Hello, ladies and gentlemen. Thank you for standing by for the 1/3 1/4 2021 earnings conference call for HUYA Inc. At this time, all participants are in a listen-only mode. Today's conference call is being recorded. I'll now turn the call over to Ms. Hanyu Liu, Company Investor Relations. Please go ahead.
Hello, everyone, and welcome to HUYA 1/3 1/4 2021 earnings conference call. The company's financials and operating results were issued earlier today and are posted online. You can also view the earnings press release by visiting the IR website at ir.huya.com. A replay of the call will be available on the IR website in a few hours. Participants on today's call will be Mr. Rongjie Dong, Chief Executive Officer of HUYA, and Ms.
Ashley Wu, Vice President of Finance. Management will begin with the prepared remarks, and the call will conclude with a Q&A session. Before we continue, please note that today's discussion will contain Forward-Looking statements made under the safe harbor provision of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today.
Further information regarding this and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any Forward-Looking statements except as is required under applicable law.
Please also know that HUYA's earnings press release and this conference call include discussions of unaudited GAAP financial information, as well as unaudited Non-GAAP financial measures. HUYA's press release contains a reconciliation of the unaudited Non-GAAP measures to the unaudited, most directly comparable GAAP measures. I will now turn the call over to our CEO, Mr. Rongjie Dong. Please go ahead.
Hello, everyone. Thank you for joining our conference call today. In the 1/3 1/4 of 2021, we achieved solid results. Our mobile users reached record high levels, and we continued to steadily grow our top line. HUYA Live's mobile MAUs reached 85.1 million in the 1/3 1/4, up 15% Year-Over-Year, and 10% 1/4-over-1/4.
The strong user growth was mainly driven by our comprehensive content offerings, operational activities, and continued promotion efforts during the summer esports events. The next month retention rate for our HUYA Live app also remained stable at over 70%. As a technology-driven platform, we have been continuously focused on product and service upgrades to deliver more fun and immersive experience to our users.
In particular, we actively promoted the development and application of more interactive features in live streaming, supporting broadcasters' ability to produce quality content more conveniently, as well as making it easier for our users to participate while viewing live streams. I will now provide you with some updates on those initiatives.
Our open platform for 1/3-party application developers has been up and running for almost 2 years. By the end of September, more than 290 tools had been developed on this open platform, and over 880,000 broadcasters covering our core categories, including esports tournaments, games, and fan entertainment, have used these tools. In particular, the recently added capabilities for multiple user participation, such as Draw and Grab Together, and Mecha Fight, are now quite popular.
More users can join the streaming interaction and the gifting, and the bullet chats sent by users can also influence battle results. This increases the interactivity between broadcasters, helping users to effectively level up and strengthen the monetization capabilities of broadcasters. In August, we introduced a feature called One Click to Join Broadcasters Gameplay.
It was first applied in Peacekeeper Elite Channels. With this interactive gaming function, users can team up with streamers to play games while watching live streaming sessions. The Gift Drop feature we released earlier this year is now available in more games, including the latest LOL: Wild Rift. Through our cooperation with the game studio, Gift Drop will be triggered in a live channel for users to claim game tools and skins after downloading this new game.
Achieving a certain length of viewing time or when a broadcaster strikes a certain kill, it enhances the engagement in the streaming session, as well as the participation in the game itself. We believe the introduction of these interactive features not only offers more innovative gameplay to our users and broadcasters, it also improves the uniqueness of HUYA to game studios.
More importantly, it opens up more opportunities for our deep penetration in the game value chain. In terms of streaming technologies, we recently added HDR support to our esports tournament streaming, enabling users to enjoy more delicate game scenes compared to the existing ultra HD experience. While leveraging our self-developed voice recognition technology for game live streaming, the newly launched AI caption function identifies accurate game terms as well as player and team names, and provides real-time subtitles for live events.
Together with our live event instant playback and simultaneous multi-screen viewing functions, we were able to provide the best tournament viewing experience so far in the recently concluded 2021 season of League of Legends World Championship. Supported by the above mentioned technologies and our operational expertise, we continued our leading market share in broadcasting Worlds 2021. In light of the dynamic business environment, it is pivotal for us to strengthen our competitive advantages.
This primarily reside in fostering and retaining streaming talent, enriching and producing quality content, and delivering technology and product innovations. We are also confident that we can capture the opportunities brought by the new game launches. In recent quarters, there has been more regulatory attention surrounding our industry. We believe that the intention is to better regulate the space and promote its healthy Long-Term development.
