IGG Inc. reported a 9% year-over-year revenue decline to $354.7 million and a 28% drop in net profit to $70.7 million for the first half of 2019, driven by the maturation of flagship titles Lords Mobile and Castle Clash.
See it on page 6R&D investment increased by 48% to $42.9 million to support the launch of new titles like Brave Conquest and Craft Legend as the company attempts to offset the lifecycle stabilization of existing products.
See it on page 7Lords Mobile remains the company's primary asset, maintaining over 240 million registered users and consistent monthly gross billings exceeding $50 million.
See it on page 7The company maintains a strong financial foundation with a 69% gross profit margin and a net asset position of $320.5 million, despite a significant reduction in net cash from operating activities to $46.1 million.
See it on page 11Asia remains the company's dominant market, contributing $153.7 million in revenue during the first half of 2019.
See it on page 8The company is expanding its global footprint, highlighted by a $22.9 million property acquisition in Italy to establish a new European hub.
See it on page 71Management identified potential regulatory risks associated with the VIE structure used to consolidate Fuzhou Tianmeng, which accounted for approximately 10.3% of total revenue.
See it on page 37During the first half of 2019, the global gaming market experienced a period of transition characterized by the natural stabilization of long-standing flagship titles. Revenue reached $354.7 million, representing a 9% year-over-year decline, while net profit fell 28% to $70.7 million. This contraction was primarily driven by the maturation of Lords Mobile and Castle Clash. Despite these trends, Lords Mobile maintained a robust performance with over 240 million registered users and consistent monthly gross billing exceeding $50 million. Asia remained the primary revenue driver, contributing $153.7 million to the total.
To counter the lifecycle stabilization of existing products, strategic focus shifted toward aggressive research and development and geographic diversification. R&D investment rose 48% to $42.9 million to support the launch of new titles such as Brave Conquest and Craft Legend. Expansion efforts were further evidenced by a $22.9 million property acquisition in Italy to establish a European hub. Financially, the company maintained a strong 69% gross profit margin and a healthy net asset position of $320.5 million, though net cash from operating activities saw a significant reduction to $46.1 million.
The corporate structure remains heavily reliant on "Structured Contracts" to consolidate the financial results of Fuzhou Tianmeng, a domestic Chinese entity holding essential operating licenses. While this VIE structure contributed approximately 10.3% of total revenue, management noted potential risks regarding evolving Chinese foreign investment laws. Governance during this period was marked by active capital management, including a share buyback program and the adoption of IFRS 16, which modernized the accounting treatment of leases and right-of-use assets. Despite the dip in interim profits, the board signaled continued shareholder confidence by declaring an interim dividend of HK13.0 cents per share.
