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Operator
Good day and welcome to the NetEase 2023 fourth quarter and full year earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brandy Piacente, President of Piacente Financial Communications. Please go ahead.
Brandy Piacente
Brandy Piacente Thank you, Operator. Please note the discussion today will contain forward-looking statements relating to the future performance of the company and are intended to qualify for the safe harbor for liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect NetEase's business and financial results is included in certain filings of the company with the Securities and Exchange Commission, including its annual report on Form 20F and in announcements and filings on the website of the Hong Kong Stock Exchange. The company does not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the 2023 fourth quarter and full year earnings news release issued earlier today. Please note that certain financial information regarding cloud music we will be discussing on this call has been prepared in accordance with IFRS. For additional information, including a definition of non-IFRS measures and a reconciliation of IFRS to non-IFRS financial results, please refer to Cloud Music's annual results announcement for 2023. As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the Netties corporate website at ir.netties.com. Joining us today on the call from NETI's Senior Management are Mr. William Ding, Chief Executive Officer, and Mr. Bill Pang, Vice President of Corporate Development. I will now turn the call over to Bill, who will read the prepared remarks on William's behalf.
Bill
Thank you, Brandy, and thank you, everyone, for participating in today's call. Before we begin, I would like to remind everyone that all percentages we're talking about here today are in RMB. 2023 marked another year of innovation for NetEase. We drove momentum across our businesses, expanding our top and bottom lines year over year for both 2023 and the fourth quarter. Continuous cross-category innovation at NetEase Games is actively expanding and diversifying our ever-growing game portfolio. On top of our inherent strengths in MMO and Chinese culture-derived titles, in 2023, we have landmark success and breakthroughs in diversified genres. This powerful combination is driving our game business with healthy fourth quarter performance from both our new and time-honored titles. Looking first at some of our MMO performance for the period, we remain highly committed to supporting and growing the robust appeal of our esteemed legacy franchises, such as Fantasy World's Journey, and Westworld Journey Online, with fresh content and exciting in-game events, like our annual celebration for Fantasy Westworld Journey. In the fourth quarter, we held a series of carnival-themed events that reinvigorated players, reaffirming the importance of Fantasy Westworld Journey's IP and its stature as one of the most influential MMORPGs in China. The longevity of these flagship titles also underscore our commitment and ability to elevate traditional game standards through ongoing in-game innovation. Adding to our conventional MMO titles, our new MMOs are pushing the boundary of what MMOs can be. The revolutionary advancements we have introduced with games like Justice are evolving the genre as a whole and continue to gain player momentum. In the fourth quarter, the Justice franchise reached a new milestone of 100 million active users, encompassing a broad and diverse user base. In our experience, these are telltale signs of games' potential for robust operating longevity. The innovative renovation seasonal mechanism, which both introduced new pursuits and reduced entry barriers, continues to captivate and inspire current users and new users alike. These are bolstered by rich challenges and achievements where everyone can develop individual interests and be rewarded equally, whether playing in PVP instances, combat-focused PVP sessions, or casual gameplay modes. The steps we're taking to strengthen our brand and engage players are also bearing fruit. By integrating players' other interests with our games, and giving them more in-game autonomy and choices, we create deeper connections between our games and player communities. For example, in the fourth quarter, players got to weigh in on the selection of collaboration partners for Justice franchise. In response to players' popular choices, we established a collaboration with the Chinese band Sensation, Phoenix Legend, providing players voice in shaping their gaming experience has proved highly resonant with our community. The event was a huge success, led by players' word of mouth marketing, with friends' recommendations driving the bulk of newcomers to the game. In addition to our MMOs, we made headway across a diverse side of genres in 2023, broadening our reach across more casual game players and entering new genres such as sports, and simulation games. These not only extend and enrich our broader NetEase community, but also highlight our ability to bring highly successful games to players in more diverse game categories. Touching on a few of successes in genres that are new to us, Dunk City Dynasty, as emerged as a groundbreaking basketball game, Here we have successfully attracted a large user base to a genre that was previously considered relatively small in China. To build on the game's initial success, we are providing more for our players, adding further diversified gameplay and exciting players to the team rosters. We have been expanding the player lineup since the fourth quarter, introducing MVP stars like James Harden, Russell Westbrook, Joel Emmett, Jamal Murray, and Aaron Gordon, as well as CBA legends, including Yi Jianlian and Gu Ailu. Beyond the game itself, we are committed to spread basketball game culture. To foster broader basketball game community