DLK Advisory Limited
Newborn Town Gains over 20% YoY Rise in Revenue of Social Networking Business for Q3 2023

Newborn Town Gains over 20% YoY Rise in Revenue of Social Networking Business for Q3 2023

Newborn Town Inc. (‘Newborn Town’; 9911. HK) announced its operating data for Q1-Q3 2023 on 20 October. During the first three quarters, the tech company has made good progress in social networking business and innovative business.

According to the announcement, Newborn Town’s social networking business recorded a revenue of approximately RMB2,020 million to RMB2,060 million (including BlueCity’s revenue in Aug & Sept) for the nine months ended 30 September 2023.

Notably, the consolidation of LGBTQ-related business in August has also driven Newborn Town’s social networking business segment to grow by over 20% year-on-year in the third quarter.

Meanwhile, as the quality game-related innovative business ramped up smoothly, its revenue reached about RMB 240 million to 260 million during the period, a YoY increase of approximately 50.6% to 63.2%.

Specifically, for the social entertainment business (whose performance was incorporated in the social networking business), Newborn Town has completed the adjustment of its content ecosystem in the first half. Therefore, the content quality, stickiness in the online community and users’ interactive experience have all upgraded. Besides, the strategy of ‘product replication’ has been proven again following the increasing commercial contributions from new products to the businesses.

In the newly-released list by data.ai, Newborn Town’s three flagship apps YoHo, MICO, and SUGO were within the top 30 Chinese non-game publishers in terms of overseas revenue in September.

SUGO, the companion-based social app recently going into official operation, has also achieved progress in the major markets of the world. Through the optimization of matching and recommendation efficiencies and improvement of the refined operations, the revenue growth rate of SUGO was remarkable among overseas competitors. It entered the list of the top 30 Chinese non-game publishers regarding overseas revenue for June, August, and September by data.ai.

Regarding the company’s latest social networking business for LGBTQ+ community, significant achievements were seen during this period.

Blued, the major social app of BlueCity, has upgraded its capabilities in overseas operations through continuous optimization in customer acquisition, monetization scenes and localized operations. This segment has been incorporated into Newborn Town’s disclosed operating data for the first time.

Apart from the steady growth in the social networking business, Newborn Town also sees an upward breakthrough in the quality game-centric innovative business, which is becoming the company’s second growth engine.

In the third quarter, ‘Mergeland-Alice’s Adventure’, the mobile merge game developed by Newborn Town, entered the two lists released by the mobile data analysis platform Sensor Tower. It achieved the 17th and 30th place in the revenue and download rankings of Chinese mobile games in overseas markets for August. And it’s also the first time this game has been on the two lists.

According to Sensor Tower, ‘Mergeland-Alice’s Adventure’ had a surge of 149% and 902% in revenue and downloads in August respectively, following its gameplay-based innovation and advertising campaigns. The previous data revealed that the monthly revenue of this game has achieved over US$2 million since April 2023.

Apart from the substantial increase in flagship games, Newborn Town also took a crack at rolling out more self-developed games. In the first half of 2023, the newly-launched games Taylor’s Secret, Merge Cove and Sudoku grabbed the eyes of the public, with Sudoku ranking 3rd on the list of the US casual games for June by data.ai.

“Over the past three quarters this year, Newborn Town has constantly stretched its footprints in multiple markets and received positive feedback. Moving forward, Newborn Town will go on digging deep into these segments and achieve more solid growth in financial performance,” said Li Ping, the CEO of Newborn Town.