We have been closely monitoring and following the regulatory guidelines, and will continue to strengthen our operations in accordance with regulatory requirements. Despite the potential impact of regulatory changes on our near-term growth, we believe in our agility and ability to remain competitive and relevant front to create
Long-Term value as we continue investing in quality content, upgrading products, driving user growth, improving monetization, and solidifying our leading position in the game live streaming market. With that overview, I will now introduce our VP of Finance, Ashley Wu, who has been with HUYA for years and has extensive company and industry knowledge. She will provide you with operating metrics in more detail and our financial assessment. Ashley, please go ahead.
Thank you, Mr. Dong, and hello everyone. Following Mr. Dong's remarks, I will start with an update on our content enrichment and diversification initiatives. Esports is at the core of our content ecosystem, and we have been committed to bring more high quality and popular esports content to game enthusiasts. During the 1/3 1/4, we broadcasted 131 1/3-party esports tournaments, generating total viewership of 590 million.
LPL Summer, Honor of Kings World Champion Cup, and LCK Summer were among the most watched events in the 1/3 1/4. Our exclusively broadcast comprehensive regional tournaments, including National Electronic Sports Tournaments and Esports Championships East Asia, were also welcomed by users. Although some key licensed events were temporarily delayed during the season, we added more professional comprehensive content in comparison with last year's schedule.
In the 1/3 1/4, we broadcasted 58 self-produced esports tournaments and entertainment PGC shows, and total viewership reached 142 million, growing over 40% Year-Over-Year. Among the esports tournaments that we produced, the HUYA All-Star Cup, HUYA 芒芒杯, has become a signature event for Peacekeeper Elite.
In this event's summer season, we invited top professional players and well-known broadcasters from multiple live streaming platforms in China, as well as several international teams to team up and compete, making it especially popular. During the series, we also hosted the Pang Hu Cup, 胖虎杯, for Crossfire Mobile, Crossfire HD, Assault Fire, and NARAKA: BLADEPOINT, all of which further complement the content for those game titles already on the HUYA platform, gaining even more traction with game lovers.
Notably, our Zhong Shen Cup for LOL: Wild Rift, Zhen Shen 杯, held in August, greatly attract users' attention before the formal launch of this much-anticipated game. In addition, during the period of HOK World Champion Cup, we produced a complementary program, Shi Hou Zhu Ge, integrating professional gameplay analysis with variety show.
It is the first of its kind for this HOK tournament. We believe it was a success, attaining a viewership of over 12 million during the 1/3 1/4. On the entertainment PGC program front, our long-standing GodLie Season Six, 狼人杀 GodLie 第六季, a werewolf game show, and HUYA Kung Fu Tournament Season Five, HUYA 功夫嘉年华 第五季, a mixed martial arts competition, continue to be the top-performing shows.
In September, we introduced HUYA Music Club, 深夜酒馆, our first music scene in-depth interview program. This program invites well-known musicians to share their stories, further enriching our pan-entertainment offerings. We continue to strengthen our efforts for videos by encouraging streamers to also become video content creators. In addition to the popular video-on-demand format, the video carousel format, 轮播视频, which supports ongoing replays, is also well-liked on our platform as it suits live streaming user habits.
In the 1/3 1/4, average MAUs who watch videos on our platform increased to approximately 40 million, representing quarte-over-quarter growth of 30%. Moving on to our international expansion progress. The average MAUs of Nimo TV, our overseas game live streaming platform, increased to more than 28 million in the 1/3 1/4, and the overseas revenues achieved over 200% Year-Over-Year growth.
The sequential user growth was mainly driven by certain regional esports tournaments, particularly in Southeast Asia. As we continue to deepen our relationship with local content providers and game companies, we are also refining our cooperation with local Asian talents for more sustainable and healthy future revenue growth.
Next, I will walk you through our financial highlights. In the 1/3 1/4, our total net revenues were approximately RMB 3 billion, up 6% Year-Over-Year. Our live streaming revenues were RMB 2.6 billion in the 1/4, a slight decrease from the same period last year, primarily due to lower average spending per paying user on HUYA Live, partially offset by the increase in the overseas live streaming revenues. The number of paying users for HUYA Live reached 6 million, which is flat compared with the same period last year.