growth, we are launching a foundation valued at more than 10 million RMB this year to support the sports development, including sponsoring university basketball games and facilitating event promotions. We expect this initiative to extend the reach of our game and the sport itself across a broader audience. Racing Master, Dianfeng Jisu, is another new hit for us, offering top tier content for all the racing fans. During the fourth quarter, we enrich the player experience with an extended selection of international professional racetracks and aspirational supercars catering to our robust demand from our player community. Following its official launch in China in June, Racing Master is now available in Hong Kong, Macau, and most recently Taiwan. We're atop the local iOS download and grossing chart in the first week of its launch. As we expand our reach across a growing range of genres, we are also capturing the attention of more female players with innovative games like Shijie Zhihuai. With this ACG-style romance game, we have once again defined conventions, introducing an infinite school backdrop and bringing players more storytelling and gameplay innovation. We released the Shijie Zhihuai in January this year, and the players continue to embrace it. having topped China's iOS download gaming chart during its first week on the market. For our blockbuster Aggie party, ,, we continue to cultivate our UGC ecosystem. Building on players' enduring enthusiasm, in December, we introduced a new feature, Aggie Code, unleashing even more content creation potential by offering an engaging and easy coding tool for our players. Coding lines can be now translated into user-friendly toy blocks to control events, actions, and conditions more readily, allowing creators to further unleash their creativity. This new innovation pushes far game coding limits, greatly increasing creation flexibility for the game's more than 26 million creators. To further expand our rich catalog of diverse games, we have a number of new titles under development. Today, I'd like to mention a couple of our new coming games that will be rolling out this year. First is She Diao, Condor Hero. Based on one of China's most popular martial arts novels, She Diao is an open world RPG that will be launching across PC, mobile, and cloud gaming platforms. We have established a highly immersive martial art world for the game, featuring open explorations and rich storytelling. All players will embark on their journey within a single server that can accommodate over 10 million players' simultaneous online interaction. Multiple rounds of tasks have shown an excellent performance so far, and we are on course for Showdown's soft launch on March 28 this year. Next comes Where Wings Meet, ,, which is designed to bring players an open-world gaming experience comparable to console gameplay. The game features realistic martial arts combat experience and an inclusive art style with a unique historical backdrop. We successfully concluded testing on the PC side in December, and we are currently gearing up for the game's launch later this year. Additionally, we are thrilled to announce that we have received license approval for Naraka Blakepoint on mobile earlier this week. We are excited to extend the immersive combat experience enjoyed by players on PC and console platforms to mobile realm. On the global stage, we continue to add studios around the world that cement our ability to draw on local talent and extend our international appeal. We are thrilled to announce the latest addition to our game studio portfolio, World Untold in Vancouver, Canada, and our newest U.S. addition, Bully Farm, headquartered in Los Angeles. World Untold is led by industry veteran Mac Walters, who has over two decades of experience in game and writing. well-known for his contribution in the acclaimed Mass Effect series. We welcome Mac and his team, who will be dedicated in creating new IP with their debut product already underway. The remote first studio, Bully Farm, is led by David Vandahar and his team of industry veterans. David is an award-winning and experienced game developer, best known for leadership on the Call of Duty franchise. They are currently working on an ambitious new AAA game set in the original universe with an emphasis on collaborative gameplay. We're looking forward to his contribution in creating more highly anticipated titles for our portfolio. As we have always said, people are most valuable, and talent development is one of our top priorities. The tailored course we offer our employees across various career development stage and professions ensure that native culture foster sustainable talent incubation. I'm pleased to announce that in the first quarter of 2024, we were the sole Chinese internet company to be awarded the ATD Excellence in Practice Award. This prestigious award and acknowledgement from the global talent development industry is an honor that further strengthens our commitment to cultivating the newest wave of internet talent. Alongside with our business momentum, we have assumed increasing social responsibility. This comes with a result to protect miners in our internet endeavors. In addition to our existing anti-addiction system, we have started integrating several functions, including a miner mode across our China-based China-based game line-up to protect miners, and will continue to steer the gaming ecosystem towards a healthier trajectory with our innovative products and technology. Now let's move to Yeodao. In the fourth quarter, Yeodao continued to propel technological innovation and product development, further improving profitability and cash flow. In our learning services, we have consistently raised the quality of our unique courses. Digital content services kept its healthy growth momentum in the fourth quarter. In addition, the retention rates were approximately 70% in the fourth