DouYu International Holdings Limited

Good morning and good evening, ladies and gentlemen. Thank you and welcome to DOEU International Holdings Limited's third quarter 2024 earnings conference call. At this time, all participants are in listen-only mode. We will be hosting a question and answer session after management's prepared remarks. I will now turn the conference over to the first speaker today, Ms. Lingling Kong, IR Director at DOEU. Please go ahead.

Thank you. Hello, everyone. Welcome to our third quarter 2024 earnings call. Joining us today are Mr. Mingming Su, Chief Strategy Officer, Mr. Hao Cao, Vice President of Finance, and Ms. Min Yan, Vice President from Interim Management Committee. You can refer to our third quarter 2024 financial results on our IR website at ir.w.com. You can also check a replay of this call when it becomes available in a few hours on our IR website. Before we start, please note that this call may contain forward-looking statements made pursuant to the State Harbor provision for the Private Security Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations that involve known and unknown risks, uncertainties, and other factors not under the company's control, which may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or expectations implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statement, risk factors, and details of the company's filing with the SEC. The company undertakes no duty to revise or update any forward-looking statements for selected events or circumstances after the date of this conference call. I will now speak on behalf of our Interim Management Committee on our business updates. The call will then be handed to our Vice President of Finance, Mr. Hao Chao, for financial discussion. In the third quarter, we stayed closely aligned with market dynamics and preactively adopted our operational strategy. First, we focused on maximizing our co-competitive edge to enhance our commercialization capabilities and diversify our revenue streams. In addition, we further refined our business model and optimized our resources to reduce expenses. While solidifying our fundamentals, we continued to systematically invest in our stream of resources and new initiatives, further enriching the premium content and gaming service lineup across our platform. of this initiative reinforced our platform's game-centric content ecosystem. In the third quarter, our mobile MAUs were 42.1 million, a decrease of 18.6% year-over-year. We are seeing increased competition from short video platforms, particularly during the peak summer season when these platforms ramped up their user acquisition promotions. Our data analysis continues to indicate that user attrition was predominantly from low-frequency users with short viewing hours and low sickness. Despite certain short-term pressure on our user base, the engagement patterns of our co-user group, especially their viewing hours and activity levels, remained relatively stable. thanks to our consistent and strategic content operation optimization. Moreover, our gaming commercialization ventures have been actively joining in fresh users and re-engaging in active ones, fostering a more vibrant gaming ecosystem. During the quarter, we broadcasted nearly 30 large-scale official tournaments, including the LTL Summer Split, the KPL and CFPL Summer Tournament, the PEL Spring Tournament, the CSGO Black 4 Tournament, and the eSports World Cup, among others. Capitalizing on this official in-wind forecast, we regularly rolled out innovative derivative content. For example, during the eSports World Cup, we initiated targeted activities across gaming segments aligned with EWC events, curating distinctive content tailored to highlight our streamers' individual styles. This included a mix of streamer vlogs paired with live streaming, outdoor shows featuring streamers with event commentary, streamer coaching, and celebrations for Changping streamers. Through these activities, we enriched the user viewing experience and fostered more robust engagement between streamers and their audiences. Additionally, we have been actively expanding our gaming event content portfolio, recognizing our users' enthusiasm for hardcore esports titles. We exclusively forecasted the CSGO XSE Pro League this quarter, enriching the professional gaming content line-up for shooting games in series. With our self-produced content, we broadcasted close to 80 self-produced esports tournaments during the quarter. We expanded our course platform content co-creation partnership. Leveraging our platform's unique assets, we launched an array of collaborative tournaments across official event cycles, spanning a broad spectrum of gaming segments like League of Legends, King Pro League, Crossfire and Teamfight Tactics, as well as D&F Mobile. Another standout was our League of Legends event, the Legends League Cup. known for bringing veteran streamers and seasoned professional players together over the past decade in an innovative play format featuring a ban exception card, all while preserving streamers' distinctive play styles. This dynamic and engaging tournament format gathers enthusiastic user feedback, sparking widespread discussion and engagement. It not only sustained the buzz and appeal of our earlier collaborative tournament, but also facilitated user engagement, elevated streamer visibility, and breathed new life into our gaming segment. Blockbuster new games also boistered our gaming ecosystem, with the high-profile launch of the much-anticipated Black Mesa Wukong in August we rolled out promotional incentives and tapped into our robust network of PC game streamers to deliver exceptional streaming content. Thanks to the game's immune popularity, numerous streamers spontaneously took to live streaming, dramatically boosting the content supply during the initial launch phase. To expand our streamer content, We roll out waves of event-driven content, like gaming strategies and interactive challenges, which boosted user re-engagement and drew in new users, elevating the oral user activity across our platform. We have long been committed to optimizing our platform's content ecosystem by acquiring official tournament copyrights, signing top tier streamers, and innovating self-produced content. Each piece aims to provide users with high-grade content and viewing experience. With the shifting macro dynamics and the revenue pressure on the platform in mind, we needed to maintain adequate investment in premium