Nevertheless, our paying user numbers improved compared with the second 1/4 and were in line with our mobile MAU expansion trends. The usual low spending from newly added paying users has resulted in a lower ARPPU in the 1/3 1/4. Advertising and other revenues increased by 137% Year-Over-Year to almost RMB 374 million in the 1/3 1/4, primarily driven by revenues from content licensing.
Profit levels in the 1/3 1/4 were impacted as we step up investment in our content. Our Non-GAAP gross profit was RMB 560 million. Non-GAAP gross margin was 73%. Our Non-GAAP operating profit was RMB 154 million, and our Non-GAAP operating margin was 5.2%. Our Non-GAAP net profit was RMB 180 million with a Non-GAAP net margin of 6%.
Now, moving on to our financial details. Unless otherwise specified, the growth rates I will reveal are all on Year-Over-Year terms. Cost of revenues increased by 12.6% to CNY 2.5 billion for Q3, primarily attributable to the increase in revenue sharing fees and content costs.
Revenue sharing fees and content costs increased by 16.3% to CNY 2.12 billion for Q3, primarily due to the increase in revenue sharing fees in relation to certain broadcaster incentive programs and the increase in spending on esports content and content creators. Bandwidth costs decreased by 14.2% to CNY 178 million for Q3, primarily due to improved bandwidth cost management and continued technology enhancement efforts.
Gross profit decreased by 18.8% to RMB 504 million for Q3, primarily due to the increased cost of revenues driven by higher revenue sharing fee and content costs. Gross profit was 16.9% for Q3. Research and development expenses increased by 12.9% to RMB 206 million for Q3, primarily attributable to increased personnel-related expenses.
Sales and marketing expenses increased by 59.5% to RMB 229 million for Q3, primarily attributable to increased marketing expenses to promote the company's content, products, services, and brand name, particularly including promotional activities for esports events and cooperation with various marketing channels during the summer vacations. General and administrative expenses decreased by 32.6% to RMB 80 million for Q3, primarily due to lower share-based compensation expenses.
As a result, operating income decreased by 62.7% to RMB 83 million for Q3. Operating margin was 2.8% for Q3. Interest and Short-Term investments income were RMB 63 million for Q3, compared with RMB 76 million for the same period of 2020, primarily attributable to decreased interest rates. Income tax expenses decreased by 19.9% to RMB 41 million for Q3. Share of income in equity method investments, net of income taxes, was RMB 379 million for Q3, compared with RMB 0.2 million for the same period of 2020, primarily attributable to the investment income related to a disposal equity investment.
As we disclosed in July this year, a private equity fund that HUYA invested in as one of the limited partners entered into a definitive agreement to sell its minority stake in a gaming company. Net income attributable to HUYA Inc. was RMB 524 million for Q3, compared with RMB 253 million for the same period of 2020.
Non-GAAP net income attributable to HUYA Inc., which excludes share-based compensation expenses and gain on fair value change and disposal of equity investments, net of income taxes, was RMB 180 million for Q3, compared with RMB 361 million for the same period of 2020. Diluted net income per ADS was RMB 2.17 for Q3. Non-GAAP diluted net income per ADS was RMB 0.75 for Q3.
As of September 30, 2021, the company has cash and cash equivalents, Short-Term deposits and Short-Term investments of RMB 11.12 billion, compared with RMB 10.74 billion as of June 20, 2021, primarily attributable to a cash inflow from the equity investment disposal mentioned above. With that, I would now like to open the call to your questions.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to withdraw your request, please press the pound or hash key. For the benefit of all participants in today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Once again, ladies and gentlemen, if you wish to ask a question, please press star one on your telephone keypad. Your first question comes from the line of Thomas Chong from Jefferies. Please go ahead.
Thanks management for taking my questions. I have 2 questions from my side. The first question is, can management comment about the performance for S11? Number 2 is about our expectation with regard to the user trend as well as the revenue expectation. Thank you.
The S11 actually took place last weekend, and we are more than happy to see that this event has caused sensational outcomes in the world of games. We are very happy to see that another LPL team entered into the final and got the title in the end.
We believe that the influence of this event is expanding. We're very happy to see that during this whole S11 period, HUYA had continued our lead in the market shares. During this event, HUYA had saw a number of new records made for the viewership, especially for PCUs. This year actually is 2 times of that from the last edition. It has also recorded as the highest PCU for HUYA platform in its history.
During this tournament, we had launched operational activities together with Tencent, and also we launched a mobile game based on the tournament. Both of those activities has delivered very nice results.