quarter for both advanced level programming courses and goal courses. In 2023, 340 students from our programming courses received awards in the CSP programming competition held in China. Notably, 106 students won first prize, comprising over 20% of all the award recipients. We believe that our students' success highlights the high standard and effectiveness of our courses. Additionally, the utilization of our cutting-edge AI technology and the enhancement of our data infrastructure drove Youdao's online marketing services revenue to reach a record-breaking 474.1 million RMB in the fourth quarter. These AI-driven advancements have empowered us to enhance our real-time API technology capabilities, diversify our time base, and broaden the scope of our applications. Our smart devices saw an expected year-on-year decline in the net revenue in the fourth quarter. This was due to an optimizational initiative for our strategic channel structures, as mentioned last quarter. The steps we have taken are directed at reducing low ROI sales channels, which, in turn, affected channel inventory in the short term, but are expected to serve our long-term ROI-driven objectives. Encouragingly, we have observed signals indicating a recovery, including a return to healthy development in the fourth quarter compared to the previous quarter. The sales channels optimization has been completed. Our commitment to technology for innovation remains central to UDAO's business. We have consistently advanced our proprietary LLM and accelerated the development of large language model applications since the fourth quarter. Expanding our capabilities in virtual human tutoring, we upgraded the digital human language code High Echo in the fourth quarter, further enhancing its conversational capabilities to augment students' learning experiences we introduced the AI Tutor into our recently launched UDOT Smart Learning Path X20. The AI Tutor adaptively responds to students' inquiries on Path, simulating the interaction of a human tutor. Furthermore, we are observing the tangible impact of AI technology in truly improving performance. Our existing LLM features, particularly AI Box, continue to receive user acclaim, contributing to more than 100% year-on-year growth in the translation substitution fees for three consecutive quarters. Turning to NetEase Cloud Music, in the fourth quarter of 2023, Cloud Music continued to navigate quality development across our music-centric ecosystem. while further extending robust monetization momentum in the core online music business and improving overall profitability. The revenue from subscription-based membership in the fourth quarter continued a solid upward trend. This growth was primarily driven by an increase in the number of subscribers, along with a moderate improvement in our pool, as a result of our diligence in strengthening our music-centric monetization capabilities. With the introduction of new premium offering, including expensive content and innovative features, as well as the broadening of membership privileges and joint programs with external partners, we notably grew our subscriber base in the fourth quarter. Moreover, we considerably improved our profitability for Cloud Music throughout 2023, achieving full-year positive adjusted net profit under IFRS for the first time. We remain committed to fostering strong partnerships with music copyright holders and are actively working towards deepening this collaboration to expand our catalog of music label content, promote advantageous music genres, and increase album sales in cooperation with the top artists. In particular, music genres such as hip-hop and Chinese folk has been in a surge in the popularity of our platform, and we continue to cultivate content in these advantageous genres. 2023 also marked our debut of physical album market with our first co-published physical album, Hua Chenyu's new album, Hope, followed by the successful sales of Zhang Jie's physical album, In the fourth quarter. We continue to enhance our support system for independent artists by actively investing to initiatives that bolster musicians, improving music creation tools, and expand online and offline music exposure. We aim to help independent artists increase their influence and commercial income, ultimately strengthening the original music ecosystem on our platform. In December 2023, our platform had over 684,000 registered independent artists who contributed around 3.1 million music tracks to our library. Drawing on our expertise in music, a wide and varied user base, and in-depth user insights, our in-house studios continue to enrich our content matrix. offering high quality and unique music content. Our studios are gaining increasing ground in advantageous music genres. For instance, we produced a number of popular tracks in the fourth quarter, including Sunshine Boy and Sunshine Ghost, 2023, Yangguang Nanhai, Yangguang Luhai, 2023, and Shengshan, further solidifying our competitiveness in the hip-hop genre. Turning to our private label consumer brand. In 2023, Yanchuan continues to strengthen its brand presence with highly popular products in focus categories. With increasing consumer recognition of domestic-made products in China, Yanchuan has established a solid brand awareness across pet supplies and household cleaning, as well as office supplies and food, among others. Sales growth remained steady in 2023, with double digits increase in specific e-commerce channels year over year. Simultaneously, we are continuously optimizing Yanxuan's supply chain to improve cost efficiency by integrating automated systems. In 2024, we will continue to provide Yanxuan customers with consistent, high-quality original products. Across our business lines, the cornerstone of our competitive edge is our innovation. With our robust R&D capability, we have consistently produced unique products that drive our company and