Good morning. Welcome to Sea Limited Third Quarter 2020 Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Miss Minju Song. Please go ahead.
Thank you, Kate. Good evening and good morning, everyone, and welcome to Sea's 2020 Third Quarter Earnings Conference Call. I am Minju Song from Sea's Group Chief Corporate Officer's office. Before we continue, I would like to remind you that we may make forward-looking statements, which are inherently subject to risks and uncertainties that may not be realized in the future for various reasons as stated in our press release. This call includes discussion of certain non-GAAP financial measures, such as adjusted EBITDA and net loss, excluding share-based compensation and changes in fair value of the 2017 convertible notes. We believe these measures can enhance our investors' understanding of the actual cash flows of our major businesses when used as a complement to our GAAP disclosures.
For a discussion of the use of non-GAAP financial measures and reconciliation with the closest GAAP measures, please refer to the section on non-GAAP financial measures in our press release. I have here with me Sea's Chairman and Group Chief Executive Officer, Forrest Li, Group Chief Financial Officer, Tony Hou, and Group Chief Corporate Officer, Yanjun Wang. Our management will share strategy and business updates, operating highlights, and financial performance for the quarter. This will be followed by a Q&A session in which we welcome any questions you have. With that, let me turn the call over to Forrest.
Hello, everyone. Thank you as always for joining today's call. We are very happy to report another quarter of strong performance across our business. We continued to see robust user growth and a deepening of user engagement on each of our platforms during the quarter. We believe accelerating shift to digitalization in our global market is a sustaining trend. As the market leader in our core segment, we are well-positioned to capture the growth opportunities presented by this acceleration. Our strong financial and operational results for the quarter once again underline our ability to execute well and see a disproportionate share of the faster-growing market. On the group level, our quarterly GAAP revenue grew 99% year-on-year to reach $1.2 billion. Gross profits grew 101% year-on-year to reach $407.6 million. We also recorded very strong bottom-line results, with adjusted EBITDA reaching $120.4 million.
This further demonstrates the strength and efficiency of our business model. We will continue to drive rapid growth with efficiency as we further extend our market leadership. In line with our strong results, we are raising our guidance for both Digital Entertainment and E-commerce for the full year of 2020. In Digital Entertainment, we believe our very strong performance in the third quarter will sustain through the fourth quarter. As a result, we now expect bookings for Digital Entertainment to exceed $3.1 billion, representing over 75% growth from 2019. This revised guidance represents an increase of more than 59% from the midpoint of the previously disclosed guidance. We also expect GAAP revenue plus sales incentives net for E-commerce to exceed $2.3 billion. The revised guidance represents a more than 144% increase from 2019, and a more than 31% increase from the midpoint of the previously disclosed guidance.
These revisions reflect both the strong historical performance we have achieved so far this year and our continued positive outlook moving into the fourth quarter. Let me start with digital entertainment. The third quarter was another standout quarter for Garena, with strong performance across all our key metrics. Bookings were $944.7 million, up 110% year-on-year. Adjusted EBITDA was $584.5 million, up 120% year-on-year, representing 62% of bookings. The strong performance was driven by robust active and paying user growth. Quarterly active users reached 572.4 million, an increase of 78% year-on-year. Quarterly paying users reached 65.3 million, up 124% year-on-year, and represented over 11% of quarterly active users. We are particularly encouraged by the strong active and paying user growth for the quarter. This reflects our ability to continually deliver high-quality content that attracts and engages users. Free Fire sustained its strong performance.
According to App Annie, it continues to be the highest-grossing mobile game in Latin America and Southeast Asia in the third quarter. A key factor in Free Fire's continued success is our ability to constantly deliver high-quality content tailored for the taste and the preferences of our huge global user base. In recent months, Free Fire partnered with celebrities such as the Bollywood actors and global artists to create playable characters and other in-game content inspired by these celebrities. For example, in September, we released a playable character of a Bollywood star who was the lead actor in the highest-grossing Indian film in 2019. We have also worked with a popular global artist to create another song exclusively for Free Fire, which is played inside the game. Within two weeks of being launched, the song was streamed more than 25 million times across various online platforms.
