As the performance of the game 'Three Kingdoms: Strategy Edition' continues to strengthen, Alibaba's games department has also embarked on an upward path within the group.
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The Interactive Entertainment Division (灵犀互娱), which is affiliated to Alibaba's game business, will be upgraded into an independent business group, parallel to the Entertainment department. At the same time, Yu Yongfu, chairman of the AutoNavi Group, will soon be in charge of Alibaba's game business. He is also the former helm of Alibaba's Mobile Entertainment department.
The game business accounts for almost 25% of the total revenue of the entertainment group by one game. Alibaba Group's financial report for the first quarter of the fiscal year 2021 (as of the end of June 2020) shows that the revenue of the digital media and entertainment business is CNY 6.99 billion.
Starting from the first quarter of 2021, game business revenue will no longer be included in the innovation business, but in the digital media and entertainment business. After the adjustment, Alibaba's innovative business revenue decreased by CNY 1.19 billion from the previous quarter, while the digital media and entertainment business revenue increased by CNY 1.05 billion. The adjusted EBIT of the digital media and entertainment business narrowed significantly to 19% from 57% in the previous quarter.
According to Sensor Tower, as of August 2020, the monthly revenue of 'Three Kingdoms: Strategic Edition' was CNY 600 million, making it the third-highest game in China. "The actual significance of this game is not income, but an assertion or self-certification of the independent research ability of Alibaba Games, which will greatly improve the overall morale," said a person close to Tencent Games.