We will continue to improve our live streaming technologies to optimize the viewer experiences. The penetration rate of HUYA and thus the event actually is the highest during the past 3 editions.
好的，下面我来回答一下关于用户和收入的这个问题。那总体来说，我们预计用户方面是能够继续保持增长的，那可能其中呢会有一些季度季节性的影响。那我们相信我们的内容投入会有利于用户方面的一个增长。那我们也希望近期的这个新游戏以及赛事能够对用户增长有正面的一个作用。
Now Ashley Wu will talk about the users and revenue expectations in Q4 next year. Overall speaking, we expect our users to grow continuously, and despite some seasonality changes, we believe that our investment in the content will help us to grow our viewership. Also we expect some very positive impact from most recent new mobile launch, new game launches as well as tournament events.
新游戏一直是我们获取用户的一个重要的来源。这次S11的夺冠以及电竞正式进入亚运会，是有利于电竞内容的进一步破圈。从长远来看的话，虎牙潜在用户市场会有进一步上升的空间。
New games has always been a important source for our users, and winning the title for S11 this time, and also, for esports, becoming an official item in Asian Games will both create very positive impact for our viewers, and will help us to enter into a wider audiences population. For the longer term, we believe that our potential user growth will continue to increase.
在收入方面的话，我们的收入在一定程度上会受到宏观环境以及直播行业的影响。那虎牙的目标是说希望能够领先于整体行业的一个表现，在明年继续实现收入的增长。
In terms of revenue, we believe that revenue to some extent is under the impact of the microenvironment as well as the live streaming sector as a whole. Our target is to keep a higher than average growth pace and continue to grow in years to come.
好的，那回答就到这里。
That's it. Next question, please.
Thank you. Our next question comes from Yiwen Zhang from China Renaissance. Please go ahead.
郭宏诚晚上好，谢谢，这是我的提问。我这边有两个关于英雄联盟手游的问题，第一个是就游戏也发行了正好一个月嘛，可不可以请郭宏诚评论一下，就是说这游戏对我们新用户增长的一个影响。如果参考之前像王者荣耀跟吃鸡的一些表现的话，大概就是说新游发行到去看直播用户进来当中一个gap大概有多久呢？这是第一个问题。然后第二是想请郭宏诚介绍一下我们为这款游戏做的一些准备吧，包括像主播招募，然后我们的一些自办赛事筹备，等等，然后也想要请教一下那边可能带来一些额外的内容成本会有多少，然后我自己翻译一下。
Thanks for taking my question. I have 2 questions regarding LOL mobile. Firstly, it's exactly one month into the game launch. Can you share more color on the new user growth from this title? And if we make a reference to Honor of Kings and also Peacekeeper Elite, what is the gap between like game launch and the user coming into our platform?
Secondly, can you discuss the preparation we made for LOL mobile, including the streamer recruitment and also our self-organized tournament? Additionally, how much incremental content cost do you expect to incur? Thank you.
好，英雄联盟手游这个上线一个多月了吧。对，就是跟以往一样，我们虎牙在这个新的游戏上面，我们占据了最大的市场份额了。然后目前能够从目前数据来看，我觉得我们这个游戏的直播的数据表现也是非常好的。我觉得整体来说的话，其实不亚于那些吃鸡游戏。当然我们可能还需要密切关注后续表现吧。
You're right by saying that LOL mobile was launched about one month ago, and HUYA platform continued to take the significant market share. Right now, the user or viewership performance is better than other games such as PUBG. Of course we will continue to monitor the performances going forward.
对，然后这个我们发现这款游戏跟这个看这款这个手游的用户，跟看这个英雄联盟端游的用户和王者的用户其实不是一个替代关系，所以我们整体觉得这款，我们对这款游戏的未来，对用户的扩展，我们还是非常有信心的。
This LOL mobile is by no means replacing the users for LOL PC or HOK, therefore, we have the right confidence of gaining more viewers and users from live streaming for this mobile game.
当然我们运营工作的这个准备，其实这个准备都相当长了，这差不多已经准备大半年了。对，然后这个我们这个上线之前就已经做了很多的这个签约主播的储备，也跟很多的公会这个做了这个密切的配合吧。
In preparation for the launch of this game, we've done a lot of things in operation. For instance, we had signed some live streamers as well as working together with talent agencies in preparation for the launch.
