Bilibili Inc. (NASDAQ: BILI) Q1 2020 Earnings Call Transcript

Bilibili Inc. (BILI) Q1 2020 earnings call dated May 18, 2020

Corporate Participants:

Juliet Yang — Senior Director of Investor Relations

Xin Fan — Chief Financial Officer

Rui Chen — Chairman of the Board of Directors and Chief Executive Officer

Carly Lee — Vice Chairwoman of the Board and Chief Operating Officer

Analysts:

Jialong Shi — Nomura — Analyst 

Lei Zhang — Bank of America — Analyst

Alex Liu — China Renaissance — Analyst 

Wendy Chen — Goldman Sachs — Analyst

Alex Poon — Morgan Stanley — Analyst

Presentation:

Operator

Ladies and gentlemen, good morning and welcome to the Bilibili 2020 First Quarter Earnings Conference Call. [Operator Instructions]

At this time, I would now like to hand the conference over to Juliet Yang, Senior Director of Investor Relations. Please go ahead.

Juliet Yang — Senior Director of Investor Relations

Thank you, operator. Please note, the discussion today will contain forward-looking statements, relating to the Company’s future performances, and are intended to qualify for the Safe Harbor from liability, as established by the US Private Securities Litigation Reform Act. Such statements are not guarantees of future performances and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risk factors are beyond the Company’s control, and could cause actual results to differ materially from those mentioned in today’s press release and this discussion.

A general discussion of the risk factors that could affect Bilibili’s business and financial results is included in certain filings of the Company with the Securities and Exchange Commission. The Company does not undertake any obligation to update this forward-looking information, except as required by law.

During today’s call, management will also discuss certain non-GAAP financial measures, for comparison purposes only. For a definition of non-GAAP financial measures, and a reconciliation of GAAP to non-GAAP financial results, please see the 2020 first quarter financial results news release issued earlier today.

As a reminder, this conference call is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the Bilibili investor relations website, at ir.bilibili.com.

Joining us today on the call from Bilibili’s senior management are Mr. Rui Chen, Chairman of the Board and Chief Executive Officer; Ms. Carly Lee, Vice Chairwoman of the Board and Chief Operating Officer; and Mr. Sam Fan, Chief Financial Officer.

And I will now turn the call over to Mr. Fan, who will read prepared remarks on behalf of Mr. Chen.

Xin Fan — Chief Financial Officer

Thank you, Juliet. Thank you, everyone for participating in our 2020 first quarter conference call. I’m pleased to deliver today’s opening remarks on behalf of Mr. Chen.

2020 is off to a remarkable start. We are proud to deliver stellar results and set new records within our key operating and financial metrics. For the first quarter, our MAU grew by 70% year-over-year, reaching 172 million, and our mobile MAU grew even faster at 77% year-over-year to 156 million. Our user engagement level also reached a new height. Our DAUs achieved a major milestone, up 69% year-over-year to 51 million. Along with our large user numbers, we saw a striking increase in the amount of daily time spent on our platform, up 10 minutes from Q4 to an average of 87 minutes. This is the highest level we have seen in our corporate history. These statistics once again demonstrate our strong execution and high quality growth we aim to deliver.

We attribute our success to our increasingly broad content, friendly and a sticky community, as well as improved brand awareness. Building on the success of our New Year’s Eve Gala event, we welcomed more new users, especially during the extended winter holiday. Bilibili is becoming many people’s first choice when it comes to content creation and consumption. In 2019, we affirmed user growth as one of our key objectives, and raised our target MAUs for 2021 to 220 million. We are pleased to say with the solid execution on our initiatives, we are on a fast track to meet this target.

As we roll out more premium content and services, and strengthen our monetization capabilities, we are converting more traffic to paying users. Our MPUs grew by 134% year-over-year to an impressive 13.4 million in the first quarter. The paying ratio also grew to 7.8%, more than doubled from two years ago. Our revenues reached an all-time high of RMB2.3 billion, surpassing the top end of our guidance by more than — over RMB100 million. As our top line expands, we have seen increasing operating leverage. Gross margin jumped to 23% in the first quarter, up from 14% for the same period last year, marking the fourth consecutive quarter of margin improvement.

