Zheng Wei Chen

Zheng Wei Chen from Heji Capital asked about the specific impact of increasing the direct-to-consumer (DTC) payment mix for Gamehaus's flagship title from 10% to 30% on key metrics like user volume, ARPDAU, and overall profitability. Furthermore, Chen questioned the sustainability of the company's improved net margin given the relatively flat revenue guidance for the next quarter, seeking to understand the structural drivers that could continue to support profitability enhancements.

Answer

CEO Carl Cai Yimin stated that the most significant impact of increased DTC adoption is on profit margin due to reduced platform commissions. He clarified that DTC itself doesn't directly attract new users but accompanying operational measures enhance player loyalty and activity, indirectly boosting willingness to pay and supporting ARPDAU stability. Carl also mentioned plans to replicate the successful DTC strategy across other product lines. Shawn Zhang, Head of Capital Markets and Investor Relations, attributed the margin improvement to enhanced operational quality, efficient user acquisition, and an ROI-driven approach. He highlighted DTC mix increase as a strategic priority for future margin benefits and explained the flat revenue guidance by citing higher holiday season user acquisition costs and the expectation for new titles to drive revenue growth in subsequent quarters.

Zheng Wei Chen from Heji Capital asked about the specific impact of the increased Direct-to-Consumer (DTC) mix for the flagship title on key metrics like user volume, ARPU, and overall profitability. He also questioned the sustainability of the net margin improvement, given the relatively flat revenue guidance for the next quarter, and asked what structural drivers could continue to enhance profitability.

Answer

CEO Carl Cai Yimin clarified that the primary impact of increased DTC adoption is on profit margins by reducing platform commissions, while indirectly strengthening player loyalty and activity. He noted plans to expand the DTC strategy across other product lines. Head of Capital Markets and Investor Relations Shawn Zhang attributed the net margin improvement to more efficient user acquisition and an ROI-driven approach. He emphasized the strategic priority of increasing the DTC mix, expecting gradual margin benefits, and explained the flat revenue guidance by citing high holiday season user acquisition costs and future growth being tied to new game launches.