industry's research forward. In 2024, we remain committed to these principles, and we will bring more high-quality products to the market by crafting outstanding products we can simultaneously create value for both our user community and our stakeholder. This concludes William's comments. I will now provide a brief review of our 2023 annual results with focus on the fourth quarter. Given the limited time on today's call, I'll be presenting some abbreviated financial highlights. We encourage you to read through our press release issued earlier today for further details. Our total net revenue for 2023 will arm the $103.5 billion, or $14.6 billion, representing a 7 percent increase year-over-year. For the fourth quarter, total revenue will arm the $27.1 billion, or $3.8 billion, up 7 percent year-over-year. For 2023, our net revenue from games and related BES for RMB 81.6 billion on 9% from 2022. Revenue accelerated even faster in Q4 to RMB 20.9 billion of 10% year-over-year. The additional growth was primarily due to increased revenue contribution from launch of new games such as Justin Mobile, and sustainable development titles like AK Party. Revenues from mobile games continue to make up the lion's share of our game business, accounting to 77% of our total net revenue from online game operations in the fourth quarter and 75% for the year. Yield of net revenue for 2023 reached RMB 5.4 billion, and were up 2% year-over-year in the first quarter, in the first quarter reaching RMB $1.5 billion, primarily due to increased revenue contribution from UDOT's online marketing services. Net Ease Come Music net revenue will RMB $7.9 billion for the full year and RMB $2 billion in the fourth quarter, a 13% and 16% decline, respectively, compared to the same period last year. As we have previously discussed, the decline reflects lower revenue from social entertainment services as we adjust our focus to improve profitability in a sustainable manner. Net revenue for innovative business and others will be 8.6 billion for the year, up 9% year-over-year. In Q4, total revenue will be 2.8 billion, up 12.9% year-over-year. mainly due to increased revenue contribution from Yanshuan and some of our innovative business. The total gross profit margin was 62% in the fourth quarter, compared with 52.2% for the same period in 2022. Looking at our fourth quarter margin in more detail, gross profit margin was 69.5% for games and related BAS, compared with 59.1% in the same period last year. The increase will primarily attribute to a higher proportion of net revenues contributed by NetEase self-developed games. Our gross profit margin for use-out was 49.9% compared with 53.3% in the same period of last year. The decrease was mainly due to reduced revenue contribution from smart devices. which was partially offside by increased revenue contribution from online marketing services, which carry relatively lower margins. Cross-profit for Cloud Music improved in the fourth quarter, reaching 30.3% versus 17.8% in the same period a year ago. The margin improvement primarily resulted from increased revenue scale from membership subscriptions and continued improvement to our cost management measures. For our innovative business and others, gross profit margin was 34.4 percent, compared with 31.5 percent in the fourth quarter of 2022. The increase was primarily the result of margin improvement in Yanshuan and our advertising services. Total operating expenses for the fourth quarter was on the 10 billion, or 37 percent of total net revenue. Taking a closer look at our cost composition, our selling and marketing expenses as a percentage of total revenue was 15.6%, compared with 13.5% for the same period last year, mainly due to increased spending on gaming promotions. On a three-year basis, selling and marketing expenses accounted for 13.5% of net revenue. which remained relatively stable compared with 2022 when it was 13.9%. Our R&D expenses as a percentage of total net revenue also remained stable year-over-year at 16.5% in the first quarter compared with 16.1% for the same period last year. On a full-year basis, R&D expenses accounted for 15.9% of net revenue which remained relatively stable compared to 2022 when it was 15.6%. We remain committed in investing to content creation and product development. We are also seeing leverage in our R&D investment longer term. Our other income was RMB 876 million for the fourth quarter compared with RMB 1.5 billion last quarter. The decrease was mainly due to exchange rate of U.S. dollars against RMB fluctuating over the period, and mark-to-market value of certain publicly traded securities in our investment portfolio witnessed depreciation during the fourth quarter. As per equitable accounting standard, we are required to reflect these fair value changes. The effective tax rate was 13.8% for the full year and the fourth quarter. As a reminder, The effective tax rate is presented on an accrual basis, depending on arguable policies and our operations. Non-GAAP net income from continued operations attributed to shareholders for the first quarter totaled RMB $7.4 billion, or $1 billion, up 53% over a year. Non-GAAP basic earnings per ADS from continuous operations for the quarter was $1.62 or 32 cents US dollar per share. Additionally, our cash position remains strong. As of year end, our net cash position was about RMB 110.9 billion compared with RMB 95.6 billion at the end of 2022. In accordance with our dividend policy, we are pleased to report that our Board of Directors has approved a dividend of $0.21597 per share, or $1.07985 per ADS. Lastly, under our current $5 billion share repurchase program starting in mid-January last year, we have repurchased approximately 7.2 million ADSs as December 31st of 2023 for a total cost of approximately 644 million US dollars. Thank you for your attention. We would now like to open the call to your questions.