We introduced more social and community features into the game. For example, the new training ground feature has been highly popular with our users. This is an area within the game where players can meet and hang out socially. So far, about one in four of our players spend time there every day on average. This and other social features further strengthen the network effect and the stickiness of the game. On the same note, our esports community continues to thrive. Free Fire's tournaments held during the quarter have accumulated over 150 million online views to date. In August, we hosted a national tournament for Brazil spanning two months. This tournament has recorded over 47 million online views to date. We're also extending the reach of our esports events beyond our strong online audience.
For example, the grand finals for Free Fire Indonesia Masters 2020 were broadcasted on national TV, reaching an even broader fan base online and offline. Our highly local and interactive content, and community activities increase the affinity of our users with Free Fire. These efforts also ensure that the game stays fresh and relevant for our users over time. This, in turn, grows our user base and improves engagement. As we move into the fourth quarter and look to 2021, we will continue to focus on providing the global Free Fire community with captivating content and fresh and engaging experiences, both within the game and through our social and community features. We are confident that there is a very long runway ahead for this franchise. Turning to e-commerce, Shopee had another great quarter.
Building on our momentum and leadership, we continued to capture more shares of our region's rapidly expanding e-commerce segment. We also continued to deliver more value to our sellers and buyers while deepening monetization and driving efficient growth. Shopee recorded 741.6 million gross orders, up 131% year-on-year, and a GMV of $9.3 billion, an increase of 103% year-on-year. GAAP revenue for the third quarter was $618.7 million, up 173% year-on-year. We also continued to drive efficiencies across the business with adjusted EBITDA loss per order decreasing by 48% year-on-year to $0.41 during the quarter. In the third quarter, Shopee continued to rank as the number 1 in the shopping category across Southeast Asia and Taiwan by downloads, average monthly active users, and the total time spent in app on Android, based on App Annie.
On a global level, Shopee was also the second most downloaded app in the shopping category, according to App Annie. In our largest market, Indonesia, Shopee continued to further extend its market leadership. It registered over 310 million orders at a daily average of around 3.4 million orders, an increase of over 124% year-on-year. It was also ranked first in Indonesia by average monthly active users, downloads, and the total time spent in app on Android in the shopping category in the third quarter, according to App Annie. As e-commerce grows in importance across the region, we have been focused on delivering more value for our merchants across the Shopee ecosystem. For example, in addition to the Google partnership announced last quarter, Shopee launched a new strategic partnership with five leading global media agencies.
This program is designed to equip these agencies with in-depth e-commerce knowledge, tools, and skills, so they can help more brands and retail merchants scale and succeed on Shopee. We help merchants create better Shopee experiences to engage consumers. Shopee Live is one example. Sellers have found this feature helpful in driving user engagement and retention with measurable results. Shopee Live recorded over 48 million hours watched in the third quarter. Our momentum has carried forward into a record-breaking Double 11 Big Sale Shopping Festival. We were heartened to see our SME sellers recording an incredibly successful sales event through the Shopee platform. In particular, the newer sellers who joined the Double 11 Big Sale for the first time, saw 10 times more orders than an average day.
We have built powerful bonds of affinity with our users. Today, Shopee is one of the most recognized and the best-loved brands across our community. In YouGov recently published 2020 Global Best Brand ranking, Shopee was the number eight ranked brand globally. Together with Amazon, represent the two e-commerce brands in the world's top 10 ranking. As we continue to solidify and extend our market leadership in e-commerce, we will stay focused on providing the best long-term value for our users and building a healthy and sustainable ecosystem for our region. Moving on to SeaMoney. We saw the same strong growth momentum observed across Garena and Shopee during the quarter. Our mobile wallet total payment volume for the quarter exceeded $2.1 billion, with quarterly paying users surpassing 17.8 million.