content while simultaneously enacting new cost-saving strategies by improving content efficiency. To begin with, we enhanced the commercialization of our gaming event content. We have continually expanded our collaborations with game developers, harnessing GameCorp resources to explore and stage more diverse marketing initiatives. During the quarter, we continue to promote our game-specific membership program during the PEL official tournament. We also offered time-limited game prop promotions during broadcasts of official Crossfire events. In addition, we executed similar game prop commercialization initiatives in our self-produced events, such as the Douyu Commentary Cup and the collaborative events Gun King Cup, both in the crossfire gaming segment, all of which had successful outcomes and boosted our gaming content commercialization efficiency. We also focused on enhancing our streamer management efficiency to reduce costs, which promoted us to refine our streamer management strategy. we performed an in-depth ROI analysis for our existing streamers and modified their compensation assessment criteria. This new approach emphasized live streaming content quality and commercialization capabilities, motivating streamers to actively engage in more commercialization programs while pursuing their creative endeavors. So far, we have noted an uptick in the ROI for streamers after implementing the updated assessment criteria. Second, our summer recruitment campaign for streamers successfully attracted new streamers by widening the recruitment scope, diversifying recruitment channels, and improving streaming incentives with notable increase the daily average number of streams in the third quarter compared to June's daily average, coupled with substantially enhanced streamer retention rates. Overall, the ROI from our streamer recruitment initiative was higher than expected. Moving on to commercial monetization, our total number of paying users in the third quarter was $3.4 million with a quarterly approval of RMB 237. The year-over-year decline in paying users was caused by prolonged macroeconomic challenges and our strategic decision to scale back promotional activities and incentives that carry high operational costs. This initiative was unlikely to result in sustained spending by the users they attracted, as these users typically have low stickiness to our platform, consequently leading to low ROI and higher operational costs. The number of paying users remained stable quarter over quarter as we focused on maintaining our co-users' spending habits. To address the macroeconomic impact on users' willingness to spend, we introduced more budget-friendly paid products tied to platform rewards and game ports, while continuously promoting traditional, affordably-priced, revenue-generating products. This approach encouraged gamers' diversified spending and helped maintain the overall spending patterns of our paying users. As a result, well-quartered output was done year-over-year it remained relatively stable quarter over quarter. During the quarter, we deepened our commercialization collaborations with game developers, consistently promoting game prop sales through various models. The first model was a seasonal sales-driven approach based on collaborative promotions. We worked closely with game developers on large-scale promotional initiatives featuring Douyu's top tier streamers. Our promotional strategy prioritized fun and appealing marketing initiatives, as well as our platform incentives and benefits. We also harnessed core platform marketing channels to maximize outreach. Since piloting this sales-driven promotional model in late 2021, we have successfully attracted substantial external traffic and boosted gaming users' impressions of Douyu's GameCorp offerings. Whenever a similar promotion takes place, gamers associate it with Douyu's initiative, successfully positioning our platform as the to-go destination for GameCorp purchases and setting the stage for rolling out our diversified Game Corps sales models in the future. The second model is Don't Use Games-Specific Membership Program. We established long-term partnerships with game developers to market Game Corps. Our membership offerings integrated Game Corps with platform incentives aligning seamlessly with our streamer's marketing style and the needs of our users. Since its launch in the second half of 2022, this model has consistently driven stable revenue growth. The third model featured a multi-platform marketing approach led by game developers. Game prop stores were set up by game developers and embedded with links in our partners' live streaming channels. By leveraging our platform's content promotion and streamers' outreach efforts, we drew users into streamers' channels where they could click links to access GameProc stores and complete their purchases. This promotional model standardized streamer participation and better facilitated streamer engagement. bringing shared revenue opportunities for both streamers and the platform from GamePorp sales. In general, within these three models for GamePorp promotions, we strategically planned our marketing initiatives to capitalize on the timing of game updates, NewPorp launches, festivals, and seasonal events, increasing our GamePorp marketing visibility while expanding our diversified revenue streams. Moving forward, we will replicate these models for game promotions to a more comprehensive selection of gaming content scenarios, further reinforcing the commercialization capabilities across our platform. In summary, we proactively navigated various challenges during the first quarter. steadily advancing our revenue diversification strategy while reducing costs through adopted operational strategies and optimized resource allocation. We pursued balanced growth across traditional and new business segments, strategically allocating corporate resources to secure solid business fundamentals while consistently investing in new ventures with promising growth prospects. Each of these steps was underpinned by our commitment to our long-term development strategy for cultivating a vibrant, diverse, game-centric content ecosystem. We believe these initiatives position us well to overcome short-term challenges and lay a solid foundation for the company's long-term sustainable growth. With that, I will now turn the call over to our Vice President of Finance, Mr. Hao Cao, to go through the details of our financial performance in the quarter.