Operator
Thank you. If you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then 2. If you are on a speakerphone, please pick up the handset to ask your question. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Please limit your questions to one at a time. If you wish to have follow-up questions, please rejoin the queue. Your first question comes from Felix Lu with UBS.
Felix Lu
Let me translate myself. Thank you, management, for taking my question, and congratulations on the banhao for the mobile version of Naraka Bladepoint. My question is on the game. Can management share a bit more color on the R&D progress of the game? How would the mobile version differ from PC version? And what is your expected launch time for this game? Thank you very much.
Naraka Bladepoint
As for the game's experience on the mobile side and the difference between the PC side, I just want to say that we have accumulated a lot of gaming experience in the past two and a half years. So these are very valuable experiences that can also be used on the mobile side. As for the online time, 我只能跟你说是一切如期在进行。 我们目前定的时间是在二季度左右。 谢谢。 谢谢。 That's great.
Felix Lu
Thank you.
Bill
I will do the translation. For the mobile version of Naraka, we did a test. Everything is on track. We did a test in Chengdu back in December, and the result was fairly good. And regarding your question on the experience between mobile and PC, what William said is that during the past three and a half years operating on PC, we have accumulated a ton of experiences. And we're doing all the needed modifications, everything, optimization for the mobile version. And regarding the going live date, everything is on track. And now our best estimate is somewhere Q2.
Operator
Your next question comes from Alex Poon with Morgan Stanley.
Alex Poon
谢谢管理层介绍我的提问 恭喜很强劲的业绩和这个游戏的pipeline 我有一个问题是关于 单载派对出海的一些进展 我们去年已经上线 在很多国家都上线 请问今年的目标是什么 The second question is regarding the overseas expansion of AD Party. We have launched in many countries already last year. What are our latest thoughts for the game in 2024? My second question is related to the progress of Project Mugen. Thank you very much.
Naraka Bladepoint
We have achieved great success in China. Now we are also actively exploring the overseas market. We are still gradually verifying some ideas. So please wait a moment, don't rush. The second infinite question, please let Hu Zhiteng answer it.
Hu Zhiteng
Now we are in a very normal development process, and we will also be in a relatively stable state in the near future. At present, the direction of the entire team is very clear. We hope that this game will make a difference in the open world in the future.
Bill
Okay, I will do the translation. First of all, as everybody knows, Aggie Party is a huge success in China, and we have accumulated tons of experience. And regarding the overseas market, we're in the exploration period now, and we're doing that step by step, validating a lot of concepts and thoughts to try different things out. The tone we want you to get is that Please stay tuned. We're going to get there for the oversea market of AgriParty. Regarding the status of Project Mugen, it's under normal game development now. And of course, it's also in the process of applying for the publishing numbers as well. The product has a very specific, very clear positioning and development target. And we hope in the area of ACG open world games we can make again fresh enough to have this on the market. Thank you. Next question.
Operator
Your next question comes from Lee Jung with Bank of America Securities.
Lee Jung
Hi, 管理层,晚上好,谢谢接受我的提问。 我的问题主要是关于海外业务的, 有看到我们最近也在洛杉矶成立了一个新的3A的游戏工作室, 所以想请管理层跟我们分享一下整体海外游戏业务的进展, 还有我们有没有进一步扩张或者是继续投资海外游戏工作室的计划呢? 谢谢,我自己翻译一下。 Thank you very much for taking my question. My question is regarding the overseas business, and can you give us some updates on the overseas game plan, and do we have any plan to expand or acquire more overseas studios?
Naraka Bladepoint
We have our own studio in the United States, Japan, and the UK, and in other countries as well. This is a very normal thing for Wang Yi to have a goal to develop overseas business. So I think this is a normalization in the future. It is very normal to have a studio in places like Europe, the United States, and Japan. Thank you.
