Despite its quick growth during the COVID-19 pandemic, Sea anticipates “headwind factors” for its business from 2022, the firm stated on Tuesday.
More than twice the previous year’s revenue, the Singaporean company offers digital services ranging from online gaming, e-payment, and e-commerce. As of 2021, the reported revenue was recorded at $9.95 billion. However, the net loss grew to $2.04 billion, up from $1.61 billion.
Despite recent quarters of top-line growth across all of Sea’s business units, the company’s CEO has noted a shifting climate. Forrest Li, Chairman and CEO of Sea, spoke to the company’s thriving gaming division during an earnings webcast, saying that they have witnessed some reduction in online activity and variations in user engagement.
Sea’s Free Fire — one of the most played smartphone games in the world — was apparently banned from India last month, along with 53 other apps for security grounds. Chinese applications were the focus of the restriction, but Sea’s most popular game was also affected. India’s “unprecedented government steps” have resulted in the removal of Free Fire from Google Play and Apple’s App Store. Being a populous emerging country, India with an estimated population of more than one billion people, Chi is one of the most important markets for Sea’s gaming company.
Estimated cash spent by players would fall to roughly $3 billion in 2022, from $4.6 billion in 2021, Sea’s gaming business bookings, according to the company’s guidance. At $366.99 a share, Sea is one of just a few Southeast Asian companies registered in the United States, and its share price surged by a nine-fold increase between early 2020 and October 2021 as the COVID-driven stock market boom swept over the globe.
With support from solid investors, the business raised $7 billion in additional shares and notes in September. The money went into expanding the company’s e-commerce operations outside of Southeast Asia to places like Europe and India. Stocks have fallen to less than half their October peak after a sell-off in technology fuelled by global monetary policy moves, but losses are growing.
Revenue from e-commerce is projected to increase from $5.1 billion in 2021 to $9 billion in 2022, according to the business.