SeaMoney continues to deepen its integration with Shopee, leveraging Shopee's rapid growth and extensive reach to scale efficiently and effectively. In October, more than 30% of Shopee's total gross orders across our market combined were paid using our mobile wallet. We also continued to expand our suite of online and offline third-party use cases and partnerships in the third quarter. This has further increased the usage and brand awareness of SeaMoney across our community. We see a significant opportunity ahead of SeaMoney and believe that we can capture it in a highly efficient manner by building on our core use cases. Our focus remains on scaling the business to enable more consumers and merchants to benefit from the ease and convenience of our digital solutions. In closing, the strong momentum from the first half of the year has carried on into the third quarter and beyond.
Our third quarter performance is a testament to our ability to quickly adapt to the rapidly evolving needs and preferences of our community. While we are benefiting from secular tailwind and the rapid push towards digitalization, we remain very focused on strong execution to capture the growth opportunity. From highly local and deeply engaging content on Garena games to Shopee's new partnerships, we will continue to listen to and innovate around our users. As we move towards the end of 2020 and into 2021, we are further extending and solidifying our market leadership position across all the key segments of the digital economy in our region. Our conviction in the scale of the opportunities ahead for Sea over the long term is growing even stronger. We remain committed to serving our community with technology and enabling them to benefit from the growth of the digital economy in the long run.
With that, I will invite Tony to discuss our financials.
Thank you, Forrest, and thanks to everyone for joining the call. We have included detailed quarterly financial schedules together with the corresponding management analysis in today's press release, and Forrest has discussed some of our financial highlights, so I will focus my comments on the other relevant metrics. For Sea overall, total GAAP revenue grew by 99% year-on-year to $1.2 billion, which was mainly driven by continued monetization efforts in our e-commerce business in the past quarters, as well as growth of our digital entertainment business, especially our self-developed game, Free Fire. The 110% year-on-year growth in digital entertainment bookings to $944.7 million and 73% year-on-year growth in GAAP revenue to $569 million were primarily driven by the increase of our active user base and deepened paying user penetration, and in particular, the continued success of our self-developed game, Free Fire.
Digital Entertainment adjusted EBITDA was $584.5 million, an increase of 120% year-on-year, mainly due to strong top-line growth and our self-developed game accounting for an increased share of bookings. Our e-commerce GAAP revenue of $618.7 million included GAAP marketplace revenue of $467.1 million, up 164% year-on-year, and GAAP product revenue of $151.6 million, up 208% year-on-year. The strong results demonstrated the deepening penetration of e-commerce and our ability to capture these accelerated growth opportunities created by the rapid expansion of the digital economy. E-commerce adjusted EBITDA loss was $301.6 million as we continued our investment to fully capture the market opportunity in the region. We will continue to invest prudently and drive high-quality growth with increasing efficiency. Digital Financial Services GAAP revenue was $14.4 million, an increase of 766% year-on-year from $1.7 million in the third quarter of 2019.
Adjusted EBITDA loss was $149.3 million in the third quarter of 2020, compared to a loss of $33.6 million in the same period of 2019. This was primarily due to our continued efforts to drive mobile wallet growth in our market and expand the suite of online and offline third-party use cases and partnerships. Returning to our consolidated numbers, we recognized a net non-operating loss of $74.3 million in the third quarter of 2020, compared to a net non-operating income of $9.8 million in the third quarter of 2019. Non-operating loss in the third quarter of 2020 was primarily due to the higher interest expense and foreign exchange loss. We had a net income tax expense of $46.4 million in the third quarter of 2020, which was primarily due to withholding tax and corporate income tax recognized in our Digital Entertainment business.
As a result, net loss excluding share-based compensation and changes in fair value of the 2017 convertible notes was $346 million in the third quarter of 2020 as compared to $175.2 million for the same period in 2019. With that, let me turn the call to Yanjun.
Thank you. We're now ready to open the call for questions. Operator?