对，然后这个手游上线前后，我们举办了多项这个赛事和运营活动，然后呢进行了主播的挖掘还有曝光。目前这块的这个签约主播已经有这个上千人，并且已经签约了一些职业的战队。
Since the launch, we had organized a number of tournaments and events in order to give opportunities for live streamers to, you know, make their shows and make exposures. We have now signed over 1,000 streamers and also had signed a number of professional teams.
后续我们也会考虑采购一些英雄联盟手游的国内的联赛和其他赛事的一些版权，并且跟以往一样，我们会做一些虎牙自主IP的一些赛事。
Going forward, we would consider acquiring licensed tournaments in China for domestic leagues as well as other key important tournaments on top of organizing our own tournament events.
Okay, next questions please. Thank you. Next question comes from Lei Zhang from Bank of America Merrill Lynch. Please ask your question.
管理层晚上好，谢谢接受我的提问。有两个问题，第一个是主要关于我们的利润率这一块的，不知道有没有未来的趋势可以分享一下，尤其是我们的收入分成，还有内容成本的趋势。然后第二个问题也是关于整个赛事的。因为我之前我们也拿了那个LPL的赛事五年的版权，所以想看一下未来我们虎牙平台整个赛事获取的策略有没有什么变化，还有对之后的赛事的价格的预期可以跟我们分享一下吗？谢谢。Uh, 2 questions here.
First is on the margin trend. Can you give us more color on the margin trend, especially on any change in revenue sharing costs and content costs? Secondly, wondering about your updates on your strategy about esports tournaments and how should we think about the tournament related costs in the future? Thank you.
为了增强虎牙的竞争力，并且更好地服务用户，虎牙是从Q3开始加强了对内容的投入，主要包括是对内容创作者以及赛事版权内容和自制内容方面的投入。在主播分成方面，为了提高市场份额和加强平台的竞争力，在维持目前基础分成政策不变的情况之下，我们也会依据市场的情况给到主播一些额外的激励。
In order to improve our competitiveness and better serve our users, we had step up our effort in putting more resources in content as in Q3, including by making more investment for our content creators as well as self-produced high quality content and licensed tournament content as well.
In terms of revenue sharing with our live streamers. In order to improve our competitiveness while maintaining the basics of revenue sharing mechanisms unchanged.
We will also address and trying to give more incentives for these live streamers according to the market dynamics. 另外我们也会观察到，就目前虎牙的这个利润水平呢，会随着一些赛事的安排和运营活动会有一些季节性的波动。那在今年第四季度，因为有一些赛事的这个赛程的变化，主要是S11这个赛程推迟到Q4来举办，那这块会对我们的赛事成本分摊会有一些影响。那另外在Q4，因为年底我们会有比较多的这种运营活动，那这块来说，我们可以看到就是Q4的成本，内容成本方面会相对会高一点。
In terms of margin levels, there's some seasonality changes according to the scheduling of our operational events as well as tournaments, especially in Q4 this year, because there are a number of big events towards the end of the year.
There are some postponements of events and tournaments such as S11 all took place in Q4. That has generated some impact on our tournament costs and also the operation costs with regards to content.
好，我来讲讲这个赛事这个部分。大家知道最近这个S赛决赛其实挺热的，也包括说未来的这个杭州亚运会，对电竞，这个也是首次进去吧。所以呢，我们整体认为啊，就是整个电竞赛事的这个热度应该还会持续。所以呢，从这个维度来说，我们预计这个中长期来说，赛事的版权的价格有可能还会提升。
Mm-hmm.
Mr. Dong will take the question with regard to our tournament and its IP cost. Well, actually, we believe that esports will continue to be very popular in a few years to come, especially with the S11 final title as well as Asian Games. We believe that the costs for top tier tournaments will probably go higher in the future.
但是另外一个维度来说是这样的，就是我们对新游戏或者是这个长尾的这个游戏来说，其实直播平台的赛事更多对它是一个推广的价值。所以这部分来说呢，这个价格应该是比较平稳的。然后呢，第三个的话呢，就是对虎牙来说，这个办这个自制内容其实也是虎牙未来非常重要的一个内容的一个资源。
On the other hand, for some long tail tournaments or new tournaments really depend on the promotion of live streaming platforms, so the cost for these kinds of events will probably be quite flattish. On the other hand, we also notice that self-produced content is also a very important source of content for HUYA.
