Perfect World, the Chinese gaming giant behind popular titles like Persona 5: The Phantom X and One Punch Man: World, is undergoing a significant leadership change. 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 assumed the role of CEO. This transition signals a strategic shift for the company, aiming for a fresh start and a renewed direction. The new CEO's strategies will be closely watched.
Perfect World's Recent Challenges
The company's recent layoffs represent a major setback. Revenue from existing games has declined, and even the highly anticipated One Punch Man: World underperformed in international beta testing. The game has remained strangely inactive, with no updates on the App Store or Google Play since April.
Perfect World anticipates substantial financial losses in the first half of 2024, projecting a net loss of 160-200 million yuan compared to a profit of 379 million yuan the previous year. The gaming division will be hardest hit, with a projected net loss of 140-180 million yuan.
Further compounding the situation, the middle office team has been significantly reduced, from 150 employees to just a few dozen. While the situation is challenging, the upcoming update for Tower of Fantasy offers a glimmer of hope. Tower of Fantasy, Hotta Studio's ambitious open-world gacha RPG, has experienced fluctuating financial performance. Version 4.2, launching August 6, 2024, is expected to boost engagement and potentially alleviate financial pressures.
The recently announced game, Neverness to Everness, has generated considerable pre-registration interest. While revenue generation is still some time away (launch is not expected until 2025 at the earliest), the nearly three million pre-registrations worldwide in just one week indicate strong player anticipation.
The success of Perfect World's new management team in navigating these challenges remains to be seen. The coming months will be crucial as they implement key initiatives, streamline operations, and work towards financial recovery.
For more gaming news, see our coverage of Wang Yue, the open-world ARPG nearing its testing phase.