We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, press star then two. In the interest of time, we will take a maximum of two questions at a time from each caller. If you wish to ask more questions, please request to join the queue again after your first questions have been answered. At this time, we will pause momentarily to assemble our roster. Our first question is from Miang Chuen Koh from Goldman Sachs. Go ahead.
Thank you for that. Firstly, congratulations on another strong set of numbers. My two questions are, firstly, we see for the gaming side, the pay ratio increased significantly sequentially. Just wondering, is it due to the esports events you have launched or the social features you have added in the quarter? Along that line, what do you see as the ceiling as well for pay ratio in coming quarters? The second question is that, can we perhaps discuss a little bit of the fourth quarter gaming trends so far, especially given the new games you've launched in the last few months, like Fantasy Town or Fairy Tail? I'm asking this because in terms of the full year gross billing guidance, it appears to suggest perhaps a bit of a decline quarter to quarter for gross billings in 4Q. Thank you.
Thank you. In terms of the pay ratio, we see a very healthy pay ratio for this quarter, and we'll continue to work on engaging with our users globally and deepening our pay user ratio over time. Although we wouldn't say that is a singular KPI we're driving. Overall, I think, for Free Fire, as our goal is to make it into a long-living, classic IP and a major gaming platform with varied content and also a tiny social community. Our focus is still to drive user growth globally in all our markets. At the same time, we want to increase our user engagement, as you referred to, through a lot of community and e-sports events. One thing I also wanted to highlight that during the third quarter, that also happened to be the third anniversary of our Free Fire.
Therefore we had special events and content, which is very well received by our communities, and that also helped with the pay user ratio. If you look at our fourth quarter, we stated that we expect the overall gain for games to exceed $3.1 billion. We actually wanted to highlight that we meant for the fourth quarter to be sustaining the strong performance of the third quarter. Third quarter is an outstanding quarter with more than 100, close to 110% year-on-year growth. Despite that, we expect fourth quarter to continue this very strong trend with more than 90% year-on-year growth, even if we just hit the $3.1 billion. We hope to beat that, although we want to remain conservative on our projections.
Therefore, we think on the gaming side, we'll continue to see very strong performance into the fourth quarter and next year as well. In terms of our new games, Fantasy Town is a farming simulation casual game. We also incorporated a lot of the local content, for example, Indonesia, local landmarks, and characters into the game to really cater to our local community's preferences. Fairy Tail is a turn-based RPG game, and these are our efforts to expand our genre and diversify our gaming portfolio over time. We're not particularly focused on monetization per se for these games, but more on understanding our local community base and their preferences and user behavior with respect to different types of games.
Our next question is from Thomas Chong from Jefferies. Go ahead.
Thank you management for taking my questions, congratulations on a strong set of results. My question is about the e-commerce competitive landscape. Can management comment on whether we see any intensifying competition in the Indonesia market? On top of that front, can you also comment about how we should think about online grocery category in the Southeast Asia market post-COVID? Thank you.
Thank you. Competitive landscape, I think it continues to improve as far as Shopee is concerned. As we continue to extend our market leadership, our Q3 quarter order growth was more than 130% year-on-year, which is way ahead of the market growth rate. Also, we believe to be the other players' growth rates in our market. As we said before, e-commerce is something that enjoys a very strong network effect, and the flywheel effect as well. As we become a strong market leader, we believe we'll continue to grow. Given the current environment of rapidly deepening digitalization and accelerated adoption of e-commerce, we believe it's a golden opportunity for us to capture a disproportionate share of the market growth.
In any case, we think there's a very long runway for all players in the market given the relatively low penetration in Southeast Asia for e-commerce at this stage yet. We believe in the longer run, given the demographic and also the geographic nature of our region, we believe e-commerce penetration should go much deeper. We hope to work with all players in the market to collectively expand the pie. At the same time, we also hope to further extend our market leadership. In terms of online grocery, we continue to see very strong demands on FMCG, including grocery on our platform.
We believe that as people, especially new users during this COVID period, come onto the platform, having experienced the convenience of buying things online, as well as especially during the social distancing period, I think this is something that once people get into the user habit, it is very sticky. We continue to see very strong growth in this category.