Thank you, Lingling. Hello, everyone. This quarter, we focused on strengthening our new revenue streams and tightening cost control measures in line with our long-term development strategy. Despite a challenging macroeconomic environment, our revenue diversification efforts have already shown a promising growth trajectory. Let's take a closer look at our financial performance for the third quarter. Our total net revenues decreased by 21.8% year-over-year in the third quarter to RMB 1.06 billion. However, supported by increased revenue contribution from our innovative business, we achieved a 3% quarter of quarter increase in our total net revenues, making our first sequential growth in the past eight consecutive quarters. Live streaming revenues were RMB 0.75 billion. down 34.7% from RMB 1.15 billion in the same period of 2023. Prolonged macroeconomic challenges and shifts in user spending behavior primarily impacted live streaming revenues. In response, we continue to scale back paying user acquisition promotions and provide more affordable product offerings to promote ongoing spending from our existing PAN users. As a result, there was a year-over-year decline in both the total number of PAN users and our quarterly up, which decreased by 22.5% to RMB 237 from RMB 306 in the same period last year. Meanwhile, our efforts to enhance our innovative business segment delivered continued growth. Innovative business, advertising, and other revenues increased significantly in the third quarter by 49.4% to RMB 311 million, up from RMB 208.2 million in the same period of 2023, contributing 29.3% of our total revenue. The year-over-year increase was primarily driven by increased revenues from our VoIP-based social networking service and game membership service. Cost of revenues in the third quarter of 2024 decreased by 14.1% to RMB 1 billion, compared with RMB 1.17 billion in the same period of 2023. These cost reductions were largely due to a decline in our revenue sharing fees and accounting costs, which dropped 6.2% to RMB 0.87 billion from RMB 0.93 billion in the same period of 2023. Revenue sharing fees deductions were largely from decreased live streaming revenues, which were partially offset by increased revenue sharing fees related to increased innovative business In addition, the decrease in content costs primarily came from improved cost controls in streamer payments. Bandwidth costs in the third quarter of 2024 decreased by 32% to RMB $72.2 million from RMB $106.1 million in the same period of 2023, primarily due to a year-over-year decrease peak bandwidth usage. Gross profit in third quarter of 2024 was RMB 60.8 million, compared with RMB 192.4 million in same period of 2023. The decline in gross profit was primarily due to live streaming revenues decreasing faster than the cost of revenues, resulting in reduced gross margin efficiency. Gross margin in the third quarter of 2024 was 5.7%, compared with 14.2% in the same period of 2023. In line with our strategic initiatives to streamline our operations, we reduced staff-related expenses across the board, leading to a 23% year-over-year decline in total operating expenses. Breaking this down further, Sales and marketing expenses declined by 11.9 percent in the third quarter of 2024 to RMB 79.3 million from RMB 90 million in the same period of 2023. Research and development expenses were reduced by 42 percent to RMB 43.2 million from RMB 74.5 million in the same period of 2023. General and administrative expenses decreased by 18.7 percent in the third quarter of 2024 to RMB 41.5 million from RMB 51 million in same period of 2023. Loss from operations was RMB 94.2 million in the third quarter of 2024, compared with RMB 8.8 million in the same period of 2023. Net income for the third quarter of 2024 was RMB 3.4 million, compared with RMB 76.4 million in the same period of 2023. Adjusting net loss, which excludes share of loss or income in equity-based investments, gain and disposal of investment, and impairment loss and fair value adjustments on investments was RMB 39.8 million in the third quarter of 2024, compared with an adjusted net income of RMB 71.9 million in the same period of 2023. For the third quarter of 2024, basic and diluted net income per ADS were both RMB 0.11 while adjusting basic and diluted net loss per ADS for both RMB 1.32. As of September 30, 2024, the company had cash and cash equivalents, restricted cash, restricted cash in other non-current assets, and short-term and long-term bank deposits of RMB 4.38 billion. or US dollar $624.7 million, compared with RMB $6.86 billion as of December 31, 2023. The decrease was primarily due to our special cash dividend distribution of US dollar $300 million and the US dollar $20 million allocated to the Shell Repurchase Program. Finally, I would like to update you on Shell Repurchase Program. At the end of last year, we announced our 2024 Shell Repurchase Program for up to US dollar 20 million. As of September 30th, 2024, we have completed the program, repurchasing an aggregate of US dollar 20 million in ITS under this program. Looking ahead, We are committed to navigating macroeconomic challenges and our shifting business landscape with resilience and agility. We will continue to use our new revenue streams to drive growth and sharpen our focus on cost efficiencies to mitigate near-term financial pressure. By pursuing new growth opportunities and reinforcing our fundamental strengths, We aim to support sustainable development of our platform while delivering enduring value for our stakeholders. This concludes our prepared remarks for the day. Operator, we are now ready to take questions.

