in 2000, and on the Hong Kong Stock Exchange in 2020.
The differences in targeting game genres between NetEase and Tencent
The company’s focus of game genre is significantly different to Tencent. Tencent’s main games Honor of Kings (王者榮耀) and Game for Peace (和平精英) are both moderate games with social characteristics in them. These games are user friendly to new joiners and suitable for both men and women in nature. Therefore, these games have a very high MAU. In addition, these games are backed by the 2 largest social media platform in China, Wechat and QQ. Hence, these 2 games basically monopolize the light-moderate mobile game markets in China, with very few similar games on the market. On the contrary, NetEase has been deeply focused in R&D of core game genres such as MMORPG genres since its inception. However, due to the high average game time and high spending nature of core games, which in game performance and rankings are hugely affected by the game time and money spent by users, the MAU of core games are significantly lower. But at the same time, core games have characteristics of higher ARPU and longer life cycles. Taking into account Tencent’s absolute innate advantages in light and moderate games, the company avoids direct competition with Tencent and focuses on core games is a wise choice.