Our next question is from Piyush Choudhary from HSBC. Go ahead.
Yeah. Hi, thanks a lot, and congratulations for a strong set of results. Two questions, both on e-commerce. Firstly, what drove a quarter-on-quarter improvement in monetization? Could you share what proportion of revenue comes from advertising income? You have launched this program with five media agencies. Can you share some initial success of that? Secondly, on GMV growth, can you give us insights on how it is faring across your countries?
Sure. On the monetization, we are actually seeing a very strong and healthy growth in our revenue from Shopee e-commerce platform. That is still largely attributable to increase in the high margin part of the revenue, i.e. transaction-based fees, including commissions, opt-in programs, handling fees, et cetera, as well as advertisements. Also, the increased revenue from value-added services, which mainly consists of cross-border logistics as well as on the first-party product side, contributed to the increase as well.
The key trend is that we continue to expand our high-margin revenue, thanks largely to increase in demand for advertisement by our sellers as well as opt-in programs where sellers can voluntarily pay a higher commission or fee for joining certain program that benefit their consumers and that improve their own sales volume, such as free shipping programs, any vouchers, and also promotion programs and featured seller programs on our platform also during the shopping event. This, I think, is a very positive trend. We continue to work with our sellers to improve the adoption of these programs as well as advertisement as our seller communities continue to grow with us.
Our next question is from.
Sorry. Let me address the other two questions as well. Regarding the media agency partnership, this is another great example where we help our sellers, especially brand sellers, on our mall side, to grow the business faster. We have been working with various media agency to educate them on advertisement on Shopee platform, on our user behavior, on how to best attract and engage with our users. That they can help their clients, which tend to be the brands, better. This is also in line with the recent trend, whereby we see a lot of brands coming onto our platform. We now have more than 20,000 brands on Shopee platform, and the number continue to increase fast, especially during this period, where we see the brands increasingly see digital solution as something that's integral to their overall offering given the social distancing restrictions.
In terms of GMV growth across different markets, I think we continue to see very strong growth. The market differences are in terms of certain markets generally were less affected by COVID throughout this period, like Taiwan, Vietnam, as we shared before. Their growth rates continue to be robust and in line with our general trends. There are also markets that have been affected by the lockdowns more, but subsequently have lifted most of the lockdown measures. For example, like Thailand and in Singapore, we see initially very strong increase in our e-commerce demand and especially new user growth. Those users tend to stick with us, and therefore, the performance is staying throughout. Even though the Q-on-Q growth wouldn't be so strong as between Q1 to Q2, the year-on-year growth continue to be very strong.
In some market, we even saw five times or six times difference. In other markets like Indonesia, the Philippines, and Malaysia, we continue to see some resurgence of cases and from time to time, lockdown restrictions being imposed in different formats. As a result, I think we still continue to see heightened demand in our platform as well. I think it's still too early to talk about a post-COVID situation, but given the lockdown measures have been lifted before in pretty much all the markets, and during those period of time, we have observed a very sustained strong growth of our platform, we continue to believe that the deepening of digitalization and adoption of e-commerce during this period is sustainable.
Our next question is from John Blackledge from Cowen. Go ahead.
Great. Thanks. A couple questions. First on digital entertainment. Could you discuss Free Fire's monetization in markets outside of Southeast Asia and Latin America? Then on Shopee, in the past, you've called out that Taiwan is EBITDA flat-ish before corporate expenses, in part given significant market share advantage. In your other markets, if you get to similar market share position, is there anything structurally that would limit the margin profile? More broadly, just any color on Shopee's EBITDA trajectory going forward would be helpful. Thank you.
