China’s second largest game streaming platform Douyu saw both revenue and profit drop in the third quarter this year, turning a loss, according to its latest financial results released on Tuesday.
Total revenues and gross profits were RMB 2.3 billion (USD 364.4 million) and RMB 278.5 million (USD 43.2 million), respectively, during the quarter ended in October 2021. Both witnessed a slight drop compared with the same period last year.
Douyu racked up net losses to the tune of RMB 143.5 million (USD 22.3 million) in Q3, a reversal from a net income of RMB 59.6 million in Q3 2020.
The sluggish growth was due to steep drops in livestreaming revenue caused by the shrinkage of paying users, the company said in its earnings report.
Douyu’s monthly active users in Q3 increased by 3.9% YoY to 61.9 million from 59.6 million. Paying users witnessed an 8% YoY drop to 7.2 million from 7.9 million.
The video game industry entered a regulatory winter after the government capped a weekly playtime at three hours for minors in August. The new games approval process has also slowed down since July, and major video game companies have already felt the brunt.
Douyu’s major rival Huya, which holds the largest market share in China’s game streaming sector, managed an uptick in revenue, according to its Q3 financial report released last week.
A Tencent-led merger of Huya and Douyu was blocked by regulators in July amid an antitrust campaign against internet companies. Tencent rebooted its game streaming business in the following month to maintain its market position.