对虎牙在自办赛事这方面，其实过去做了很多的尝试，包括我们的电竞自办的电竞赛事，也包括一些自办的一些娱乐赛事。对，我们希望未来对这方面继续加大投入，因为我们整体认为自制这个赛事内容，它的性价比比较高，而且也是虎牙独特的一个内容。对，我们也希望随着时间推移，这部分的比例能够从现在的逐渐上升到10%到20%。
For self-produced content as well as our own esports tournaments or event, entertainment events, we believe that the, this kind of content create better value for money, and it's quite unique to our platform. We will continue to invest in these kind of areas and we hope to raise the percentage points from the current level to around 10%-20% in years to come.
Okay, next question please. Next question comes from Ritchie Sun from HSBC. Please go ahead.
管理层晚上好，谢谢你们接受我的提问。我有两个问题，第一个想请教一下，你们可以分享最新的竞争格局的变化吗？我们在不再有合并，还有竞争还是比较激烈的情况之下，怎么看长期公司的利润率的水平？第二个问题就想问一下，我们在游戏视频这块的工作进展，刚才也讲到现在有四千万左右的月活，那有没有一些其他的数据，可能用户时长啊、留存率啊，还有变现的计划等等可以分享一下。So I would translate the questions myself. Firstly, I want to ask about the competitive landscape dynamic. How has that been trending?
Without the M&A and also ongoing intense competition, how should we think about the Long-Term net margin level for the platform? Second question is, can you share about the progress made in game video? You mentioned the MAU of 40 million. So what about user time spent retention as well as monetization plan? Thank you.
好，竞争格局这个我来讲一下，就是大家也知道，就是这个我们跟斗鱼的这个协议已经取消了。对，所以呢，就是我们又重新恢复了竞争。所以这个整体上来说呢，就是游戏直播的竞争格局其实跟以往区别相对不是特别大。对，然后大家也知道，一直以来就相比斗鱼来说，其实虎牙的运营效率会更高。对，然后就是我们其实一直密切关注整个行业的一些趋势的变化，整体上来说，我们其实认为，就是游戏直播未来的格局短期内不会有太大的一个变化。
Mr. Dong, on the question of competition landscape. Well, since we are not join hands with DouYu and became competitors again, we believe that in recent quarters, the overall competition landscape for game live streaming does not changed a lot. Compared with DouYu, I think we have a much better operational efficiencies and we have outperformed in terms of like users as well as our revenues.
大家知道，就是很多我们的竞争友军，其实在比如说电竞方面投入非常大，但我们从数据来看，我们其实认为虎牙在这方面其实一直是做得最好的。所以整体上来说，我们其实认为就是我们作为一个专业的原生态的游戏直播平台，其实在这方面的优势，事实上我们看到其实还在加大。
Even though our peers are making more and more investment in live streaming for esports. However, we are a professional platform for esports, and we rely on our core competitiveness and continue to strengthen our positioning in this regard.
所以我目前的整体的一个战略还是希望说能够进一步提升虎牙在整个游戏直播这个行业的这个市场的一个份额。就是希望未来能够进一步加大优势吧。然后另外一方面就是我们借着在游戏直播的以往的沉淀，我们希望对于这个业务做多元化的一些探索。这也是刚刚讲过了，我们可能对自制内容上面会加大投入。
As I said before, we will continue to gain our market share and also to keep strengthening our advantages in live streaming for esports. Over time, as we are accumulating more and more professional know-how and experiences in running esports, we would love to have a more diversified business models, and by relying on self-produced content, for instance.
好的，下面我来回答一下视频方面的一些内容。那现在能看到就是，视频的用户整个季度也有一个比较快速的增长，那这个视频的MAU已经到达了四千万，那相比起Q2的话是增长了30%。那我们可以看到，视频业务是我们直播内容的一个延伸，视频内容很多是源于赛事的剪辑和直播内容的一个再创作。所以虎牙在这方面是一个具有比较大的优势，是因为我们具备了创作这些内容的一些资源和能力。那，从目前的内容产出上面呢，我们也会鼓励，
就是公会和主播去自制一些视频的内容，并且也会提供一些更好的这个产品，协助主播去做一些这种视频内容的一个编辑。那比如说我们可以有一些就是AI识别出精彩内容，剪辑成视频的一些功能，那这些其实有利于我们视频内容的产出，以及能够帮助我们的主播或是我们的视频内容创作者去做出更丰富的一个视频内容。
Ms. Wu, on the question of video content production. Well, actually for videos, the user actually had increased since Q3. Our MAU reached 40 million compared with the previous 1/4 of Q2, there is an increase of about 30%. We believe that video business is a natural extension to the live streaming business that we have.