Our strategic partnerships are also expanding. On the heels of our agreements with Tencent and Alibaba, we were excited to bring our long-standing partnership with Sony to the next level with its $400 million equity investment and business collaboration plans. Under the agreement, we plan to bring even more world class anime and mobile game content to the domestic market, further enhancing our advantage in these sectors. The equity investment will not only fuel our future growth, but also demonstrate Sony’s confidence in our unique positioning and growth prospects.

With that overview, I’d now like to walk through some of our initiatives and the trends we are seeing in each of our core areas of content, community and commercialization, and how they fit into our long-term strategy.

I will begin with content. Bilibili has cultivated one of the most attractive and friendly environments for our creators. Creators can easily upload content, actively interact with users and gain broader fan base access. For these reasons, Bilibili has become many people’s first choice for PUGV creation, especially during the extended winter holiday, when more people were looking for ways to express themselves. We saw a significant increase in the number of active content creators and video submissions during the first quarter. We had about 1.8 million content creators uploading 4.9 million videos per month, representing increases of 146% and 138% respectively, both year-over-year.

With a growing number of creators and effective operational campaign, we are gaining even more diverse and innovative content submissions, and further increasing our mass market appeal. For the first quarter, our most heavily trafficked verticals were Lifestyle, Game, Entertainment, Animation, Tech & Knowledge. For Lifestyle, during the extended holiday, people were looking for ways to entertain themselves while staying at home. We actively promoted sub-categories such as Foodie, Online Fitness and Vlog, as many people looked for ways to cook, stay fit, and express themselves. Similarly, Games overtook Entertainment vertical as we fortified our game content library, becoming the host for more and more gamers. With our recent partnership with Tencent Music and Sony Music, our music content is also attracting a growing amount of traffic given its universal appeal. In addition, we expanded our technology and education categories in order to support those looking to catch up on their studies, learn a new skill or simply gain more general knowledge during the long holiday.

Turing to our OGV business. Building on our years of investment and key leadership in this — in anime, documentary and other categories, we continue to turn our OGV library into valuable IP assets, attracting new users, as well as converting paying users. During the first quarter, we launched The Daily Life of Immortal King [Foreign Speech], a Bilibili-produced Chinese anime series. This high quality series quickly gained over 100 million video views in less than 30 days, setting a new record for our OGV history. It not only attracted many new anime fans to our platform, but also converted a considerable amount of premium members.

Similarly, we further expanded our documentary and variety show offerings to attract broader audiences. Our reality show Animal Hospital Season 2, [Foreign Speech] and First Man Out of China [Foreign Speech], a documentary that we co-produced with Discovery, were also welcomed by many pet and survival show lovers, respectively.

Turning to our community. As I mentioned, we are seeing record highs across all of our primary user metrics. With this rapid influx to our community, the quality of our platform, our content, our users has gotten even stronger. In the first quarter, our daily video views reached a record high of 1.1 billion, up 113% year-over-year. Our users were more engaged with content and each other than ever before, and our overall community retention levels were improved. In the first quarter, our users generated nearly 4.9 billion monthly interactions through bullet chats, comments, likes and Bilibili moment posts, more than triple the amount from the same period in 2019.

Members of our official membership also grew at an accelerated pace in the first quarter. By the end of Q1, we had 82 million official members who passed our 100 question exam, up 66% year-over-year. And the 12-month retention rate for these users remained high as well, well above 80%. The strong community engagement and retention level continue to be the excellent indicators of the quality of our user growth.

Turning to our commercialization progress, I’ll first review the status of our game business. Revenues from our games increased 32% year-over-year to RMB1.15 billion, accounting for 50% of our total first quarter revenues. Fate/Grand Order, or FGO, delivered a robust performance for the period, following a major content update. Other exclusively licensed titles such as Azur Lane and Furious Yama also continued their popularity during the first quarter. In April, we launched the highly-anticipated Japanese RPG Princess Connect [Foreign Speech]. This exclusively licensed game was an immediate hit, attracting millions of players and topping China’s iOS download and grossing charts within a week after release. The phenomenal success of the release once again proves our strong distribution power and deep understanding of the ACG games market.

