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After falling into the layoff crisis, Perfect World (sz002624, stock price 7.49 yuan, market value 14.53 billion yuan) This long-established leading gaming company saw two CEOs resign on the same day.
html On July 22, Perfect World announced that due to adjustments in work arrangements, Xiao Hong and Lu Xiaoyin resigned from the company's CEO and co-CEO positions respectively. After their resignations, they continued to work in the company and served as company directors; the company's new The CEO is Gu Liming.Image source: Announcement screenshot
As of the date of the announcement, Xiao Hong held approximately 284,000 shares of the company and Lu Xiaoyin held approximately 63,600 shares of the company.
Regarding this management adjustment, Perfect World responded to the reporter of "Daily Economic News" and stated that everything will be subject to the announcement. A reporter from "Daily Economic News" also sent Xiao Hong himself on WeChat to learn more details, but had not received a reply as of press time.
"It's not surprising at all. To some extent, (this) is also a sign that the perfect world wants to change." Li Ming (pseudonym), an industrial investor who has been deeply involved in the game industry for many years, told a reporter from the "Daily Economic News" During the interview, he admitted that it has long been a consensus in the game industry to allow young people to take the stage and take the helm of the company.
The "involution" of the gaming world is intensifying. This summer, major companies such as Tencent, NetEase, and MiHoYo have launched big moves. The highly anticipated "domestic 3A masterpiece" " Black Myth: Wukong " has set off a wave of craze. A game company executive lamented: "Now it is no longer just any company that can come to the table. The number of manufacturers that can participate in this competition is very limited."
Behind this major personnel adjustment and a series of "changes", can Perfect World Ushering in a "turnaround" in performance? Can this veteran game manufacturer regain its glory in the future amid fierce industry competition?
The two CEOs resigned on the same day, both of them are “veterans” of Perfect World
Anyone familiar with Perfect World knows that Xiao Hong and Lu Xiaoyin are both “veterans” of Perfect World. One of them joined Perfect World in 2008, and the other Joined in 2004, and has been deeply involved in and witnessed the development of Perfect World, especially in the field of games.
“This personnel adjustment may reflect Perfect World’s desire to promote strategic transformation and business upgrades by adjusting senior personnel. On the other hand, the company may also be looking for leaders with more innovative capabilities and market insights to lead the company into a new direction. "The development stage." Gao Dongxu, founder and chief analyst of China Entertainment Think Tank, told the "Daily Economic News" reporter that Perfect World may increase investment in core business areas such as games and film and television, while optimizing internal management and resource allocation to improve performance. The company's competitiveness and profitability.
Prior to this resignation announcement, Xiao Hong, 58, had been with Perfect World for 16 years.
During Xiao Hong’s tenure as CEO, Perfect World introduced the world’s top e-sports event “2019 Dota2 International Invitation (ti9)” to Shanghai. This was the first time that the world’s top e-sports event came to Asia and China. , attracted nearly 40,000 domestic and foreign live audiences and more than 620 million online viewers. In addition, Xiao Hong also promoted Perfect World's globalization strategy, exported its game products to more than 100 countries and regions,and established 20 branches overseas. As a leading established game manufacturer,
’s game business has always been the “cash cow” of Perfect World, accounting for over 80% of total revenue. At the beginning of this year, Xiao Hong said in an interview with the media: "The domestic game industry will show trends such as globalization, technology and pan-entertainment, and the company has made relevant arrangements."
"Daily Economic News" reporter found out , among the top three annual total salaries of directors, supervisors and senior executives of A-share game companies from 2020 to 2022, Perfect World is on the list.Among them, the total pre-tax remuneration received by Perfect World Chairman Chi Yufeng, Director and CEO Xiao Hong, Director, Co-CEO and President Lu Xiaoyin from the company in 2022 is 7.15 million yuan, 7.12 million yuan and 7.17 million yuan respectively. Ten thousand yuan; in 2023, the pre-tax remuneration of the above three people will drop to more than 4 million yuan.
Image source: Screenshots of Perfect World's 2022 financial report and 2023 financial report
Who will pay for layoffs, losses, and stock price drops?
