CTK stock rose on December 2, 2021, after the company announced heavy investments for the upcoming Metaverse.
CooTek Announces New Business Strategy Focus on Metaverse and NFT
CooTek (Cayman) Inc. (NYSE: CTK) (“CooTek” or the “Company”) announced that the Company has been focusing on developing immersive digital content and interactive game products related to Metaverse, and building up the digital content copyright system based on NFT (Non-Fungible Token), cryptographic assets on blockchain. The Company will establish its proprietary IP, technology and product systems, and deploy in the fields of Metaverse and NFT as the company’s long-term development strategy.
CooTek is a mobile internet company with a global vision that offers content-rich mobile applications, focusing on three categories: online literature, scenario-based content apps and mobile games. CooTek’s mission is to empower everyone to enjoy relevant content seamlessly. CooTek’s user-centric and data-driven approach has enabled it to release appealing products to capture mobile internet users’ ever-evolving content needs and helps it rapidly attract targeted users.
In-App Advertisement Model Benefits CooTek’s Mobile Games to Grow Exponentially
SHANGHAI, Nov. 9, 2021 /PRNewswire/ — As Chinese game developers rush to compete overseas, CooTek (Cayman) Inc. (NYSE: CTK) (“CooTek” or the “Company”) has chosen to focus on the simple and fast casual games, thus avoiding a head-to-head competition with the established companies.
Investing in mobile games is an important attempt made by CooTek while pursuing its entertainment content strategy. Starting off as an intelligent mobile keyboard application developer, CooTek has shifted its focus to building a content ecology based on mobile games, online literature and multi-scenario content after its IPO on NYSE in 2018. Nowadays, content-based products have become CooTek’s main source of revenueThe income statement provides a summary of a company's revenue and expenses over a specified period of time, typically a year or a quarter. It shows the company's total revenue, th....
The company’s financial data have shown that its mobile advertising revenue mainly comes from mobile games and online literature. In the second quarter of 2021, 37% of the revenue came from online literature, while the mobile game business contributed 55%. According to Mr. Lu, Head of Overseas Game Business of CooTek, the company has started exploring the overseas game industry since the second half of 2019. The casual game industry has a high short-term return on investment, which can greatly improve the cash flowThe cash flow statement provides a detailed overview of the cash inflows and outflows of a company over a specified period of time. It includes cash received from operations, inves... of the company.
In the second quarter of 2021, CooTek launched the hyper-casual game, Catwalk Beauty, which subsequently topped the App Store and Google Play game charts in 58 countries and regions, including the US. In the first 3 months, the game churned out nearly $3 million in gross profit, generating an overall return on investment of over 200%. The hit game Catwalk Beauty developed by Smillage topped the GP charts of 26 countries since it was launched, creating substantial revenue to CooTek this year. And in the third quarter of this year, Truth Runner, another parkour game following the lead of Catwalk Beauty. A week into its debut, Truth Runner topped the U.S. IOS game charts.
CooTek’s mobile game business revenue grew 25% QoQ in the second quarter of 2021. Such a strong improvement in profitability should be attributed to the optimized In-App Advertisement (IAA) model.
IAA model is a profit model mainly adopted by hyper-casual games. Compared to the In-App Purchasing (IAP) model, IAA is a simple, fast yet short-lived mechanism that relies on ad profits. The profitability of the IAA model is heavily dependent on user acquisition, either from internal sources or other platforms.
“The threshold of producing hyper-casual games is not high. Among the mass production, only when the conversion rate reaches a certain level and the cost per install (CPI) is low enough, for example, $0.2-0.3 per installation, that we can consider it a feasible idea and put it into action,” Lu explained.
Take Catwalk Beauty as an example, during the testing period, the CooTek team turned the “catwalk” idea into a demo for trial. The results showed that the conversion rate of the demo was very high and stable. The team then completed the development of the game within a few weeks. “There were about 20 core themes of the game, and the team was able to deliver one every day. So that’s why we were able to launch it so quickly.”
Meanwhile, CooTek is designing its own ad placement system. “We have been closely working with some developers, which means that our team members are actively involved in their projects, as well as the designing of a standardized process and platform.” Lu said.
Truth Runner: Another Top Ranked Mobile Game of CooTek
On September 16, 2021, as a dark horse in the list of US IOS games — a week into its launch, Truth Runner has already risen to the top and is still charging ahead. This hyper-casual parkour game developed by Taptek, a game studio invested by CooTek (Cayman) Inc. (NYSE: CTK) (“CooTek” or the “Company”), has laid an excellent foundation for the Company’s upcoming game releases in the second half of the year.
Truth Runner is a creative parkour game targeting female users. Besides the parkour and dress-up elements inherited from CooTek’s previous hit, Catwalk Beauty, Truth Runner also allows players to choose their own parkour outfit based on the result of a personality test. A personality report is generated at the end of the game, which proves to be an appealing feature to numerous light game lovers of Generation Z.
In order to attract potential players, the game offers bright visual effects and personality/fortune tags in the personality test, which are designed to use memes in the popular culture. In the fortune-telling part, the creative team at Taptek has included many trending elements that are of interests to the Gen Z players, e.g., romantic relationship, weight, money, etc., making the game a trending topic on social networks. On YouTube, a large number of users have shared the screen recordings of their test results, which have also brought more traffic to the game.
For CooTek, mobile gaming is a crucial part of its recreational content roadmap. The Company’s experience and growth potential have enabled constant product incubations and iterations. The light, fast and mini-sized games developed by Cootek are widely popular among people with modern and fast-paced lifestyle. The in-depth and comprehensive strategy adopted by CooTek’s game business has also encouraged its invested games studios to create numerous hit games. As to the team behind Truth Runner, Taptek, its capabilities and resources in game design, localization, optimization and ROI have helped it accumulate creative ideas and explore the games best catered to the local users.
It has been the key objective of CooTek to create high-quality games with max user value. Taptek is still working on the game’s optimization and localization to launch in other overseas markets. It is believed that Truth Runner will keep its lead in the mobile gaming race.
CTK stock technical analysis
In the last month CTK has a been trading in the 0.65 – 1.18 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above. Considerably lower volume is observed in the last couple of days. The short term trend is negative, as is the long term trend. The technical rating of CTK is bad and it also does not present a quality setup at the moment. Prices have been extended to the upside lately. For a nice entry it is better to wait for a consolidation. Click here to sign up for email alerts on when CTK stock is a good entry.