Our jointly operated games also continued their growth momentum in the first quarter. Newly released updates of Arknights [Foreign Speech] and [Foreign Speech] were welcomed by many existing and new players. With an increasing number of gamers gathering and more efficient distribution operations, our platform is an inevitable channel for game developers who want to maximize their exposure to quality players and reach potential new fans.

Later this year, we’ll be further expanding our game offerings with 30 high quality games in our upcoming game pipeline, we’re looking forward to further diversifying our portfolio. We have eight titles that have acquired approvals and are scheduled to be released in the coming months. This includes Animistic, [Foreign Speech], a thrilling ACG title that we plan to roll out this summer. On the jointly operated games front, we will continue to work with leading game developers to bring our users premium games such as Mihoyo’s Genshin and NetEase’s Harry Potter.

Turning to our VAS business. Revenues from VAS increased by 172% year-over-year reaching RMB794 million in the first quarter. Our growth was mainly driven by increased contribution from premium member [Phonetic], live broadcasting and other value-added services. As part of our video content ecosystem, we continued to enrich our live broadcasting offerings and increase our live broadcasting penetration among our growing user traffic. Our investment of top live broadcasting IP continue to fuel our user growth and attract more live broadcasting hosts to our platform. We are seeing more talent agencies and individuals turn to Bilibili to grow their influence on our fast developing platform.

With access to — access to our exclusive [Technical Issues] members have become accustomed to paying for high quality content. By the end of the first quarter, our premium memberships reached an exciting milestone, exceeding 10 million, for a record 10.9 million subscribers. This represents an increase of 127% year-over-year, and further demonstrates that our users represent the golden cohort with a high willingness to pay for premium entertainment material.

As for our advertising business, our rapidly growing community and increasing brand equity, continues to make Bilibili, a leading platform for advertisers. Despite macro headwinds, revenues from our advertising segment continued to increase year-over-year, up 90% to RMB214 million in the first quarter. The leading three industry verticals for brand advertising were e-commerce, games and 3C products. And the top three verticals for performance-based ads were games, education and e-commerce.

Advertisers are seeking out new and innovative ways to increase their visibility, and online channels represent a popular, heavily trafficked avenue. Beginning from this year, we hosted multiple online new product launch conferences including Huawei, Vivo, Oppo and McDonald’s. We expect this offline-to-online marketing transition [Phonetic] will continue throughout the year. Advertisers in other industries such as online education and e-commerce are also seeking out our platform to increase their brand reach.

To summarize, we had an outstanding first quarter, marked by excellent growth across our primary operational and financial metrics. The success was attributable to years of devotion in building a healthy content ecosystem, friendly community, and improved commercialization capabilities. We are also pleased with our strong execution in raising our brand awareness, growing our user base as well as forming high-level strategic partnerships. Building on this early 2020 momentum, we will continue our user growth strategy, improve our top line and drive value for all of our supporters, our growing community and our stakeholders.

This concludes Mr. Chen’s remarks. I will now provide a brief overview of our financial results for the first quarter of 2020. Our total net revenues increased by 69% year-over-year to RMB2.3 billion, exceeding the high end of our guidance. With a 50-50 revenue split from our game and non-game businesses, we are pleased with our commercialization progress and the implications of this diversity. We are also converting more and more online traffic to paying users. The average number of monthly paying users increased by 134% year-over-year, reaching 13.4 million in the first quarter.

Cost of revenues increased by 51% year-over-year to RMB1.8 billion. Revenue-sharing cost, a key component of cost of revenues, was RMB889 million, a 61% increase from the same period in 2019. Gross profit increased by 180% year-over year to RMB530 million. We’re also starting to see operating leverage from our diversified revenue streams. With more revenue contribution from our higher margin businesses, as well as additional income from paying users, our gross profit margin continued to improve, reaching 23% in the first quarter.

Total operating expenses increased to RMB1.1 billion, up 117% from the same period in 2019. Selling and Marketing expenses were RMB606 million, representing a 234% increase year-over-year. The increase was primarily attributable to the increased channel and marketing expenses associated with Bilibili’s app and brand, as well as expenses for the Company’s mobile games and the sales and marketing personnel. Building on the success of our New Year’s Eve Gala, and strong user demands during the extended holiday, we made additional investment in branding and channels to further drive user growth and raising brand awareness, which we believe will yield considerable return in a long run.

