NetEase (NTES) will announce its first quarter results for calendar 2021 on May 18th. NetEase is the #2 games company in China and was one of the only companies to report growth across both PC and mobile games in 2020. NetEase titles continued to perform well in Q1 2021 based on data from Niko’s China Games Streaming Tracker and our market insights. The China Games Streaming Tracker is a tool Niko developed to track games on the largest game livestreaming platforms in China: Huya, DouYu and Bilibili. We track these three platforms daily and capture metrics for games and streamers, producing rankings in six categories: Hours, Streamers, Tips, Subscribers, Heat Index and Niko Index, which is our approximation of viewers.
NetEase generates 88.9% of its revenue from self-developed games, including key franchises such as Fantasy Westward Journey, Onmyoji and Justice. The Fantasy Westward Journey franchise continued to remain strong in Q1 2021, across both PC and mobile. The smartphone title was the #3 highest grossing mobile game on iOS in Q1 and on PC the title ranked #27 on Niko’s China Games Streaming Tracker by gameplay hours streamed, up one place from the prior quarter. Onmyoji was the #9 highest grossing mobile game on iOS during Q1 2021, with revenue increasing 32% QoQ according to Sensor Tower. Onmyoji was the #11 mobile game in our streaming tracker by hours streamed and the total number of cumulative viewers across all streams was 65.78 million, up 16.5% QoQ. NetEase launched Revelation Online Mobile during the quarter, which was highly anticipated by fans of the original PC game. The game was the #12 highest grossing title on iOS in China during the quarter and was the 13th most streamed NetEase title on our streaming tracker.
Regarding licensed games (with ISBN), World of Warcraft, Overwatch and Minecraft were strong in Q1. World of Warcraft was the #3 PC game on our Streaming Tracker with 2.27 million hours streamed during Q1 2021, up 15.2% QoQ. Total tips that WoW streamers earned increased 3.6% QoQ to $8.36 million. Overwatch was the #8 PC game on our streaming tracker during Q1 2021, with total streamed hours up 25.4% QoQ. Despite the increase in gameplay hours streamed, the number of viewers remained flat QoQ. Minecraft, which has surpassed 400 million registered users in China on PC and mobile, was the #3 most streamed NetEase title in Q1 2021. NetEase also launched Yu-Gi-Oh! DUEL LINKS for mobile in Mainland China during the quarter, which is licensed from Konami. It was the #12 most streamed NetEase title in Q1.
One game that we want to call attention to is Naraka: Bladepoint, which is developed by NetEase subsidiary 24 Entertainment. It is a 60-player fantasy action battle royale with a focus on melee combat and grappling hook-powered movement. The game was featured at a number of notable game events and showcases over the past year, which has helped it obtain a following prior to launch. The game beta tested in mainland China between March 31 and April 13 with positive results. The popularity can partially be attributed to well-known streamers such as PDD playing the game. A global beta test was held at the end of April and the title reached 140k peak concurrent users on Steam. The game entered the top 20 in our Streaming Tracker. We note that the title already has a license to launch in China and we expect it to drive growth in the battle royale segment on PC when it launches this summer.
NetEase’s greatest strength is its self-development capabilities, and we are bullish that Naraka: Bladepoint and other self-developed titles will perform well this year. Diablo Immortal, which is developed by NetEase and based on the popular PC IP from Blizzard, has received am ISBN, and is set to release later this year. The game has received positive feedback in recent beta tests, in contrast to the negative reaction it received on reveal. NetEase is also investing heavily in competitive casual games on mobile, such as Eggy Party and Onmyoji: 100 Ghosts, that aim to bring key social gaming experiences to the space. The first title aims to innovate on a Fall Guys type of experience while the latter is NetEase’s take on Among Us within the Onmyoji universe. NetEase will reveal more information on new titles at its annual 520 product conference on May 20th. We note that the conference will be broadcast in English and Japanese for the first time, reaffirming its growing commitment to becoming a global games publisher.