With changes in the external environment, Xiao Honghe and Perfect World have also faced many challenges in the past few years.
On the one hand, the gaming, film and television industries that the company focuses on have undergone tremendous changes, and are facing new changes in the post-epidemic era and the AIGC technology wave; on the other hand, in the face of fierce industry competition, Perfect World’s old products are facing life It is difficult for new products to hit the market due to the cycle, and performance is obviously under pressure.
In the performance forecast for the first half of 2024, Perfect World is expected to turn from profit in the same period last year to a loss, with a loss of 160 million to 200 million yuan. Perfect World stated that the main reasons for the change in performance include the decline in game business, product layout adjustments due to market changes, and the market performance of new games that did not meet expectations.
If the timeline is extended, from 2021 to 2023, Perfect World’s revenue will be 8.518 billion yuan, 7.67 billion yuan, and 7.791 billion yuan respectively; the net profit attributable to the parent company will be 369 million yuan, 1.377 billion yuan, and 491 million yuan respectively. , among which the net profit attributable to the parent company will decline significantly in 2023, down 64.31% year-on-year.
While performance is under pressure, the company's total number of employees is also continuing to decline. The financial report shows that from 2021 to 2023, the number of active employees of Perfect World will be 6,272, 6,061 and 5,754 respectively.
Capital Market also gave feedback. Compared with historical highs, the company's stock price has fallen a lot.
When asked whether Xiao Hong should pay for the layoffs, losses and other internal and external reasons that Perfect World has faced in recent years, Gao Dongxu believed that this needs to be viewed objectively. As CEO, Xiao Hong needs to assume certain management responsibilities, but the company's operating conditions are affected by many factors. It is unfair to blame all the company's losses and layoffs on Xiao Hong.
"As an older generation game company, the dividends we received from the PC gaming era (Perfect World) should end today." Li Ming told the "Daily Economic News" reporter that Perfect World needs new stories.
Li Ming said frankly that the current competition in domestic top games has reached an exaggerated level, and the way to measure or initially screen the status of each company is very simple: What new products are there? "Only those with cards in their hands have a chance to play, but this is just an opportunity. Many companies don't even have cards. What can they do even if they are A-share listed companies? In the mobile era, Perfect World has not kept up, and now it has to compete in the new It’s even more difficult to break out of the current situation,” Li Ming said.
Gu Liming "stepped into danger". Former e-sports business president
Can Gu Liming recreate "perfection"? To a certain extent, in the face of layoffs and losses in today’s perfect world, Gu Liming can be described as “taking orders at the last moment”.
Judging from the resume, Gu Liming is a Canadian national, born in 1968, with a master's degree. He has previously worked in China Telecom, General Electric (USA) Information Services, Microsoft, etc.; Gu Liming joined Perfect World in 2013 and has been with him since. He has successively served as Vice President, Senior Vice President and President of E-Sports Business of Perfect World.
Regarding the next strategic focus, Perfect World reiterated in its performance forecast for the first half of 2024: "The company will firmly focus on the dual-line business layout of 'mmo+' (massive multiplayer online massively multiplayer online game) and 'card+' , continuing the advantages of mmo classic categories. "
mmo is indeed the current specialty of Perfect World. The reporter found that the summary of the 2023 annual report shows that the mmorpg "Perfect World" released in 2005 still accounts for half of Perfect World's sales. In addition, since the "Zhu Xian" mobile game was launched in August 2016, the global cumulative revenue has exceeded 9 billion yuan. "Phantom Tower" launched by Perfect World in December 2021 and "Persona: Phantom of the Night" launched in April 2023 can also be seen that Perfect World is focusing on "mmo+x" and "card+x". Big core track.
However, Perfect World has not achieved the expected performance in its continuous innovation and transformation.
At the end of June this year, in response to investors’ questions about “very low game output,” Perfect World responded on the investor interactive platform: “In recent years, the company’s game business has been in a transitional stage of transformation, upgrading, and exploration and innovation. The average game industry R&D investment and development cycles are also continuing to increase, and the company’s early R&D investment has not yet been fully reflected in game output.”
Many industry insiders expressed a wait-and-see attitude towards Gu Liming’s appointment.