Thank you, sir. Ladies and gentlemen, we will now be conducting the question and answer session. To ask a question, you may press star and then 1 on your telephone keypad. If you are using a speaker equipment, please pick up the handset before pressing the keys. If at any time a question has been addressed and you would like to withdraw your question, please press star and then two. For the benefit of all participants on today's call, if you wish to ask a question to management in Chinese, please immediately repeat your question in English. At this time, we will pause momentarily to assemble our roster. Our first question comes from Lee Zing of Bank of America. Please go ahead.

Hi. Good evening, Director. Thank you for accepting my question. My question is mainly about our traditional live broadcast business. Thank you for taking my question. My question is mainly regarding your live streaming business and how should we look at the future growth of your live streaming business and any strategic change here. Thank you.

Thank you for your question. As discussed earlier, ending 2024, we faced two key challenges, fierce market competition and a softer macroeconomic environment, both of which have impacted our platform's traffic and revenue. The decline in traffic was mainly due to persistent market competition, as short video platforms aggressively stepped up their promotions of gaming content and gaming services during their summer rotation. Accelerating user trends, in particular by low-frequency users. As a result, our mobile MAU for the third quarter decreased both year over year and quarter over quarter. On a related note, the scale of our revenue was mainly impacted by the macroeconomic strategies, with a notable drop in paying users to spend on live streaming virtual gifts, placing continued pressure on revenues from our traditional live streaming business. To tackle these challenges, we actively adapted our operational strategies. On the traffic side, We have been consistently adjusting our user acquisition strategies based on market competition and involving user habits. For example, in 2021, recognizing the market and established the gamer base, we put an end to the purely channel-driven customer acquisition approach at a relatively earlier stage. By 2023, we took a further step to scale back investments in low ROI marketing initiatives. Rather than slowly chasing user growth, we placed a stronger emphasis on retaining our core users. We further upgraded this user certainty in 2024 focusing on maintaining call users and improving user operational efficiency, which all aim at ROI enhancement. This involves increasing the appeal of our platform's content offerings, retaining and attracting users through distinctive premium content, and diversifying user traffic monetization channels to offer a variety of content consumption scenarios, including through game properties and other engaging offerings. We also upgraded our content strategy. We continued to enhance our different content metrics in reaching official tournaments and innovating our content. Based on the content consumption patterns of our hardcore users, we tailored niche content, targeting their needs, enforcing our leading edge in this gaming segment. Additionally, we actively administer resource sharing partnerships in cross-platform content collaborations, enhancing both the depth and breadth of our alliance. market competition, we believe high-quality content and a healthy, vibrant content ecosystem are the foundation for sustainable growth. Since content initiatives may not yield immediate results in the short term, our platform's traffic may continue to face competitive challenges for the foreseeable future. Nevertheless, Our co-users' consistent and stable content consumption behavior has afforded us more time and opportunities for exploring new ventures. Regarding new ventures, leveraging our deep partnerships with game developers, our strategy mainly focused on launching diverse marketing products related to game products. We have long recognized our platform's reliance on revenue from live streaming, and we have made attempts to diversify our revenue streams. So far, the most effective commercialization channel to align with our user base has been monetization initiatives that leverage game problems. Since late 2021, we have been actively engaging with game developers and implementing a phased approach, which has proven successful. The commercialization of game properties is largely facilitated through content promotion with a small share tied to official event content and the majority driven platform operations and stream content. With the implementation of multiple business models, we have established our platform as the preferred choice for users thinking to purchase game products. And we will consistently and methodically investors in new content and new ventures, thinking opportunities to drive renewed growth and prioritizing our platform's long-term development. Thank you. Next question, please.

The next question comes from Richie Sun of HSBC. Please go ahead.

Thank you, management, for taking my questions. Can management elaborate in detail about the strategy to optimize our core structure as well as the streamer's operations? and what are the detailed measures and goals and achievements? Thank you.