Bill
Yeah, so now we have studios in the US, in the United States, Japan, UK, and other countries. This is quite normal. When we are going global, we have set up our studios around the globe. That's quite normal. And it's going to be a new norm for us in the future. Thank you. Next question.
Operator
Your next question comes from Yong Bai with CICC.
Yong Bai
Thank you, Mr. Guan. I have two small questions. The first one is also about single-player party, or in terms of party games, how do we look at the future development and positioning of UGC ecosystem, and if compared with the beginning of 2023, what is the difference in the current user structure, and how do we look at industry competition? I will translate it by myself. For Aggie Party and the party game, how do we think the future of UGC in game content creation How is the user structure now compared to January 2023? And how to view the current computation in party games? And second one is, after so many successful domestic products, can we find some synergy between domestic and the overseas business? Thank you.
Naraka Bladepoint
UGC is definitely not an easy thing to do. in the global market to actively explore the innovative path of game development. Thank you. What is the second question?
Bill
The second question is that we have achieved a lot of success in many domestic products. When we move towards internationalization, what kind of synergy can be created?
Naraka Bladepoint
Yes, I will do the translation.
Bill
Regarding our understanding of the game, UGC type of game, first we would like to say the UGC game is not an easy job. Looking globally, not many companies successfully did that. And for NetEase, we have our strengths, our experience, our unique experience and strengths, but all we're doing is keep exploring. What we can do is keep a humble and creative attitude and keep exploring the new ways of being creative in the game design. And regarding your next question on the synergy between domestic success and going overseas, Games, the fun part of gameplay are, you know, are the same regardless, you know, where the game sits, where the player sits. So what we can do is leverage what we learn on the fun part, how to do a fun game, how to do a gameplay design, and apply that for global products. Thank you. And next question, please.
Operator
Your next question comes from Jia Longxiu with Nomura.
Jia Longxiu
晚上好,管理層,謝謝接受我的提問。 我這裡就是想問一個很快的問題關於這個 Egg Party. 我們留意到就是從去年年底以來, Egg Party 有在全國各地舉辦了很多線下的一些推廣活動。 Thanks, management, for taking my question. I have a question about egg party. We noted that since the end of last year, many offline promotional activities have been held for your game, Egg Party. Just wonder what is the trend for your marketing expense this year, whether or not this promotional expense for Egg Party was a driver for an acceleration in your marketing expense last Q4. Thank you.
Naraka Bladepoint
The increase in marketing expense in the fourth quarter, of course, is mainly due to the increase in sales. I think this is normal. So, you see, this year, during the Spring Festival, the DAU of Agri-Party exceeded 100 million. This shows that the market cost of our spending has received some positive and positive effects. Next year's market cost will not exceed this year's As the quality of the game gets higher and higher, in fact, for other companies, making a successful game becomes a more and more huge challenge. But in terms of doing high-quality games, we have long-term accumulation and huge investment in development. We believe that in 2024, Thank you William. I will do the translation.
Bill
Jialong, you're right. In Q4, if you look at our marketing spending, of course, as you can imagine, there's some factor of competition that we have to deal in the market. But in the meantime, you look at the recent performance, our performance during the Chinese year 2024, Aggie Party achieved 40 million DAU achievement, which shows that the marketing initiative we spent are quite The result is quite good and quite effective. Looking forward, we don't see a big increase on the marketing spending, and we keep exploring the most effective ROI on the marketing spending, as well as the more rigid on where to spend. And the marketing spending increase shouldn't be a concern. And William also talked about some greater macro backdrops that, as you can see, as the quality of games in general increase year over year, it's more and more challenging for other companies to compete in the market. For NetEase, because we have long-term, long-time accumulation in game development, everything, and we also invest bigly into our new projects, So to some extent, year of 2024 is actually a year of harvest to us. We are going to unleash the experience we accumulated over the past 20 years, and you will see more and more result of new games comes out. Thank you, and next question, please.