Internet analyst Ding Daoshi said in an interview with a reporter from "Daily Economic News" on WeChat that Perfect World, once a gaming company in the first camp in the PC era, has fallen behind after entering the mobile Internet era. Currently, it mainly eats food. A state of "old school". He believes that for companies like Perfect World, what they need most right now may be the emergence of blockbuster hits like " Genshin Impact " and "Black Myth: Wukong" that bring surprises to the Chinese game industry, and its difficulty It is also self-evident.
iiMedia Consulting Chief Analyst Zhang Yi believes that from the current situation of the perfect world, there are actually problems at three levels: First, there are problems in the incentive system and management of the entire enterprise, which prevents talents from exerting themselves or creating higher value; secondly, the money-making products that have been relied upon for survival and development in the past are facing life cycle problems, and new products have difficulty keeping up; and finally, there is a lack of innovation.
Zhang Yi pointed out that in the past two decades on the mobile Internet, games have undergone earth-shaking changes in terms of subject matter, gameplay, and production costs. Perfect World was previously a beneficiary of the first wave of mobile Internet dividends. But with the popularity of the second dimension, the wave of overseas expansion, AI intelligence, etc., has Perfect World seized the opportunity? "At present, I'm afraid there is no such thing."
is brewing a hot product and a small game to test the waters? Perfect World needs a tough battle
In fact, the management changes of Perfect World may have been foreshadowed.
At the end of 2023, in order to implement flatter management of game projects, improve resource usage efficiency, and improve project output, Perfect World also made organizational structure adjustments and personnel adjustments. At that time, the company focused on promoting Tong Qing, a well-known game producer with the title of "Shopkeeper Tong" in the industry, to become the president of Perfect World Holdings Group.
This "shopkeeper Tong" has experience in projects such as "Dragon 3D" and "Zhu Xian" mobile games. Just recently, it was reported that Tong Qing went to Hangzhou to start an internal business and opened a publishing company, aiming at the current moment. The hot mini-game category has also taken away many of the headquarters’ technical mid-level players. Does this move indicate that Perfect World will also take mini-games as its direction of transformation?
Regarding matters related to Tong Qing’s internal re-entrepreneurship, a reporter from “Daily Economic News” asked Perfect World for verification, but as of the time of publication, no reply had been received.
Regarding the possible opportunities of Perfect World in the mini-game track, Ding Daoshi believes that there may be some opportunities in mini-games. In the era of fragmented mobile Internet games, if there are some products that can meet the needs of consumers in specific time scenarios , then you can achieve small steps and fast iterations, and at the same time have more opportunities for trial and error and experimentation. But in the context of giant companies dividing the big "cake" of games, it is still very difficult.
Another senior industry insider in the game field told reporters that it is actually a bit late for Perfect World to end now that the small game market is relatively mature. Reporters from
noticed that under the storm, Perfect World has made new moves and seems to be trying to prepare the next hit.
Image source: "Alien" Weibo official account released
On July 16, Hotta Studio, a studio owned by Perfect World that developed "Phantom Tower", released the game PV and real-machine demonstration of the new "Alien", which caused a stir as soon as it was announced Players’ attention and lively discussion.
Image source: Screenshot of station b
As of now, the official PV of "Alien" released on station b is over 17 minutes long, and the number of views has reached 7.2 million.At the same time, "Alien" opened reservations for PC, mobile, and console platforms on the day of its PV release. On July 23, the official Weibo account of "Alien" stated that the number of reservations on global platforms reached 2.8 million in the first week.
After the dazzling bombardment of the two-dimensional mobile games "Sing Tide" and "Zero Zero" this year, the emergence of "Alien" made players say "Are there any masters?" The rave reviews and high expectations on the Internet seemed to It also had a boosting effect on Perfect World's stock price in the capital market. On July 16, when the PV was released, the company's stock price closed up nearly 5%.
However, it is still unknown whether "Alien" can take up the important task and become the key to turning the situation around in the perfect world.
The capital market still seems to be cautious about the appointment of a new CEO. As of the close on July 23, Perfect World closed down 4.71%. What awaits Gu Liming and the Perfect World will undoubtedly be a tough battle.
Daily Economic News
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