NetEase posts $4b Q1 revenue as gaming drives 7.4% growth

NetEase reported a revenue increase of 7.4% year-on-year, totaling 28.8 billion yuan (US$4 billion) for the first quarter of 2025.

The net profit attributable to shareholders reached 11.2 billion yuan (US$1.5 billion) on a non-GAAP basis. Research and development expenses amounted to 4.4 billion yuan (US$606 million), representing 15% of total revenue.

Gaming was the main contributor to growth. Revenue from games and related services rose 12.1% year-on-year to 24 billion yuan (US$3.3 billion), which accounted for 83% of total revenue. New releases such as “Marvel Rivals” and “Where Winds Meet” topped global sales charts on platforms like Steam. The mobile game “Once Human” ranked highly in iOS downloads across over 160 regions.

The return of Blizzard titles, including “World of Warcraft,” “Hearthstone,” and “Overwatch,” increased user engagement in the Chinese market. Additionally, Diablo III resumed technical testing in April as part of Blizzard’s efforts to re-enter China.

Outside of gaming, some segments faced challenges. Subsidiary Youdao reported a revenue decline of 6.7% year-on-year to 1.3 billion yuan (US$179 million). Cloud Music revenue fell by 8.4% to 1.9 billion yuan (US$256 million). The innovation and other business segment, which includes the e-commerce platform Yanxuan, decreased by 17.6% to 1.6 billion yuan (US$224 million).

The company announced a Q1 dividend of US$0.135 per share, which will be payable in June. As of March 31, NetEase’s net cash balance was 137 billion yuan (US$18.9 billion).

🔗 Source: NetEase

🧠 Food for thought

1️⃣ NetEase’s global expansion strategy pays dividends amid industry shifts

NetEase’s first quarter results demonstrate the success of its international gaming strategy, with newly launched titles making significant global impact beyond China’s borders.

The company’s games Marvel Rivals and Where Winds Meet topped Steam’s global bestseller charts shortly after release, while mobile game Once Human dominated iOS download rankings in over 160 regions worldwide 1.

This global push aligns with broader industry trends, as Chinese gaming exports have surged, with mobile publishers now capturing 47% of the global market 2.

NetEase’s renewed partnership with Blizzard is also strengthening its domestic position, with World of Warcraft, Hearthstone, and Overwatch returning to mainland China with localized events, and Diablo III resuming technical testing in April 1.

The company’s balancing of international expansion with domestic market cultivation has helped drive its 12.1% year-on-year gaming revenue increase to 24 billion yuan ($3.3 billion), despite ongoing regulatory complexity in the Chinese market 1.

2️⃣ Gaming segment resilience offsets diversification challenges

NetEase’s Q1 2025 results reveal a critical business pattern: while the company has pursued diversification, its core gaming business remains the primary growth driver and financial anchor.