Thank you. In terms of monetization outside of Southeast Asia, we previously shared before that our revenue contribution for markets outside of Southeast Asia already constitute a majority of our digital entertainment bookings. We continue to see very strong trends, including in the Latin America market, which has a similar population size. In terms of GDP per capita, probably is a bit higher than Southeast Asia region. We think there is a very good potential to continue to drive user growth and pay user, and deepening engagement with our users and drive monetization over the long run. Again, we're looking at it as a very long-term game, and therefore, we're not trying to extract every last dollar. We're still at the growth stage one and two to continue to grow this game in Latin America as well as other markets in the world.
In terms of the Shopee platform, Taiwan's EBITDA margin continued to rise. It's not actually flattish. Therefore, we have no doubt that e-commerce, especially a strong market leader, can command a very healthy margin. Although we don't separately disclose it, but it's not actually flattish. Therefore, we do not believe that in other markets, there's anything that we see that would potentially limit the margin that can be achieved in the longer run by a very strong market leader.
Our next question is from Ranjan Sharma from JP Morgan. Go ahead.
Hi. Good evening, thank you for the presentation. Two questions from my side. Firstly, on Shopee Brazil. Can you share what is the strategy for that market now? It seems to have evolved more than a cross-border business, because we do see some local sellers there. If you can talk about your aspirations for Brazil from an e-commerce perspective. The second question is on Free Fire Max. We have been seeing a number of open beta tests happening. If you can share what the feedback has been, then what you are doing to drive success of that game in more developed markets. Thank you.
Thank you. In terms of Shopee Brazil, as we shared before, it was initiated and started by our cross-border team, therefore it's primarily cross-border driven. As the team continued to grow the business, we also saw adoption by local sellers, which we certainly welcome that. In terms of Free Fire Max, again, we see it as an integral part of Free Fire as we try to cater to the broadest range of consumers so that our users can choose to play the Free Fire version or Free Fire Max depending on their own preferences and their phone's specs. Basically, we don't see it as a separate game, but also as part of the Free Fire experience.
I think that we are focused on making sure the user experience is highly smooth because people who are playing Free Fire and Free Fire Max will be on the same map. A lot of the details need to be worked out, and we will continue to focus on improving our user experience, whether it's through Free Fire or Max version.
Our next question is from Alicia Yap from Citigroup. Go ahead.
Hi. Thank you. Good evening, management. Thanks for taking my questions. Congrats on the strong results. I have some follow-up questions on the e-commerce. In terms of the monetization model, could you help us rank in terms of the percentage of revenue contributions among transaction fee, VAS, advertising? Potentially you could help us rank by the fastest growth rate, the year-over-year growth rate this quarter. Any meaningful difference between, let's say, the country in Indonesia versus the overall group level? Secondly, is there a change of the product mix or seasonality this quarter? Because it seems like the AOV is a little bit lower. What could be the reasons for that? If you can update us on the purchase frequency this quarter. Thank you.
Thank you. In terms of the percentage of revenue, we don't specifically split it, but suffice to say that the high margin revenue from transaction-based fees as well as advertising is a majority of our revenue, and also the majority of the contribution to the revenue growth. The reason we lump transaction-based fees and advertising together in our market is that certain programs, like a lot of the opt-in programs that are driving very importantly contributing to the revenue growth, it actually relating to advertisement or featured shop placement on shopping platform. The reason it's under transaction-based fee is because we actually help our sellers who might not be sophisticated yet to individually manage their advertisement placement and calculate our own advertisements, et cetera. That we actually facilitate that by offering this program to allow sellers to pay Shopee a higher fee, and then they become worry-free.
We will manage the keyword search bidding, the placement, the banner, participation in event, et cetera, for them as part of the transaction-based fee. It's a little bit hard to say whether that's advertisement or transaction-based fee. I think the important thing is it's a high margin revenue that is the higher percentage and it's driving the growth. That is also part of the reason we believe in the longer run, the profitability model of the e-commerce is not to be worried. Also in terms of our AOV for e-commerce this quarter, I think we mentioned before that low to mid double digit, low-teen to mid-teens range is something that probably appropriate to our market. Naturally, as you see countries like Indonesia and Philippines with larger population and the growth over time, overtaking markets like Taiwan or Singapore, generally with a smaller population.