G&A expenses was RMB171 million, representing a 33% increase year-over-year. The increase was primarily due to increased headcount in general and administrative personnel and increased share-based compensation expenses. R&D expenses were RMB297 million, representing a 60% increase year-over-year. The increase was primarily due to increased headcount in research and development personnel.

Net loss was RMB539 million for the first quarter of 2020, compared with RMB196 million in the same period of 2019. Adjusted net loss, which is a non-GAAP measure that excludes share-based compensation expenses and amortization expense related to intangible assets and acquired through business acquisitions was RMB475 million compared with RMB145 million in the same period of 2019.

Basic and diluted net loss per share were RMB1.62. Adjusted basic and diluted net loss per share were RMB1.46 — RMB1.43, sorry. As of March 31, 2020, before Sony’s investment, we had cash and cash equivalents, time deposits, as well as short-term investments of RMB7.9 billion, or $1.1 billion, compared to RMB8.1 billion as of December 31, 2019. To further grow our business, we plan to improve our monetization by leveraging our considerable and growing traffic. We also see benefit in further expanding our diverse revenue streams and continuing to improve our paying ratio. Longer term, we believe our monetization efforts, high paying user conversion rates and scale will yield an improved bottom line.

With that in mind, we are currently projecting net revenues for the second quarter of 2020 to be between RMB2.50 billion and RMB2.55 billion. Thank you for the attention. We would like now to open the call to your questions. Operator, please go ahead.

Questions and Answers:

Operator

Thank you, ladies and gentlemen. We will now begin the Q&A session. [Operator Instructions] Okay. So your first question today comes from Jialong Shi from Nomura. Please ask your question.

Jialong Shi — Nomura — Analyst

[Foreign Speech] Congratulations on a very solid quarter. My question is about MAU. We saw a big acceleration in this quarter. Could management give us some colors on how much of the growth was driven by the pandemic in 1Q and how much was organic? And as light in China is getting back to normal, how should we look at the trend of your MAU growth post the pandemic? For the new users hired in the quarter, how is their engagement level compared to those of old users? Lastly, for China’s PUGV market, could you give us some colors on what would be the size of the user base this segment could potentially reach? Thank you.

Rui Chen — Chairman of the Board of Directors and Chief Executive Officer

[Foreign Speech] Your first question on the MAU, indeed, we had an outstanding first quarter in terms of user growth. And we believe that user growth is based on two factors. One is 10 years of devotion and dedication in building a healthy content ecosystem and friendly community to ensure that we always have the highest quality content to offer to our users. And second of all, is our continuously raising brand awareness and our active impressive user acquisition strategy.

[Foreign Speech] Probably we have already experienced that, Bilibili has become not only for the younger generation, but more for mass-market people’s first choice when it comes to content creation or content consumption. And there’s more and more chatters about what type of videos you’ve seen on Bilibili.

[Foreign Speech] So all of these factors that we’ve mentioned above actually has nothing to do with the extended holiday result by the pandemic. [Foreign Speech] So we believe the pandemic only helped us to accelerate our user growth process, but it will not change or become a main factor of how our users grow. [Foreign Speech] So regarding your second question about how the MAU is trending after people are returning back to school or work. So, as I mentioned earlier, the accelerated user growth that we’ve seen in the first quarter has more to do with the fundamentals of our Company and the extended holiday only helped us to accelerate our process. So we’re still quite confident that in the second and third quarter, we’ll still see — we’ll still be seeing relatively decent rate of user growth.

[Foreign Speech] So in terms of the new user profile that we’ve seen in the first quarter, it has — there’s no big difference between the new users and the old users. There’s still majority young — younger generation. Their average age is around 20 years old. And over 50% of the new user comes from very third — third-tier cities or below.

[Foreign Speech] So in terms of user growth, we never just purely focus on the quantity, but we always put the quality first. As you can see from the user matrix, our MAU grow 70% year-on-year. Our DAU also grow 69% year-on-year. And our time spent for DAU increased 10 minutes quarter-over-quarter to 87 minutes per day, and our video views surpassed 10 billion, reaching 1 — I’m sorry, past 1 billion, reaching 1.1 billion on a daily basis. And the overall retention rate and engagement level of our user base is also very, very strong. The 12-month retention rate of our official members who take and passed the 100-question test, they are also well above 80%. All of this matrix was achieved under the environment as the overall user increased significantly. So this is another set of results that demonstrate our quality of growth.

