SHANGHAI, Nov. 9, 2021 /PRNewswire/ -- As Chinese game
developers rush to compete overseas, CooTek (Cayman) Inc. (NYSE:
CTK) ("CooTek" or the "Company") has chosen to focus on the simple
and fast casual games, thus avoiding a head-to-head competition
with the established companies.
Investing in mobile games is an important attempt made by CooTek
while pursuing its entertainment content strategy. Starting off as
an intelligent mobile keyboard application developer, CooTek has
shifted its focus to building a content ecology based on mobile
games, online literature and multi-scenario content after its IPO
on NYSE in 2018. Nowadays, content-based products have become
CooTek's main source of revenue.
The company's financial data have shown that its mobile
advertising revenue mainly comes from mobile games and online
literature. In the second quarter of 2021, 37% of the revenue came
from online literature, while the mobile game business contributed
55%. According to Mr. Lu, Head of Overseas Game Business of CooTek,
the company has started exploring the overseas game industry since
the second half of 2019. The casual game industry has a high
short-term return on investment, which can greatly improve the cash
flow of the company.
In the second quarter of 2021, CooTek launched the hyper-casual
game, Catwalk Beauty, which subsequently topped the App Store and
Google Play game charts in 58 countries and regions, including the
US. In the first 3 months, the game churned out nearly $3 million in gross profit, generating an overall
return on investment of over 200%. The hit game Catwalk Beauty
developed by Smillage topped the GP charts of 26 countries since it
was launched, creating substantial revenue to CooTek this year. And
in the third quarter of this year, Truth Runner, another parkour
game following the lead of Catwalk Beauty. A week into its debut,
Truth Runner topped the U.S. IOS game charts.
CooTek's mobile game business revenue grew 25% QoQ in the second
quarter of 2021. Such a strong improvement in profitability should
be attributed to the optimized In-App Advertisement (IAA)
model.
IAA model is a profit model mainly adopted by hyper-casual
games. Compared to the In-App Purchasing (IAP) model, IAA is a
simple, fast yet short-lived mechanism that relies on ad profits.
The profitability of the IAA model is heavily dependent on user
acquisition, either from internal sources or other platforms.
"The threshold of producing hyper-casual games is not high.
Among the mass production, only when the conversion rate reaches a
certain level and the cost per install (CPI) is low enough, for
example, $0.2-0.3 per installation,
that we can consider it a feasible idea and put it into action," Lu
explained.
Take Catwalk Beauty as an example, during the testing period,
the CooTek team turned the "catwalk" idea into a demo for trial.
The results showed that the conversion rate of the demo was very
high and stable. The team then completed the development of the
game within a few weeks. "There were about 20 core themes of the
game, and the team was able to deliver one every day. So that's why
we were able to launch it so quickly."
Meanwhile, CooTek is designing its own ad placement system. "We
have been closely working with some developers, which means that
our team members are actively involved in their projects, as well
as the designing of a standardized process and platform." Lu
said.
About CooTek (Cayman) Inc.
CooTek is a mobile internet company with a global vision that
offers content-rich mobile applications, focusing on three
categories: online literature, scenario-based content apps and
mobile games. CooTek's mission is to empower everyone to enjoy
relevant content seamlessly. CooTek's user-centric and data-driven
approach has enabled it to release appealing products to capture
mobile internet users' ever-evolving content needs and helps it
rapidly attract targeted users.
For more information on CooTek, please visit
https://ir.cootek.com.
For investor enquiries, please contact:
CooTek (Cayman) Inc.
Mr. Robert Yi Cui
Email: ir@cootek.com
ICA Investor Relations (Asia) Limited
Mr. Kevin Yang
Phone: +86-21-8028-6033
E-mail: cootek@icaasia.com
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SOURCE CooTek (Cayman) Inc.