Common-Size Income Statement
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Revenue Composition
- The share of product sales in net revenues demonstrated a consistent decline from 30.07% in 2018 to 21.81% in 2022, indicating a reduced reliance on direct product sales. Conversely, in-game, subscription, and other revenues showed an increasing trend, rising from 69.93% to 78.19% over the same period, which suggests a strategic shift toward recurring revenue models and digital content monetization.
- Cost of Revenues
- Product costs as a percentage of net revenues steadily decreased from -9.59% in 2018 to -6.89% in 2022, reflecting improved cost efficiency or lower product-related expenses. Software royalties and amortization costs exhibited some fluctuation but overall decreased from -4.95% in 2018 to -3.07% in 2022. Costs specifically associated with product sales decreased significantly from -14.53% to -9.96%. However, game operations and distribution costs increased notably, reaching -17.59% in 2022 after a period of relative stability, which may indicate higher operational expenditures or increased investment in distribution. Costs tied to in-game, subscription, and other revenues also increased to -19.55% in 2022 from prior years. Overall, the cost of revenues declined from -33.56% in 2018 to a low of -26.32% in 2021 before rising again to -29.52% in 2022, suggesting variability in operational cost management.
- Profitability
- Gross profit margins improved from 66.44% in 2018 to a peak of 73.68% in 2021, followed by a decrease to 70.48% in 2022. Operating income as a percentage of net revenues showed a similar pattern, increasing markedly from 26.51% in 2018 to 37.02% in 2021, then declining sharply to 22.18% in 2022. This indicates that while operational profitability peaked in 2021, it faced significant pressure in the subsequent year.
- Operating Expenses
- Product development expenses fluctuated, generally increasing and peaking at -18.88% in 2022, possibly reflecting higher investment in innovation or content creation. Sales and marketing expenses initially decreased to -11.64% in 2021 but rose substantially to -16.17% in 2022, indicating increased promotional spending. General and administrative expenses declined from -10.96% in 2018 to a low of -8.95% in 2021 before increasing sharply to -13.3% in 2022. Restructuring and related costs remained minor, with some volatility but negligible impact overall.
- Financial Income and Expenses
- Interest expense from debt remained relatively stable, fluctuating slightly around -1.2% to -1.87% of net revenues across the period. Interest income varied, showing an overall increase to 2.19% in 2022, which might reflect improved investment returns or higher cash balances. Gains and losses on equity investments and other income/losses were generally minor and inconsistent, with a slight positive net effect in 2022. The loss on extinguishment of debt appeared only sporadically and did not constitute a significant trend.
- Income Tax and Net Income
- Income before income tax expense followed the pattern of operating income, reaching a peak in 2021 and then declining in 2022. Income tax expense increased in relative terms from -0.85% in 2018 to approximately -5% in 2020 and 2021, then decreased to -3.07% in 2022, possibly reflecting changes in tax rates or benefit utilization. Net income as a percentage of net revenues increased steadily from 24.17% in 2018 to 30.66% in 2021 before dropping to 20.1% in 2022, indicating that profit margins were under pressure in the most recent year despite earlier gains.