Banning Free Fire in India is costly for Sea, the parent company of Garena. Although in 2021, Singaporeans increased their profits more than twice, some of the holding’s investors were dissatisfied with the forecast for the next year. During the day, Sea shares fell by 13%.
Sea shared its finances in the reports for the fourth quarter and the whole of 2021.
The main figures for 2021
- The revenue of the entire Singapore holding amounted to $9.95 billion, which is 128% more than in 2020. Its gross profit increased by 189% to $3.9 billion.
Sea revenue and profit change in 2021 compared to 2020If we talk only about Garena, it earned $4.3 billion — an increase of 114% in annual terms.
- Also, Garena has increased receipts (bookings). They increased by 44.3% to $4.6 billion.
- According to the holding’s estimates (based on the data data.ai ), in 2021, Free Fire once again became the most downloaded mobile game worldwide — for the third year in a row. In addition, this battle royale ranked second in the average MAU on Google Play. However, Sea did not give exact figures.
- Free Fire also continues to be the highest-grossing mobile game in Southeast Asia and Latin America.
- The audience of the most popular maps for Free Fire has reached 40 million people by today.
The main figures for the fourth quarter
- The quarterly revenue of the entire Sea amounted to $3.2 billion — an increase of 105.7% year-on-year. Its gross profit reached S$1.3 billion, which is 145.6% more than a year earlier.
Sea revenue and profit change in the fourth quarter compared to 2020Garena earned $1.4 billion in the fourth quarter.
- For comparison: a year ago at the same time, its revenue was only $ 0.7 billion.
- Garena’s revenues amounted to $1.1 billion — an increase of 6.8% in annual terms.
- In the fourth quarter of 2021, the total active audience of Garena games was 654 million people. This is 7.1% more than a year ago, but 10.3% less compared to the third quarter. Recall that in addition to Free Fire, Garena also publishes Call of Duty, Honor of Kings and a number of other games in Southeast Asia.
- During the quarter, 77.2 million people spent money on Garena games. The paying audience grew by 5.6% year—on-year and decreased by 17.6% quarter-on-quarter.
Active and paying audience of Garena games
At the end of the financial report, Sea also published a forecast for 2022, which disappointed some of its investors.
Among other things, the holding wrote that revenues in Garena games could be reduced by one and a half times to $2.9-$3.1 billion. If this happens, it will be the first drop in revenue in the history of Garena. The low forecast of the Sea was associated with the recent blocking of Free Fire in India.
According to Bloomberg, the scale of the decline “came as a shock” to investors. Analysts had previously predicted a drop in developer revenue, but did not expect it to be so serious.
As a result, by the close of trading on the stock exchange, Sea shares sank by 13.12% to $126.5 apiece. It should be noted that this is the second major daily drop for the Singapore holding over the past month. The previous one was in mid—February, just after the Free Fire ban – then Sea shares fell by 18.39%, which reduced the value of the holding by $ 16 billion.
Sea shares have been falling since last October. In total, at the moment the company has fallen in price by $ 132 billion.
Earlier, the Singapore authorities demanded that the Indian government explain the reasons for banning Free Fire in the country along with Chinese applications.