Vietnamese online gaming giant VNG has reported Jan-Sept 2018 profits of VND152 billion ($6.5 million), a 52 percent year-on-year slump. The company has said in its third-quarter financial statement that higher expenditures have eaten into its profits.
Selling and administrative expenses of VND853 billion ($36.7 million) and VND382 billion ($16.44 million) respectively in the nine-month period marked a 72 percent and 27 percent year-on-year surge.
At its recent annual meeting, the company’s management board had predicted a sharp drop in profits compared to previous year as the company wanted to focus resources on investment in strategic products and diversify operations.
The company focuses in four main areas: e-wallet, mobile product development, ecosystem building, and e-commerce.
VNG has set a revenue target of over VND5 trillion (more than $215 million) for this year, 17 percent higher than in 2017.
However, after-tax profit is expected to only reach VND549 billion ($23.62 million) compared to VND938 billion ($40.36 million) in 2017.
VNG, which used to be known as VinaGame, also owns major news site Zing, popular music site Zing MP3, instant messaging app Zalo, and e-commerce site Tiki.
Tiki, VNG’s largest investment in e-commerce, continues to suffer increasing losses. In the first half of this year, Tiki’s losses of VND102 billion (nearly $4.39 million) were more than double the same period last year.
The cumulative loss of this e-commerce site has reached nearly VND600 billion (about $25.82 million) after seven years of operation, beginning in 2010.