Thank you, Richie. So to answer your question, let's first review our relatively fixed costs, specifically the content costs within our primary business expenses, which have constantly accounted for 20% to 25% of our total revenues. Our content costs include streamer compensation, copyright fees, and cost associated with our self-produced content, with the first two making up the bulk of our content cost. To optimize our content structure, we have implemented a series of adjustments to our content cost, including refining our streamer management strategies. So let's get into the details. Firstly, we refined the control of copyright content cost. We dynamically evaluated the value of our platform's content through the length of both traffic and monetization, and adjusted our content strategy based on ROI. For example, in 2022, amid rising copyright costs of official tournaments, we adopted a selective purchasing approach, foregoing certain high-cost official tournaments. As price of these tournaments normalized in 2023, we resumed the strategy acquisition of the copyrights for key official tournaments. And then in 2024, navigating intensifying competition and industry shifts, we engaged actively with copyright holders to negotiate lower royalties for cost saving, exploring sustainable long-term commercialization models for copyrighted content. These initiatives directly reduced copyright costs and enhanced OWLI for our copyrighted content. And secondly, we optimized the cost of our self-produced content. By proactively balancing the supply of copyright events and our self-produced tournaments, analyzing the OWLI for self-produced and PGC content, And scaling back on low ROI self-produced content, we effectively controlled our overall content cost. In 2024, embracing the trend of collaborative content creation and content sharing, we actively pursued cross-platform partnerships, integrating each of the parties' advantages resources. With these enhancements, we delivered more high-quality content. amplify streamer visibility, and lower the cost of our self-produced content. Second, we restructured our streamer compensation framework under our long-term exclusive contract with core streamers. The average base compensation for those signed in recent years has been relatively high. This has been particularly impactful during period of revenue decline for the company. resulting in a rising share of overall streamer compensation costs related to our revenue. To improve the efficiency of streamer management and achieve better cost control, we have implemented a series of targeted adjustments. We conducted an in-depth ROI analysis for our existing streamers and revised their performance assessment criteria. placing greater emphasis on the quality of live streaming content and their ability to drive commercialization. We offered support by aligning platform resources with streamers' needs. We'd encourage streamers to actively engage in more commercialization programs while creating high-quality content, taking part in collaboration with game developers, cross-platform content partnerships, new game promotions, and game marketing, etc., all aimed at enhancing streamers' personal brand values and generating additional revenue for our platform. We have been gradually facing an adjustment to the streamer compensation system, with ongoing improvements based on streamers' feedback to ensure a smooth transition to the new framework. Fourth, we adjusted our approach to streamer contract renewal and recruitment. For streamers nearing the end of their contract, we renegotiated their compensation terms, primarily focused on lowering base compensation while elevating performance-based incentives. This strategy tiered streamer compensation to performance, fostering greater creativity and marketing effectiveness. Under the updated compensation framework, we comprehensively evaluated the signing cost and operational efficiencies of our streamers, negotiating and selectively renewing their contract. In the meantime, we continued to recruit and nurture new streamers to inject fresh