Caught in the storm of layoffs! Perfect World "Left Behind", Saying "The Adjustment Process Will Inevitably Bring Pain"

China Times

2024-06-26 16:53China Times official account

Perfect World is still standing on the cusp of public opinion. Recently, news broke that Perfect World is carrying out its largest layoff in history. In 2023, the company's net profit will decline by 60%, and in the first quarter of this year, the company will achieve a net profit attributable to the parent company of -29.7641 million yuan. For reference, at a time when game companies are fighting in the summer season, the unusual news of Perfect World's layoffs has triggered volatility in the secondary market, closing down 5.67% on June 25.

Zhang Shule, an analyst of the entertainment industry, said in an interview with a reporter from the China Times that the decline of Perfect World is expected, and it has nothing to do with the overall environment of the game market, but is related to the long-term lack of innovation in the game field.

Layoffs

"The project has been cut to only 9 artists, but there are three PMs", "The first project team has cut half of the staff, the third project team has been partially single-shot, and the seventh project team has been packaged and sold," ""Perfect New World", "One Punch Man" and "Linglong" are going to be sold. Recently, the news of Perfect World's large-scale layoffs has spread.

Regarding the authenticity of the above news, a reporter from China Times interviewed Perfect World on June 25, but the other party did not respond. Perfect World's share price fell 3.96% on June 24 and closed down 5.67% to 7.32 yuan on June 25, hitting a new low in nearly 10 years.

However, in response to the rumors of layoffs, Perfect World replied to this reporter on June 26: "In order to actively adapt to the rapid changes in the external market environment, the company continues to carry out innovative exploration, transformation and upgrading, but it is true that some products do not perform as expected." In order to cope with the challenges, the company took the initiative to sort out and adjust, and adopted a series of solutions, including optimizing resource allocation, focusing on core projects, optimizing necessary personnel, and intensifying office space, so that resources can be more concentrated on core advantageous businesses. ”

"The process of adjustment will inevitably bring pains, and the company is trying its best to resolve the negative effects, but also hopes that the outside world can give some time and space, so that the company can focus on cultivating internal skills and improving operational efficiency." Perfect World also said.

In fact, as early as April this year, there were already voices on social media that Perfect World was dynamically adjusting according to the project situation, increasing investment in key projects, polishing some projects while controlling costs, such as "One Punch Man: World", "Perfect New World" and other projects will be adjusted, and multiple project teams will be packaged and sold.

Earlier in February this year, Perfect World also packaged the project for sale. On February 21, Perfect World announced that its subsidiary, Perfect Universe Investment Inc. (hereinafter referred to as "PUI"), entered into an Asset Purchase Agreement with ACA World, LLC, a subsidiary of Domain Capital Group, LLC in the United States. Under the terms of the agreement, ACA World, LLC will purchase PUI's holdings of Universal Pictures' portfolio assets for $164 million.

Compared with Perfect World's layoffs, major game manufacturers are currently in a hurry, such as Tencent's "Dungeons & Warriors: Origins",

Kulo's game "Singing Tide"; Although miHoYo's new work "Jeopardy Zero", NetEase's "Sixteen Voices of Yanyun" and "Black Myth: Wukong", a "domestic 3A game" developed by Game Science, have not yet been launched, players' expectations have been full.

According to Zhang Shule's analysis, the overall stamina of Perfect World's game business is insufficient, and this situation has appeared many times in many new games of Perfect World in recent years, and it often falls from peak to decline three months after (new games are launched). "The reason for this is that Perfect World has a strong MMORPG (massively multiplayer online role-playing game) and the mindset of introducing IP adaptation into games." Zhang Shule summed it up.

According to the reporter's understanding, the Perfect World mobile game "Tower of Fantasy" was tested in China on December 16, 2021, and the game's turnover will be at a high level in the early stage of product launch in 2022, generating a high performance contribution, and in the first half of 2023, Perfect World attributed the net profit decline of 66.60% to the fact that the "Tower of Fantasy" mobile game has entered a stable period, and the turnover has dropped compared with the initial stage of the launch in the first half of 2022.

Net profit fell by 60%.

Behind the layoffs, Perfect World's performance has also entered a downward channel.

Perfect World's revenue in 2023 will be RMB7.791 billion, up 1.57% from the same period last year. The net profit attributable to shareholders of the listed company was 491 million yuan, a decrease of 64.31% over the same period of last year. Among them, Perfect World's game business achieved operating income of 6.669 billion yuan, down 7.91% from the same period of last year, and net profit attributable to shareholders of listed companies of 490 million yuan, down 69.21% from the same period of last year.

Regarding the decline in net profit by more than 60%, Perfect World explained that due to the impact of the game product development cycle, the company launched fewer new games, and several games in operation continued to achieve long-term operation through content updates and fine marketing, but due to the impact of the natural life cycle, the turnover has decreased compared with 2022, and the corresponding performance contribution has decreased year-on-year.

Of course, the net loss attributable to shareholders of the listed company after deducting non-recurring gains and losses was approximately RMB82 million, narrower than the loss in the same period last year, and such losses mainly came from credit impairment losses arising from receivables.

The loss of the film and television business has also made the outside world question why Perfect World has laid off employees in the money-making game business instead of the loss-making film and television business.

According to the statements in the first quarter of this year, Perfect World achieved revenue of 1.329 billion yuan, a year-on-year decrease of 30.19%, and the net profit attributable to shareholders of listed companies was -30 million yuan, turning from profit to loss year-on-year.

Although Perfect World's "Persona: Phantom of the Night" opened its domestic public beta this year, and "Zhuxian 2" opened its first test on April 23, none of these sparks were splashed.

This year, Perfect World is also eye-catching in the launch of a full-motion live-action interactive video work of love simulation "Beauty, Please Don't Affect My Learning", which has been on sale since March 29, and players need to pay 36 yuan to buy the experience. As for why the game was produced and launched, Perfect World replied to the reporter of China Times, "The company makes full use of the advantages of the dual main businesses of games and film and television, cooperates with each other, and gives full play to the linkage effect." ”

In an interview with China Times, Zhang Yi, chief analyst of iiMedia Consulting, said, "For an established game company like Perfect World, launching a replica of a similar game can make use of the existing brand influence and market recognition on the one hand, and on the other hand, it can also attract specific user groups, especially players who are interested in love simulation games." This type of reproduction has its positive significance for Perfect World and may lead to an increase in performance. ”

"In the face of the impact of intensive release of game titles, Perfect World needs to adopt diversified strategies to cope with the competition and changes in the market." Zhang Yi also said.

According to Zhang Shule's analysis, Perfect World is a company that likes to do concepts very much, especially in cross-borders, such as film and game linkage and games going overseas, which were proposed as early as more than ten years ago and became famous, but the problem is that it has too many ideas and insufficient practical ability.

"Stories like the movie and game linkage have been told for more than ten years, but there is no first story like "Finished! I'm Surrounded by Beautiful Girls"; As for the game going overseas, it is satisfied with the sub-developed game regions of Southeast Asia, which is completely different from the current pattern of global competition between game manufacturers in Europe, America and Japan. Zhang Shule further said that the concept stays on paper after all, making the perfect world become an imperfect world of paintings.

Zhang Shule believes that the only way to re-establish Perfect World is to rely on new games, not old ones, increase technical investment in game research and development, and create high-quality games.

Editor-in-charge: Huang Xingli Editor-in-chief: Han Feng

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