Aug. 15 – Mobile game developer and publisher CMGE China Handy released a profit warning announcement on the Hong Kong Stock Exchange today, saying that CMGE expects to record a net loss of no more than RMB 60 million for the first half of 2022, compared to a net profit of RMB 378.3 million for the same period last year.
The announcement shows that there are two main factors for the decline of CAG’s performance as follows.
Revenue in the first half of 2022 decreased by approximately 42% to 45% as compared to the first half of 2021, mainly due to the delay in obtaining the license number for a number of games scheduled to launch in the first half of 2022 and the decrease in revenue generated from certain games that have entered the later stage of their life cycle.
Research and development expenses increased by approximately 60% to 80% in the first half of 2022 as compared to the first half of 2021, mainly due to the increase in the Group’s research and development expenses for new game projects.
China Handspring Group said that although its operating results declined in the first half of 2022, it will improve in the second half of the year through continued resource integration, cost reduction and efficiency improvement, as well as through the license number that China Handspring Group recently obtained to publish new games.
China Handy said on August 5 that China Handy reached IP licensing cooperation with Universal Pictures and Dreamworks Animation to adapt hand games, and will develop and launch Dreamworks Animation’s first IP all-star hand game “Dreamworks Alliance” globally.
In addition, China Handspring’s self-developed fighting game “All-Star Battle” will be launched in China in late October, and the game has been authorized by SNK.