fatalities into our content offering. During the initial onboarding phase, we assessed new streamers' performance based on the ROI achieved through our research support to better align streamer compensation with ROI. So all these initiatives are designed to drive efficiency improvement and cost control through strategy adjustment and refined management. all will preserve the high quality and the power of our platform content. We seek to secure the company's financial health through these measures, allowing us more time to adapt our business strategies to emerging industry shifts and to continue to deliver premium content and services to our users, thereby maintaining DOE's leading position in the crowded live streaming market. Thank you.

Next question, please.

The next question comes from Thomas Chong of Jefferies. Please go ahead.

The next question comes from Thomas Chong of Jefferies. Please go ahead. So I asked myself, thanks management for taking my question. My question is about the GB margin. So we see the change of the GB margin through quarter. So how should we think that growth profit margin and also the profit for the whole year of 2024 and also with adjustment of the operating strategies, so do we expect a profit improvement in 2025? Thanks.

Thank you for your question. In the third quarter, the year-over-year decline in gross margin was still mostly due to the decrease in live streaming revenues. Revenue share fees and the content cost as a percentage of revenue significantly increased year-over-year from 68.2% in the third quarter of 2023 to 81.8% this quarter. First, to look at revenue share fees, revenue share ratio of live streaming business increased year-over-year, primarily driven by the increased incentives of the summer relating to user retention. In addition, revenue from our voice-based social networking business significantly increased year-over-year, leading to a substantial rise in relevant costs of revenues. Then, regarding content costs, the changes in relatively fixed cost within our live streaming business, such as copyright fees and streamer-based compensation, et cetera, did not align with the year-for-year shift in our live streaming revenues. Consequently, as live streaming revenues declined, these costs continued to weigh our gross margin. While we have implemented diverse measures to optimize content costs, and streamer compensation, the effect of August margin improvement remained modest. On quarter-of-quarter basis, the increase in content costs as a percentage of revenue was primarily driven by higher copyright fees due to more copyright events being broadcasted during the summer. Regarding bottom line, by continuing to control operational expenses, The company's net loss did not widen sequentially in the third quarter, despite a sequential decrease in gross margin and reduced interest income. Specifically, our research and development expenses, as well as general and administrative expenses, continue to decline, driven by workforce optimization. While sales and marketing expenses slightly increased quarter over quarter, largely resulting from the promotional ramp up for our innovative business during the summer. In general, as we continue to refine the revenue mix, we have been taking a series of proactive measures to tackle the challenges posed by revenue decline. On the cost side, we managed content costs through a variety of strategies, including controlling copyright costs, balancing the supply of our self-produced tournaments, increasing partnership content, and adjusting the streamer compensation structure. We also leverage technological solutions to reduce bandwidth costs. All these endeavors are aimed at minimizing the impact of relatively fixed costs on gross margin. However, restructuring costs is a gradual process and the positive effects take time to materialize. In the near term, we aim to contain the extent of losses and refine our revenue cost structure through ongoing operational adjustments, steadily improving the company's financial performance over time. Thank you. Next question, please.

