Home Business NetEase released the 2022 Q2 financial report: R&D investment of 3.6 billion self-developed engine to accelerate the realization of domestic replacement – ​​yqqlm

NetEase released the 2022 Q2 financial report: R&D investment of 3.6 billion self-developed engine to accelerate the realization of domestic replacement – ​​yqqlm

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NetEase released the 2022 Q2 financial report: R&D investment of 3.6 billion self-developed engine to accelerate the realization of domestic replacement – ​​yqqlm

Source title: NetEase releases 2022 Q2 financial report: R&D investment of 3.6 billion self-developed engine accelerates the realization of domestic substitution

On August 18, NetEase announced its results for the second quarter of 2022. Driven by the continuous promotion of technology and product innovation, the company’s main business continues to maintain healthy development in a complex environment.

In this quarter, NetEase’s revenue was 23.2 billion yuan, and its R&D investment was 3.6 billion yuan, with R&D intensity accounting for 15%. During the quarter, NetEase Games accelerated the process of going overseas, with a net income of 18.1 billion yuan from games and related value-added services, of which the net income of online games was 16.8 billion yuan. Relying on the company’s self-developed engine technology, related products have successfully reached the top of more than 100 countries and regions around the world. It is worth noting that the “Online Game Services” section of the company’s financial report has been renamed “Games and related value-added services” since this quarter. At the same time, game-related value-added services such as NetEase CC live broadcast were adjusted from “innovation and other businesses” to “games and related value-added services”.

In this quarter, NetEase Cloud Music’s net income was 2.2 billion yuan, a year-on-year increase of 30%; gross profit margin improved significantly to 13% year-on-year; online music service payment rate increased significantly to 21%, continuing to lead the industry; platform independent musicians exceeded 500,000.

Q2 net income from innovation and other businesses was 1.9 billion yuan. This year’s 618, NetEase Yanxuan’s sales of various channels have grown steadily, and the sales growth rate of many core explosive products such as pets, home cleaning, and home has achieved triple-digits. NetEase Media has cooperated with the French Football Federation (FFF) and the Argentine Football Association (AFA) to become the exclusive online media partner of the top-ranked teams France and Argentina, and has reached in-depth cooperation in exclusive information, star interaction, collective portrait rights, etc. . NetEase Media has launched the “NetEase News Digital Collection Museum” to expand the long-term panoramic marketing boundary of the Metaverse, and has launched a number of co-creation themed digital collections.

Breakthroughs in the underlying technology accelerate the pace of domestic substitutionPromote product innovation and development

According to the financial report, NetEase’s Q2 R&D investment was 3.6 billion yuan, accounting for 15% of its revenue, maintaining a leading position in the Internet industry. In the past three years, the company has invested more than 35 billion yuan in R&D, with R&D personnel accounting for about 50%, and has continued to transform underlying technological breakthroughs into product innovations.

As one of the earliest companies in China to invest in game technology research and development, NetEase has launched self-developed engine technology research since 2006, and has successively launched two 3D cross-platform engines, NeoX and Messiah. In the past ten years, more than 20 original patents have been accumulated. At present, it has reached the world‘s leading level in key industrial technology fields such as 3D engines.

For example, Messiah’s original full-platform real-time dynamic global light solution is the industry’s first high-quality real-time global light algorithm that can run smoothly on mobile phones, and can achieve end-game-level 4K visual effects in mobile games. As the bottom layer and basic technology of the game industry and digital content industry, NetEase’s self-developed engine can not only serve MMO, FPS, TPS, ARPG, racing, sports competition and other mainstream content categories, but also support iOS, macOS, Android, PC, The development of all platforms such as PS4 makes the game user experience in line with the host, and the energy consumption and convenience are compatible with mobile, which truly injects vitality into the game products. The wide application of self-developed engines and the increase in the popularity of works will continue to accelerate the replacement process of domestic engines.

IPgiant systemTop 100 countries in the worldacceleratecultureboutiquego to sea

In the second quarter, NetEase launched a giant IP system based on its self-developed Messiah engine, which topped the rankings at home and abroad. After the global release of Diablo: Immortal, it quickly topped the iOS download rankings in more than 100 countries and regions, and the cumulative number of players worldwide exceeded 30 million.

