According to some Chinese media outlets that quote anonymous sources, Huya and Douyu, leading game livestreaming platforms in China, are implementing internal layoffs. According to the sources, Huya’s overseas business – Nimo TV intends to cease operations in regions like Brazil and some other areas, which will result in layoffs of employees. Douyu is reported to cut 30 percent of its employees that mainly focus on game business development and streamer agents.
Both companies have responded to relevant news. A Huya spokesperson responded by saying that “given the changing market conditions, Nimo TV has made some strategic adjustments and optimizations for business, and will allocate resources to key regions in the future,” according to a report by Reuters on Monday. On the other hand, Douyu said that it is not currently conducting large-scale layoffs but making normal personnel adjustments to optimize resources.
As the two leading game live streaming companies in China, they financial performance varies. According to the latest financial results of 2021Q4, Huya’s net income for 2021 stood at 583 million yuan; Douyu has recorded net loss for the full year of 2021, at 620.2 million yuan.
In the second and third quarters of 2021, Huya‘s overseas revenue increased by over 200%, and its overseas MAU reached 30 million. Although NIMO TV ranks leading position in some markets such as in Brazil, the product’s team has not been spared in this wave of layoffs, according to some reports.
Previously, the team of Douyu in Shenzhen, which is mainly engaged in overseas business, was also reported to be implementing mass layoffs. Innovative segments such as overseas business, cloud games and new games are all deemed to be money-burning projects. When the market becomes saturated, companies are likely to reduce these teams one after another.
In the game livestreaming industry, which is highly dependent on tipping from users, the contribution rate of livestreaming revenue to total revenue is as high as 90%. According to data by Changer Index, the proportion of paid users in China’s live video industry is expected to be 11% in 2022, an increase of only 0.3% from the previous year. Although the market scale is expanding, the growth trend of paid users has obviously slowed down since 2020.
Moreover, policy supervision of livestreaming rewards is also being strengthened. On March 30 2022, CAC, SAMR and the State Taxation Administration (STA) jointly issued “Opinions on Further Regulating the Profit-Making Behaviours of Internet Live-Streaming and Promoting the Healthy Development of the Industry”, in an effort to build a long-term mechanism for cross-departmental collaborative supervision, strengthen the normative guidance of online live streaming profit-making behavior, encourage and support the legal and compliant operation of online live streaming, and promote the development of the online live streaming industry in a standardized manner.