CooTek (Cayman) Inc. (CTK) has experienced an increase of 6% in aftermarket following the announcement of building a metaverse. However, the last trading session closed at $0.5 with a decrease of 7.41%.
CKT’s first attempt at Metaverse – Latest Updates
On 17th December 2021, CTK announced a long-term goal to create a metaverse, combining its strengths in mobile gaming and online literature with help from a variety of sources. CooTek has invested in Lejiu, a Shanghai-based gaming studio that is developing a metaverse game aimed towards female users. Female players prefer to develop their virtual lives by meeting friends and conducting trade transactions while exploring the game-based metaverse, which mainly overlaps with their real-world experience.
Users can submit their own works as home décor, which will be sold in the game as non-fungible tokens (NFTs). Players with a significant fan base may make real money by co-branding items and products with other merchants. Because female audiences are more likely to share, express themselves, and purchase, a broad collection of situations will be generated in the metaverse to meet these demands. Females will undoubtedly have more commercial potential in the virtual world, just as they do in the actual one.
Third Quarter 2021 Financial Results – How was the quarter?
CTK reported on third quarter 2021 results on 8th December 2021. The company announced net revenues of $51.1 million, 52% less than that of $105.7 million in the same period the previous year. Moreover, the gross profit was $42.0 million, 58 percent less than that of the previous year’s estimate of US$98.9 million. The gross profit margin was 82.2 percent, 93.6 percent less than that of the same time the previous year.
The net loss was US$0.4 million and the adjusted net income was US$0.4 million. Lastly, with a concentration on three key categories: online literature, mobile games, and scenario-based content apps, the Company’s portfolio products produced about 99 percent of overall sales.
Despite the uncertainty in the Chinese mobile advertising industry, the company has remained committed to achieving group-level profitability. Moreover, CTK is encouraged with Fengdu Novel’s strong business fundamentals, which have continued to contribute effectively to the group’s total gross margin. Furthermore, the company has been bolstering its presence in the international mobile gaming and online literary industries. Last but not the least, CTK produced and released 14 new mobile games, and has developed a pipeline of 15-20 games in the fourth quarter of 2021, including two significant casual mobile games.