[Foreign Speech] So at the same time, as you can see, our paying users are also experiencing very fast growth. Our paying user has reached over 13 million this quarter, which means we’re converting more traffic to paying users. So this is another very strong matrix that supports the quality growth. [Foreign Speech] So according to the latest CNNIC report, the overall Chinese video user has already reached 860 million. As the adoption of 5G technology, we believe video will become the most common format of content consumption or creation. By that time, we believe the overall video user is probably going to be equivalent for the overall Internet users.

[Foreign Speech] So the reason why we call PUGV, PUGV is the professional part of the terms, because it’s professionally produced. So it has higher quality. We don’t believe anybody will say no to higher quality video content. And because of that, we think that all the video users could potentially be PUGV users. [Foreign Speech] So we believe in the near future, everything will be video-lized, which is a great opportunity for Bilibili. And from what we have observed that we believe video is not just pure content or communication, it has become as a service or as a scenario or an important part of entertainment. Based on what we have seen so far, there’s a trend that everything, marketing-related has become more video-lized. And there are tons of users, are studying, learning new things, gaining general knowledge on Bilibili. So this video become a format of gaining knowledge. And in the longer-term, we believe, video is going be the new connector that connects everything. Hope that answers your question, Jialong.

Jialong Shi — Nomura — Analyst

Yes, indeed, and thanks very much for the color.

Operator

Your next question comes from the line of Lei Zhang. Please ask your question, Lei.

Lei Zhang — Bank of America — Analyst

[Foreign Speech] My question is mainly about the commercialization of non-game business. We have seen strong revenue growth in fourth quarter of non-game, especially less and we also noticed some positive business development recently in music and live streaming. Could management share more color on the efforts we have made in non-game business, especially our policy with live streaming? And also wondering your growth outlook in non-game business in live streaming and advertisement in 2020. Thank you.

Rui Chen — Chairman of the Board of Directors and Chief Executive Officer

[Foreign Speech] So we haven’t changed our concept in our non-game business plan or strategies since our IPO. [Foreign Speech] So from every part of our live broadcasting business, we’ve always emphasized live broadcasting for Bilibili as an ability. It’s based on current view content ecosystem, and we have massive users gathering around Bilibili content, live entertainment content, such as animation and other professionally generated content, where we launched our premium membership services to satisfy their growing needs. And if I have to talk about our strategy, again, it still come back to the same logic that we have, the user, we understand the need and we recommend the right products to suit their right needs.

[Foreign Speech] And our strategy is always to attract massive loyal engaged users through PUGV at the same time to provide them live broadcasting content, professional OGV content to satisfy their growing needs. [Foreign Speech] So in terms of the growth potential of our VAS business, we believe for many years to come, we will maintain a high growth rate for a relatively longer term, to be more specific, regarding the high growth rate will be over 100%. [Foreign Speech] So we avoid using monetization when we talk about our commercialization progress, is because, we believe essentially, our commercialization process is providing user better services for more premium content. This is beneficiary for our users.

Operator

Okay. Your next question comes from the line of Alex Liu from China Renaissance. Please ask your question, Alex.

Alex Liu — China Renaissance — Analyst

[Foreign Speech] Thanks for this opportunity. My question is on sales and marketing spending. Could management provide us some breakdown, this quarter’s sales and marketing expenses? And also could management share more updates on this year’s brand image upgrade, considering our recent platform branding initiative resulted in a pretty heated discussion among users? Thank you.

Xin Fan — Chief Financial Officer

Okay. Alex, I will take your question and Carly will add more color about the upgrades. As Chairman Chen Rui mentioned, our user growth is still the top priority of our business in this year. So it’s also the cornerstone of our commercial monetization progress. So if you look at the — all the numbers, the main component for our marketing expense is, there are channel promotion, the channels like app store, as well as some feedback channel and our brand obliquity activities, as well as for our game release and promotions and our sales staff salary bonuses.

