Perfect World, the Chinese gaming giant behind popular titles like Persona 5: The Phantom X and One Punch Man: World, is undergoing significant leadership changes. Following substantial layoffs affecting over a thousand employees and underwhelming financial results, CEO Xiao Hong and co-CEO Lu Xiaoyin have resigned, according to a Game Gyroscope report on the Chinese WeChat platform. However, reports suggest they will remain on the board as directors.
Gu Liming, a long-serving Perfect World executive and former Senior Vice President, has been appointed as the new CEO. This leadership transition signals a strategic shift and a potential company-wide restructuring effort. The coming months will be crucial in observing the new CEO's strategic direction.
Perfect World's Recent Challenges
The company's recent performance has been marked by significant setbacks. Widespread layoffs represent a considerable blow. Revenue from existing games has declined, with even the highly anticipated One Punch Man: World underperforming in international beta testing and remaining stagnant since April without updates on major app stores.
Perfect World anticipates substantial financial losses in the first half of 2024, projecting a net loss of 160-200 million yuan, a sharp contrast to the 379 million yuan profit reported last year. The gaming division is expected to bear the brunt of these losses, with a projected net loss of 140-180 million yuan. Further compounding the situation, the middle office team has been significantly reduced in size.
Despite these challenges, there are glimmers of hope. The upcoming update for Tower of Fantasy, Hotta Studio's open-world gacha RPG, aims to reinvigorate player engagement and potentially improve financial performance. The release of version 4.2 on August 6th, 2024, is anticipated to provide a much-needed boost.
The newly announced game, Neverness to Everness, has generated considerable pre-registration numbers, reaching nearly three million worldwide within a week. While revenue generation from this urban-themed open-world RPG is not expected until at least 2025, the early interest is encouraging.
The success of Perfect World's turnaround hinges on the new management team's ability to navigate these challenges. The coming months will be critical as they focus on strategic initiatives, operational efficiency, and financial recovery.
For more gaming news, see our coverage of Wang Yue, the open-world ARPG nearing its testing phase.