Ladies and gentlemen, just a reminder, if you have a question, You're welcome to restart and then one, a new telephone keypad. Our next question comes from Nelson Chong of Citibank. Please go ahead.

So let me translate the question myself. So thanks, National, for taking my question. My question is regarding the Domestic Youth Council and GG Game, Black Youth Wukong, given the strong popularity of the title. Can National share more details regarding the performance on Douyu platform, and how should we... What do you think of the future promotion and operation strategy for this type of game title? Thank you.

Thank you for your question. So Black Miss Wukong has become a breakout hit among both domestic and international gamers for its stunning graphics and classic journey to the vast narratives and innovative gameplay experience. As a highly anticipated single-player blockbuster, Black Miss not only amplified the lapel of China's single-player game, but also drove traffic growth on our platform. On its launch day, 23% of all streamers who went live across the Douyu platform were those in the Black Miss segment, and viewers of Black Miss content compromised nearly half of our platform's daily active user base. Additionally, among our new and returning mobile user, 37% were joining in by BlackMist, making the game our traffic engine for that day. So to fully capitalize on its buzz, we partnered with the developer for BlackMist before it released, creating excitement for its debut through diverse promotions like downloading rewards viewing giveaways, and community discussions, et cetera. We also recruited streamers and rolled out streaming incentive plans, facilitating significant streamer participation with a wealth of content offerings, which drove a surge of interest on release day. For Black Myth, we employed a diverse content operation strategy, and catering to different user needs. speedrunning streams for viewers eager to quickly grasp the storyline, while also supporting streamers who engaged in slower exploratory streamers highlighting the intercut details of the game, enhancing user immersion and retention. This immersive streaming approach resonated particularly well with console gamers and traditional players. fostering deeper interactions through stream viewing and game experience sharing, and thereby elevating user-sickness to our platform. This in-depth content consumption model underscore those differentiated advantages appalling to our core user base of hardcore gamers. Their engagement with game content is more profound and enduring. with more frequent interactions with streamers, which benefits the development and refinement of our overall gaming ecosystem. In addition, we initiated interactive activities such as game reviews and challenge competitions, continually encouraging community engagement and discussions to extend the game's popularity. We also shared and created highlights and standout moments in short video from live streams within and beyond our platform, driving additional traffic growth. While the excitement surrounding Black Myth as a single-player narrative game might be challenging to sustain in the long term, we proactively channeled users to more games. Are we still on the line?

Yes, you are connected. Please go ahead.

Yeah, please continue.

Okay, so with our comprehensive and sophisticated content recommendation capability, we guided users from the BlackMid segment to other top performing gaming segments, such as classic PC games and other console gaming segments, further enhancing user retention. For example, we encouraged streamers in these top-performing gaming segments to actively feature black myths in their live streams, providing them with traffic support and facilitating initiatives like collaborative live streams with other gaming streamers to boost content visibility. As users assessed any streamer's content, they could further explore the streamer's distinct style sparking new interest and gradually converting them into long-term users of our platform. So in summary, Blackmiss WooCon delivered fresh content to our platform and boosted traffic growth in the short term. Harnessing this opportunity with our carefully created content and tiered content operations, we effectively direct this influx of traffic from the high-quality new title to other gaming segments, contributing to our platform's ongoing traffic retention. Even as the buzz of the new game cools down, we expect to retain this user's stickiness and activity, reinforcing the development of Douyu's stable and sustainable and diverse platform ecosystem. Thank you.

Thank you. At this time, we have no further questions. I'll now turn back over to management for closing remarks.

Thank you all for joining our call today. We look forward to speaking with everyone next quarter. Thank you.

Thank you. The conference has now concluded. Thank you for attending today's presentation and you may now disconnect your line.