The incremental part, if we compare that with our Q4 numbers are mainly for the channel promotion and brand activities. We don’t set a very specific market cost target for financial purpose. But instead, we monitored all the ROIs very closely to ensure the high quality user growth. And the decision will be made according to both of the quality and quantity observations on all the newly added users, including the activity, the great, for example, the DAU, their retention level, time of spend, and average daily VV [Phonetic] and the numbers of their interactions.

When the market opportunities comes and the ROI are found reasonable and we will continue to invest. At the same time, with deepening our commercialization progress, the new users we see, they also effectively converted into our paying users. In Q1, MAU cost increased by 70% year-on-year, but the number of paying users increased over 130% year-over-year and the overall paying ratio also improving. So that demonstrates that we still have room to raise our paying ratio as it get better long-term return from our UG strategies. And the users growth will also lead to the growth of the top line, you will see that the leverage is still there. The top line increased by, I think, 69% in Q1 and our gross profit increased by 180%.

So that means, we just need to accelerate our commercialization progress to get a better return from our investment. So currently, we have over 10 billion cash reserve after Sony’s capital injection. And all the strategic shareholder, they are still very supportive for our user growth strategy. And generally, in Q1, we still generate positive operating cash flow and actual cash burn for Q1 just like RMB200 million, which are much less than the loss recorded in our P&L payment. So the financial status is quite healthy. We believe the market is still booming and the opportunity is still there. So we’re just on the right track to catch those kinds of opportunities. So I will let Carly to comment about the brand upgrade profile.

Carly Lee — Vice Chairwoman of the Board and Chief Operating Officer

[Foreign Speech] So as you can — already aware, user growth will be our primary focus for 2020, and we have set up a comprehensive plan to grow our user in 2019 last year, that includes to raise brand awareness and to correct, by some mis-perception of how our brand represents or some of our content vertical represents in, among users or content consumers. [Foreign Speech] So from late last year, we have tried some independent marketing campaign, some of the events you probably already be very aware. One is the — our investment in the World Championship League of Legends and our New Year Eve Gala, and the most recent, the Youth Day campaign regarding the new generations, and all of that have echoed strongly with our existing and potential users.

[Foreign Speech] In addition, we’ll also actively promote our content verticals within Bilibili ecosystem such as studying, such as blogs, letting people know this is the go-to-platform to consume those content verticals. This is also helping us to raise more brand awareness and platform awareness. [Foreign Speech] So from the Q1 operating data, it’s already pretty obvious that the efforts and initiatives that we take has quite significantly raised our brand awareness and the influence among internet users that age between 16 to 35. And we have taken great pride of what we have done so far. [Foreign Speech] So going forward, we’ll continue to promote our brand through online and offline campaigns, we’ll create festival, create more events and we’ll continue to educate our users about our categories and our content offerings.

[Foreign Speech] So going forward, we’re going to launch a serious of campaign in terms of raising our brand awareness, brand mission and positioning through bunch of online and offline activities. And the time — timeline will be surrounded with several important timestamps, for example, the graduation season and Bilibili’s anniversary as well as summer vacation.

[Foreign Speech] So tomorrow, on March 20th, it is also a very interesting time of the year, we will collaborate with famous singer, Mao Buyi, to launch a graduation theme song called [Foreign Speech] to dedicate that — to dedicate the song to the new generation that is about to graduate from schools and enter the society, and we quite look forward to that to meet everybody.

Alex Liu — China Renaissance — Analyst

[Foreign Speech]

Operator

Your next question comes from the line of Wendy Chen from Goldman Sachs. Please ask your question, Wendy.

Wendy Chen — Goldman Sachs — Analyst

[Foreign Speech] Thank you, management for taking my question. My question is related to the mobile game business. So just a follow-up on the previous question, how do we foresee the mobile game business growth for the coming quarter, considering many gamers potentially have resumed work and school with potentially reducing gaming time? And my second question is regarding, since we’re doing some very innovative campaigns to market our new title, Princess Connect, wondering we will utilize such a marketing toolkit for the future games to be launched? And lastly, wondering management can share your insight on our strategic cooperation with Sony in term of the game business? Thanks very much.

