Perfect World Appoints 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 assumed the role of CEO. This transition signals a strategic shift for the company, aiming for a fresh start and a new direction. The new CEO's strategies will be closely watched.

Perfect World's Recent Challenges

The company's recent layoffs represent a considerable setback. Revenue from existing games has declined, with even the highly anticipated One Punch Man: World underperforming in international beta testing. The game has been remarkably inactive, lacking updates on the App Store and Google Play since April.

Perfect World anticipates significant financial losses in the first half of 2024, projecting a net loss of 160-200 million yuan, a stark contrast to last year's 379 million yuan profit. The gaming division will be most severely impacted, facing a projected net loss of 140-180 million yuan.

Further compounding the situation, the middle office team has been drastically 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 financial volatility, but its Version 4.2 update (scheduled for August 6, 2024) is expected to revitalize interest and potentially improve financial performance.

The newly announced game, Neverness to Everness, has generated considerable excitement. While revenue generation is still some time away (a 2025 launch is the earliest expectation), the nearly three million pre-registrations worldwide within a week demonstrate strong player anticipation.

The success of Perfect World's new leadership in navigating these challenges remains to be seen. The coming months will be crucial as they implement key initiatives, streamline operations, and strive to recover financially.

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