A lot of video content originated from the events, tournaments, basically about the editing and reproduction of the live streaming content. I think one of our biggest advantage in this regard is that we have abundant resources in terms of content origins, and we have a very good ability of editing and reproducing them into videos.
In terms of the video content production, we encourage live streamers and talent agencies to make video content. In terms of the products, we have launched a lot of new features. For instance, we have this highly efficient editing features, and we can use AI technology to identify the key moments and points and generate video clips automatically. This is a very positive feature that we have for producing content, for videos.
Okay, we can have the next question. Thank you.
Thank you. Next question comes from Brian Gong from Citigroup. Please ask your question.
好的，谢谢管理层接受我的提问。我想问一下，对于游戏和游戏直播这块的监管也出来一阵了，不知道管理层对于这些监管对我们公司的运营和一些收入的影响，这个看法有没有一个更清晰的看法，以及我们未来发展的策略会不会做出一些相应的调整。I will translate myself. Can management share your latest view on the impact from the regulation of gaming and game live streaming toward our operation and fundamentals, and if there are any change to our strategies post the latest regulation? Thank you.
好的，我来回答一下这个问题。刚才有提到，最近我们的这个行业受到了比较多的监管关注，其实我们相信这样做的目的是希望行业上能够更加规范、更加健康的发展，所以我们其实也是一直在密切关注和遵循监管的一些指引，并且在经营上面加强以及符合监管的相关要求。虽然说一些监管的变化可能对行业的收入或是用户的增长带来一些波动，那我们其实也会遵循监管的变化、监管的一些指引，相应调整我们的产品和运营，去满足这些监管的要求，以及满足用户相关的一些需求。
Thank you. As you rightly pointed out that in recent months, our industry has received quite a lot of attention from the regulators, and we believe the purpose of doing that is to better regulate, the industry and to promote a healthy Long-Term growth. We've been keeping an eye on the latest regulatory changes and make sure that our business operation is in full compliance with those regulations.
Even though there will be some short term changes, in terms of the revenue or user base growth because of the regulatory changes for the short term. We believe that for the longer term, we would be agile enough to mitigate the impact on our business and to actively address our product and operations to make sure that we can cater for the demands of the users and also at the same time be compliant.
That said, we will continue to invest in high quality content production to upgrade our products, as well as to consolidate our competitiveness of the business as a whole. For the longer term, we believe that this will help us to better serve our clients and generate Long-Term value. Thank you.
Thank you. Our final question today comes from Tian Hou from T.H. Capital. Please go ahead.
I just want management to give some color on your overseas business development as well as your plan or some thoughts about the cooperation with Tencent going forward. Thank you. Thank you, Miss Wu. On overseas Nimo TV business. Well, thanks to the tournaments in overseas as well as local operational activities, our MAU in overseas markets reached 28 million.
Especially we had a very stellar performance in the market of Indonesia, and our revenue from overseas market also continued to increase by over 200 percentage points Year-Over-Year. Our main strategy going overseas is to continue to use the local partners to cultivate our overseas markets and to expand our user base and to enhance our monetization ability.
Since this 1/4, we are redefining our cooperation with local talent agents and keep optimizing our cooperation with them. We believe that this will be positive for a healthy ecosystem building for the overseas market. We believe that for the short term, the overseas market will continue to be in the investment stage, but the loss in overseas markets, as a percentage points to margin level will continue to be lowered.
With our cooperation with Tencent, we truly hope that we can continue to deepen our cooperation with Tencent and our businesses, especially in the area of games, has been quite close. This year, we had launched some new features, such as Gift Drop or One Click to Join Broadcasters Gameplay.
This are to improve the interactivity of the live streamers and its users. We had first launched such interaction features in games by Tencent, such as PKE and others. Both from our side and from the game side had seen very nice outcome. In terms of the tournament, we had a Long-Term relationship with Tencent, for instance, by signing a 5-year agreement of cooperation for LPL, and this will help us to explore new ways of monetization.
Okay, that's it.
All right. Thank you. I would like to turn the call back to the company for closing remarks.
Thank you once again for joining us today. If you have further questions, please feel free to contact HUYA's Investor Relations through the contact information provided on our website or The Piacente Group. Thank you.
Now, this concludes the conference call. You may disconnect your line. Thank you.