Rui Chen — Chairman of the Board of Directors and Chief Executive Officer

[Foreign Speech] So we actually don’t believe the whole pandemic has big influence on our game business. Actually, we are quite confident throughout the rest of the year with our game business, we currently have 30 games, exclusively licensed games in our pipeline. Eight of those already acquired approval and majority of those pipelines are domestic titles and relatively smaller scales are from imported titles. So it’s a very healthy component.

[Foreign Speech] So the success of Princess Connect, we believe this is another strong testimony of our strong distribution of power and our people understanding in terms of ACG games. And before the game was launched, the game had over 6.5 million preregistered users. And since its release on April 16th, it has topped on the China’s iOS top downloading charts for a week and top grossing — and reached the number two on top grossing. And based on our strong execution, we believe this is a very, very successful event and very successful. [Foreign Speech] And based on the existing data and feedback that we have received, we believe this is going to be a title with very long lifecycle probably over three years.

[Foreign Speech] So, as I mentioned, the Princess Connect is another strong testimony of our distribution power in terms of ACG games, and we are becoming the inevitable channel in China to launch ACG-related titles. And we believe this advantage will further expand our overall community is getting bigger and our overall user in-game are becoming more and more active. [Foreign Speech] And going forward, with — some more with how we expand our content verticals, we’ll also seek to expand our game offerings into more high quality content, high quality titles, and we are quite confident this will also be very successful as well.

[Foreign Speech] So we indeed has a — have a longstanding relationship with Sony. Before the equity investment, we already are working with them on multiple business aspect, including animations and games. And with a strategic partnership, we are going to further solidify and bring our partnership to the next level in terms of animation and mobile games.

Carly Lee — Vice Chairwoman of the Board and Chief Operating Officer

[Foreign Speech] Sure. Carly want to add something on. So first of all, Sony is the world leader in terms of entertainment and technology. And Sony’s strategic investments really demonstrate their confidence in Bilibili’s growth potential and our unique positioning in the train of entertainment market. And on top of the animation and games, Mr. Chen mentioned that we are also hoping to work with Sony on other aspects, including the — including music, as well as movies are hoping to really bringing more world-class premium content to satisfy our growing user needs.

Wendy Chen — Goldman Sachs — Analyst

[Foreign Speech]

Operator

And your next question comes from Alex Poon from Morgan Stanley. Please ask your question, Alex.

Alex Poon — Morgan Stanley — Analyst

[Foreign Speech] I’ll translate my question. My first question is regarding MAU target. As we already achieved more than 170 million MAUs in first quarter, should we expect to revise up to full year target and also next year? My second question is related to PUGV competition. There are many more platforms, allowing content creators to upload platform and they also provide a lot of easy tools and cash returns to these content creators. So how do — how should we see the ROI of PUGV In future? Thank you.

Rui Chen — Chairman of the Board of Directors and Chief Executive Officer

[Foreign Speech] Okay. Regarding first question on the user target, we are confident to say, we are — we will achieve our user target in advance. When we get there, we’ll talk further about raising our user target. And your second question about the competition. I think, the essential — the foundation of your question relies on how we are able to keep our content creator, or essentially how we are able to grow our content creators. And as you can see from our Q1 data that, actually, we have experienced a very fast growth in terms of our active content creator and their content creation, and number of content creator with more than over 10,000 followers, or the growth rate is also expediting.

All of that means, we have cultivated a very healthy ecosystem that allows our content creators to grow on our platform. And the message behind that is to truly respect the high quality content and we expect the high quality content creators always put the quality in our priority. It’s much easier said than done. You have to present that principle, we’re over 10 years, and to make sure this mechanism that helps you keep attracting and retaining those users. So that you can — as you can see actually, those top content creators are staying with us and growing with Bilibili. And that’s — I think that’s the key competitive edge Bilibili has compared with other competitors.

Operator

And that concludes the question-and-answer session for today. I would now like to hand the conference back over to management for any additional or closing comments.

Juliet Yang — Senior Director of Investor Relations

All right. Thank you once again for joining us today. If you have any further questions, please contact myself, Juliet Yang, Bilibili’s Senior IR Director or TPG Investor Relations. Our contact information for IR in both China and the US can be found on today’s press release. Have a great day.

Operator

[Operator Closing Remarks]