The mobile game developer turned a profit last year, helped by the release of new titles, but a lack of games under development could dent future growth
Key Takeaways:
The company is expecting to turn a profit of between 860 million yuan and 940 million yuan in its annual earnings
But it gained only four new game licenses last year, half as many as in 2023
Profits are rolling into China’s gaming industry after the blockbuster success of Black Myth: Wukong last year.
The hit release from the Game Science studio injected fresh life into the gaming scene, helping to shake off the effects of regulatory controls and brittle consumer confidence. And smaller gaming companies are also feeling the benefit.
Mobile gaming firm XD Inc. (2400.HK) recently projected better-than-expected annual profits after releasing new titles such as Heartopia and GoGo Muffin.
In a statement about its earnings outlook, XD forecast revenue of between 4.96 billion yuan ($680 million) and 5.04 billion yuan for 2024, a jump of around 46% to 49% from the prior-year figures. The increased turnover was projected to push the firm’s bottom line into the black, with a net profit of between 860 million yuan and 940 million yuan compared with a loss of 65 million yuan in 2023.
The positive profit alert went down well with investors. The XD share price rose 15.37% the day after the statement, taking the firm’s market value close to HK$18 billion.
The gaming industry demands hefty upfront spending for creative development, but with an uncertain outcome. Developers can spend heavily on new games only for them to flop with consumers and deliver disappointing returns. With low odds of success, producing a national hit can be …
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