Those markets with lower basket size tend to account for, over time, more GMV than those with larger basket size, but smaller population. Also particularly during this period, we see very strong growth from those markets as we mentioned, like Indonesia, Philippines, Malaysia where there are more lockdown measures being implemented on and off during the whole period. The year-over-year growth is particularly strong from those markets. I think overall we'll continue to watch the product mix very closely. I think what we see is that during the COVID period, particular categories like home and living, FMCG enjoyed particularly strong growth. Now with the lockdown being eased in most of our region we continue to see fashion start to recover and the pace of recovery is accelerating, and it remains a top category. The overall top category mix hasn't really changed that much.
While home and living continue, and FMCG, health and beauty continue to be very strong, we also start to see very strong recovery of fashion.
Our next question is from John Choi from Daiwa. Go ahead.
Good evening. Thank you for taking my question. I have two questions here. First of all, on your Shopee business, I think clearly we're seeing a very strong trend on the GMV and also the revenue side. I just want to understand what are the priorities when it comes to investment to further propel the top line growth and eventually narrow down our EBITDA going forward. I think I want to know the investment priorities and where do you think you need to put more work into. Second is on Free Fire. I know that we've done very well across the region. I think management did share some highlights. Can you elaborate a bit more how we should think about the average bookings per user right now?
Clearly it seems that we're still at an early stage, but how much more upside do we see in terms of the ARPU? Are we going to launch any new type of monetization methodology within the games? Thank you.
Thank you. In terms of e-commerce, I think we're very consistent in our approach and our communication that we want to continue to grow our e-commerce platform and continue to strengthen our market leadership, at the same time focus on efficiency of growth and deepening of monetization at a right pace for our market. Therefore our focus is never changed in that regard. Of course, as a business model eventually, naturally breakeven will come and naturally a healthy margin we believe can be reached. It is a scale business, and it is also a business with very strong network effects. Therefore, we believe it's very important to continue to drive growth especially during a period where we continue to see very rapid adoption of e-commerce and deepening of digitalization in our region.
As we emphasize, this is the golden time to drive growth, and we want to make sure the e-commerce penetration can go further in our region. Also in terms of digital entertainment booking. Overall, I think we have a very healthy and strong number achieved for third quarter at $1.7 per user. That is at an active user base of more than 570 million for the quarter. I think for our game, we believe that given the global market it is accessing and growing there are also potential to continue to drive paid user ratio as well as average booking we can achieve per paid user over time. Again, the focus, similar to e-commerce, is to continue to grow this game itself. We're not worried about monetization of a game with a massive user base and high user engagement. It does come very naturally.
If you look at our performance, also top line growth as well as the bottom line at a group level especially, we didn't try that hard or didn't drive it. It just comes naturally when the business scales. Scaling is something that we continue to focus on. Of course, we are very careful about efficiency in our scaling and of course watching the natural market dynamics and be very close to our users. This is still the top priority.
Our next question is from Mark Goodridge from Morgan Stanley. Go ahead.
Hi, guys. Just had a question on the games business, specifically for Latin America. We obviously heard from you guys last year with potentially growing out a third-party publishing business in that marketplace. We've seen the huge success of Free Fire, so it's been a bit quieter coming through on that front. I just wanted to ask, would you be able to share some of the initiatives that you've been doing specifically this year? Some of the games that are potentially coming through specifically into Latin America. Following on that is there an opportunity to replicate that potential third-party publishing business into India as well? Thanks, guys.
Thank you. In terms of third-party publishing side, we continue to work very closely with our developer partners globally and to discuss potential opportunities in our global market. The performance of Free Fire, in particular in those markets, is definitely very helpful. Basically, a data point for all our developer partners in assessing our understanding of the market operational capabilities and a strong capability to drive growth in those relatively difficult and complex markets where I would say wouldn't see another player of our scale have achieved the kind of track record that we have. That put us in a very unique position globally in driving growth on the mobile game esports side. We will continue to work with our partners and potential partners. As usual, we don't disclose stages or initiatives or discussions or pipeline for confidentiality reasons.
