NetEase Inc (ADR)(NASDAQ: NTES) stock lost over 4.5% on August 10^th, 2017 (as of   5:59AM EDT; Source: Google finance) due to pressure in their online games business margins pressure. Gross profit margin for the online games business fell to 63.1% during the quarter from 63.9% in the earlier quarter and 66.2% in the prior corresponding period. Rising contribution from mobile games, with lower gross profit margins, led to this decline. Gross profit margin for the e-mail, e-commerce and others businesses lost to 11.3%, from 14.8% in the first quarter of 2017 and 33.8% in the same period last year. Gross profit margin for the advertising services business improved to 67.6%, from 57.3% in the first quarter of 2017 and 65.5% in second quarter of 2016, driven by their monetization efforts. But this rise is mainly due to seasonality.

The group’s Online game services net revenues surged 46.5% yoy to RMB9.4 billion (US$1.4 billion) during the second quarter of 2017 while Advertising services net revenues surged 12.1% yoy to RMB595.6 million (US$87.9 million).  E-mail, e-commerce and others net revenues enhanced 68.9% yoy to RMB3.4 billion (US$494.2 million) during the period.  Gross profit rose 27.6% yoy to RMB6.7 billion (US$993.7 million) during the period.

Total operating expenses rose 49.2% yoy to RMB3.3 billion (US$491.4 million) during the period. Net income rose 9.2% yoy to RMB3.0 billion (US$438.4 million), while Non-GAAP net income enhanced 7.8% yoy to RMB3.5 billion (US$512.2 million), during the period.

The group enhanced their footprint with Onmyoji, reaching a record of high downloads in Japan and Southeast Asia. They introduced new mobile titles including Land of Glory and Treasure Hunter, both of which were well embraced by China players. PC-client game Fantasy Westward Journey Online and mobile game continue to perform well. The group is seeing more opportunity in China’s mobile market, as well as in overseas markets, and accordingly launching new gameplay options and genres. Their pipeline includes sandbox game Minecraft, Japanese-themed RPGs, as well as Index and Forever 7. The stock generated over 46.3% in this year to date (as of Aug 9^th, 2017; Source: Google finance).