Interim Report 2023

IGG Inc. navigated a transitional period during the first half of 2023, characterized by a strategic pivot toward new game titles and operational efficiency. The company generated HK$2.5 billion in revenue, maintaining stability through its flagship title, Lords Mobile, while successfully scaling newer offerings such as Doomsday: Last Survivors and Viking Rise. Despite recording a net loss of HK$359.8 million for the period—largely driven by an 85% increase in marketing expenditure to support these launches—the company achieved a return to profitability by June 2023. This recovery was supported by a 30% reduction in operating expenses, facilitated by the integration of artificial intelligence into development workflows.

The company’s financial health remains anchored by a cash balance of HK$1.48 billion, though the gearing ratio rose to 34.6% as of June 30, 2023. Management continues to utilize various share-based incentive programs to retain talent, despite the termination of older share option schemes and the lapsing of over 14 million performance-based shares. Governance remains centralized, with the Board maintaining a combined chairman and CEO role to ensure strategic agility. Furthermore, the company continues to utilize structured contracts to operate within the People’s Republic of China, asserting that these arrangements are compliant with current regulations and represent a negligible portion of total assets and revenue, thereby minimizing exposure to potential shifts in foreign investment laws.

Looking forward, the company is focused on balancing aggressive market expansion with disciplined capital management. While impairment losses on joint ventures and unrealized losses on unquoted equity securities impacted the bottom line, the reduction in administrative and research costs suggests a leaner operational structure. By prioritizing the growth of its new game portfolio and leveraging technological efficiencies, the company aims to sustain the profitability achieved in the latter half of the reporting period while maintaining a stable, compliant corporate framework.