Facing the global market, NetEase’s 24 studio launched the buy-out game “Eternal Calamity”, which sold more than 10 million in June this year, breaking the sales record of domestic buy-out games. The game has also officially landed on XBOX, and the number of new users exceeded 1 million within two weeks of its launch. In Vietnam, Thailand, the United States and other countries, this game has won a group of fans because of its unique oriental cultural background.

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With the help of 3D scanning and other technologies, “Eternal Calamity” has in-depth cooperation with cultural IPs such as Longmen Grottoes and Pingyao Ancient Weapons Museum to restore cultural relics and historic sites into the game. In “Eternal Calamity”, players at home and abroad can put on the “Mingguang Armor”, use the “horse head knife”, appreciate the “Dragon Gate Flying Sky”, and re-understand and fall in love with Chinese culture in the free and unrestrained competitive experience.

The results of digital-real integration help the development of new entity enterprises

In cross-border fields such as the real economy, game technology, as an important infrastructure for the integration of digital and real, is being widely used to form new social productivity. In the second quarter, NetEase strengthened technology and cross-industry empowerment, and extensively promoted the integration of digital culture and new physical manufacturing.

In the field of digital cultural heritage, “A Chinese Ghost Story” used digital technology to restore the Lusena Buddha in Longmen Grottoes, and customized a “virtual dance drama” for Xi’an Forest of Steles, which was praised by CCTV and the overseas edition of People’s Daily. Recently, on the occasion of the 20th anniversary of its launch, “Westward Journey”, together with Henan Satellite TV, launched the first full-screen video game national style festival “Juvenile Wonderful Tour”. elements, bringing the audience a cultural audio-visual feast of oriental aesthetics. The computer version of “Fantasy Westward Journey” Qixi Jinyi and the intangible inheritor of Xiangyunsha have carried out cross-border cooperation, bringing the intangible traditional fabric Xiangyunsha into the game. For the first time, the intangible cultural heritage skills are deeply integrated with the plot content, allowing traditional skills to approach young users in a new way.

NetEase actively promotes the transformation of “Made in China” into “Made in China“. If there is a dictionary pen, in order to inject core AI technology into a small electronic motherboard, we will promote cooperative manufacturers in the hardware supply chain to set up R&D laboratories, increase the number of R&D personnel to 65%, and promote the construction of a flexible supply chain to achieve rapid development. transformation.

NetEase also actively explores traditional industries such as medical services, construction machinery, conferences and exhibitions, and explores and solves problems such as inquiries about intractable diseases, construction safety, and the organization of large-scale conferences during the epidemic. Since this year, NetEase has been actively cooperating with a number of medical institutions to explore ultra-high-definition remote diagnosis and treatment. NetEase Fuxi mining robot has taken the lead in the construction of NetEase Hangzhou Phase III Park. In September, it will go to the key infrastructure railway projects in the southwest of the country to replace dangerous labor. The immersive event platform NetEase Yaotai, relying on NetEase Fuxi’s self-developed ACE intelligent engine, has held hundreds of events this year, covering product launches, photography exhibitions, industry summits, international academic conferences and other scenarios.

“One Screen” Online Course Public Welfare ProjectTechnological innovation bridges the education gap

NetEase also actively integrates scientific and technological strength into the revitalization of rural culture and education and the construction of education informatization, and is committed to narrowing the education gap through technological innovation and helping my country’s education to benefit universally. This quarter, NetEase’s “One Screen” educational public welfare project handed over its first college entrance examination transcript. With the help of the “one screen” online class technology in different places, many remote schools in China have made historic breakthroughs in the 2022 college entrance examination. In Linyang Middle School, Gulin County, Sichuan Province, this year’s “one screen” public welfare class has an online rate of nearly 96%, and two students were admitted to Peking University. Previously, the school’s admission rate was less than 20%. Currently. “One Screen” has covered more than 100 remote schools across the country, benefiting tens of thousands of students.

Ding Lei, CEO of NetEase, said that Internet technology has huge industrial extension value. NetEase will adhere to technological innovation, work closely with first-tier real industries, and apply accumulated technical “hard technology” to real scenarios, so that digital technology can truly penetrate into thousands of households.

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