(Yicai Global) May 19 -- Douyu International Holdings and Huya, two Chinese video game streaming giants backed by Tencent Holdings, reported declines in revenue and paying user numbers for the first quarter of the year.

Douyu's revenue fell 17.4 percent to CNY1.5 billion (USD213 million) in the three months ended March 31 from a year earlier, it said yesterday. That beat market expectations. Net profit was CNY14.5 million (USD2.1 million), versus a net loss of CNY86.9 million a year ago.

The number of monthly active users fell 8.9 percent to 50.2 million, and that of paying users plunged by almost 30 percent to 4.5 billion, the Wuhan-based firm said.

Douyu's stock price [NASDAQ: DOYU] closed up 3 percent at USD1.03 in New York yesterday.

Huya released its first-quarter earnings report on May 16. Revenue plunged 20.9 percent to CNY1.9 billion. The firm made a CNY44.8 million profit, compared with a CNY3.3 million (USD468,360) net loss a year earlier.

Between January and March, Huya saw an increase in average mobile MAUs to 82.1 million from 81.9 million in the same period of last year. Meanwhile, the total number of paying users dropped 11.9 percent to 5.2 million.

Since last year, both companies have been cutting costs and taking steps to boost efficiency.

In the first quarter of 2023, Douyu further refined its operating and revenue-generating activities in accordance with its development strategy, Vice President Cao Hao said, and continued to reduce marketing promotion activities, swapping them for a product-driven model to stabilize livestreaming revenue. Douyu is set to explore new avenues of monetization, he said.

Huya stepped up efforts to optimize costs, especially content costs, in the quarter and continued to improve operational efficiency, Finance Vice President Ashley Xin said. "Going forward, we aim to maintain our progress and pursue further gains in cost optimization and operational efficiency," she noted.

The biggest competitive advantage of Douyu and Huya is Tencent’s backing, and its influential e-sports games can ensure an exclusive advantage in the licensing of mainstream e-sports events for the two platforms, Zhang Shule, a game industry analyst, told Yicai Global.

“But without an effective breakthrough, the commercial prospects of game livestreaming can only end there," Zhang pointed out.

Moreover, such sites face competition from all-inclusive video platforms such as Kuaishou, Douyin, and Bilibili.

China's game streaming market will grow 22 percent this year to CNY53 billion (USD7.5 billion), 4.9 percentage points slower than last year', according to digital data media firm iResearch.

Editors: Shi Yi, Futura Costaglione