Perfect World Names New CEO Amidst Restructuring

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 disappointing 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 transition signals a strategic shift for the company, aiming for a fresh start and a renewed direction. The new CEO's plans will be closely watched by industry analysts.

Perfect World's Recent Challenges

The company's recent performance has been marked by significant challenges. Widespread layoffs represent a considerable setback, coupled with declining revenue from existing games. Even One Punch Man: World, initially anticipated as a major success, underperformed in international beta testing and has remained stagnant since April, with no 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 stark contrast to the 379 million yuan profit reported last year. The gaming division is expected to 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 in size.

Despite these difficulties, there are potential glimmers of hope. The upcoming update for Tower of Fantasy, Hotta Studio's open-world gacha RPG, aims to reinvigorate player interest and potentially improve financial performance. Version 4.2 is slated for release on August 6, 2024.

Furthermore, the newly announced game, Neverness to Everness, has generated considerable pre-registration numbers. While revenue generation won't begin until its launch (not expected before 2025), the nearly three million pre-registrations worldwide in just a week indicate strong early interest in Perfect World's new urban-themed open-world RPG.

The success of Perfect World's turnaround hinges on the new management team's ability to navigate these challenges. The coming months will be crucial as the company focuses on key initiatives, streamlines operations, and works towards financial recovery.

For more gaming news, see our report on Wang Yue, the open-world ARPG nearing its testing phase.