You will see it when we officially announce it. That's something that we also continue to focus on.
Our next question is from Varun Ahuja from Credit Suisse. Go ahead.
Yeah, hi. Good evening, everyone. I've got three questions. First, two on the gaming side. If you look at last two quarters, we have seen very strong quarter-on-quarter growth of more than 30% on the gaming side. Primarily, I think driven by Free Fire. If you can provide a little bit more color. I know it has been also coincided with the COVID, but which all markets have there been such a strong performance on the Free Fire? We have seen also ranking improving in U.S., and is it India where monetization is happening much better? Any other countries which have shown growth? The key where I'm coming from is sustainability of this revenue growth. I know you have mentioned that you believe that the game has still long way to go, but just to give some data points to draw some comfort will be helpful.
That is number one. Number two is on the new games launches. It's been a while we have seen some new games from you. Any color, anything that will be helpful. Another thing is that League of Legend Mobile is being launched. You guys didn't get it. Any reasons for the same? Is it not under ROFO? Any color on that will be helpful. Lastly, on the consolidated EBITDA, if you look at on the profitability side, it's very comfortably you are on consolidated EBITDA profitability. Future, if you look ahead, is it likely to remain this or it's going to fluctuate quarter on quarter depending upon the e-commerce investment that you will have to make? Thank you.
Okay, thank you. In terms of our global performance of Free Fire, the revenue contribution, we talk broadly three buckets: Southeast Asia and Taiwan, Latin America, the rest of the world, which are what we call the emerging frontier markets for us. That ranked by the time of launching and user engagement of the game. We see that revenue contribution coming from all three regions, and same as revenue growth. We see very strong trends in all three buckets, and that is very encouraging.
Of course, if you think about long-term growth potential and runway, probably the frontier markets present the greatest opportunities. In terms of, given the current very low penetration, yet in the global market, many of which including some very high developed markets that we haven't really fully captured and even, I wouldn't say formally entered yet. I think there are still very huge long runway and huge opportunity for our team to tap in that regard. Whereas for Southeast Asia and Taiwan, for example, we'll continue to drive user engagement and deepening monetization. Same for Latin America, which is a relatively new market for esports games. I think in terms of how deep the penetration can be, including the payer penetration, remain to be seen.
We already see very strong positive trends that showcase the market has at least a good potential, if not more than Southeast Asia, as I mentioned before. I think we're very optimistic of continuing to growing the game there. That is one reason that gave us confidence in the sustainability of the revenue growth of Free Fire. If you look at our year-on-year growth, Q1 was at 30%, Q2 more than 60%, Q3 more than 100%. It was a very fast, rapid acceleration. I think that's why we are very happy to see that our projection for Q4 is sustaining the strong performance of Q3. Continue to get close to a three-digit growth for gaming revenue of this magnitude, I think is quite an achievement for our game team. Again, we will continue to grow the game for the long run.
In terms of EBITDA trajectory, we do not give guidance on EBITDA. As I said before, that our focus for each our business is to drive growth as given that our potential massive user base as well as a low penetration in many of the core markets we are seeing in each of our core business units. I think the opportunity of the digital economy in our region and for our game business in particular globally, is really way ahead of us to tap. For each of our businesses, we also are very confident of the ultimate profitability of the business. You can't see a game business that's really loss-making or a strong market leader in e-commerce cannot be profitable or drive a very healthy margin. As DFS, I think the ultimate business model has been very well proven.
I think the question is how can we scale our business, and at an efficient rate that is right for our market, and we will continue to execute and our track record has shown that we focus on growth as well as efficiency at the same time. When the margin improvement naturally comes, it comes. I wouldn't say it is something that we try very hard to artificially drive it.
This concludes our question and answer session. I would now like to turn the call back to Minju Song for closing remarks. Go ahead.
Thank you everyone for joining today's call. We look forward to speaking to you all again next quarter. Thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.