Operator
Your next question comes from Lincoln Kong with Goldman Sachs.
spk02
Hey, thank you for accepting my question. My first question is about the game. What are our plans for the release date of this game? Is it going to be a global multi-platform game? In the test, we saw that the game requires higher quality on the PC side. Now, for example, on the mobile side, in terms of game quality and performance, how high is the quality of the game? Second, I also want to pay attention to the whole market situation. In the past four years, we have seen that the market has a lot of uncertainty about the future of the global economy and consumption. My first question is about where we meet. So what's our target launch timeline for this game? There will be a cross-platform global launch for this time. And it seems during the testing, it requires quite high equipment for the PC world. So would that apply to the mobile world in terms of the gameplay and the components? How would that fit in both PC and mobile? And the second question is around the overall market. We do see some of the uncertainty around the macro economy and consumption going forward into 2024. So in those longer-term legacy games like Westworld Journey and Westworld, do we see any of the change in terms of the user spending behavior or paying willingness on those games? What's our outlook for this year's gaming industry?
Naraka Bladepoint
Yes, it is a very outstanding open world Chinese ancient martial arts theme game. We also pay great attention to it. In the process of our discovery, the Chinese martial arts theme must still be recognized by this martial arts theme. Players will be more actively involved, so we also want to use this work to promote and spread ancient Chinese martial arts culture and ancient Chinese culture to the whole world. We believe that many people will like this um Every month I spend tens to hundreds of dollars to play a game that I like and have a happy experience. In fact, it is not so much related to the user's Red Cucumber economy. I think the most important thing is still the quality of the content. Because Chinese users Thank you.
Bill
I will do the translation. First of all, regarding your question to where wins meet, where wins meet, as we explained, is a game we spent three years developing. It's a very high-quality, you know, martial art-based open-world game, RPG game. And regarding the graphic question, that's something you don't need to worry, and players don't need to worry either. Our engine has the... capability to adapt on different hardware platforms to push the limit of that specific hardware, but also make sure it's runnable on different platforms. So that's been taken care of by our in-house game engine and everything. In the meantime, for the game itself, it's indeed a high-graphic game on advanced hardware platforms, and also From our experience, we saw people like the Wuxia culture like to play the game, and we hope this game could be a vehicle that we could promote the Wuxia culture to the world as well. And to your second question regarding the macroeconomy uncertainties, how will that impact the game performance? From our observation, actually, gamers, they spend pretty prudently how much they spend in different games to get the fun they are pursuing. is not, from our experience, not very related to macroeconomic conditions. It's actually more related to the quality of the game itself. Now, as we said, the gamers, not only in China, but globally, become more and more picky regarding the quality, which puts all the developers included to spend more and more effort to making high-quality content. Yeah, that's kind of the game industry macro we're in. Thank you. And next question, please. I think we have time for one last question.
Operator
Thank you. Your last question comes from Richie Sun with HSBC.
spk05
Thank you for accepting my question. I want to ask about social media and Yanyun. The game will be released in March, and the game will also be released in the first half of the year. In fact, the user image of these two games is the same as the game we already have. In fact, how high is the frequency? How will the company coordinate the promotion and the time table of the game to push the heat of the game to the extreme? When will the game be released? So I will translate this question myself. So sure, there will be launch in March and Where We Meet can be launched in first half. So in terms of the user demographics, how big is the overlapping between these games and now existing games? And how would NetEase coordinate the promotion and launch schedule to maximize the hit rate? And when would Where We Meet be launched? Thank you.
Naraka Bladepoint
These two games, although they look like Wuxia-类的题材,但是它的IP是完全不一样的。那色雕的用户群体主要还是在中国的这个金庸小说的一个武侠迷。那燕云十六生,它的用户就是一个完完全全对中国古代,它是一个基于古代现实的一个题材。 So there are still differences, and different team development, artistic performance, system design, all have a huge difference. So there is no overlap in this. I think it's just that this market needs a very good, high-quality, five-star game. NetEase has just prepared two different Thank you.
Bill
Yeah, check out the translation. Yeah, so regarding your question on the two different martial arts-based games, these two games have totally different IP attributes. One is very beloved by Jingyong fans. The other one is more like an Asian reality kind of setup. And both games are... are developed by different teams with different art style, different system setup. We don't see that the game is going to have a lot of collaboration with other games. And actually, our view is the market is actually looking for high quality Wuxia, you know, open world games. And by offering, you know, two high quality Wuxia games in the market with different positioning, we hope we can push the market further. And on the go-live date, everything is being prepared. Everything is on track. And, yeah, everything is on track. Thank you.
Operator
And that concludes the question and answer session. I would like to turn the conference back over to Brandy Piacente for any additional or closing comments.
Brandy Piacente
Thank you once again for joining us today. If you have any further questions, please feel free to contact us and have a great day.
Operator
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.
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