Chinese videogame giant NetEase returned to profit growth in the fourth quarter, in a sign that its online-gaming business is turning a corner.

Net profit rose 33% to 8.77 billion yuan, equivalent to $1.20 billion, NetEase said Thursday, beating the 7.70 billion yuan estimate from a FactSet poll of analysts. Its adjusted net profit, a closely watched metric that excludes share-based compensation expenses, rose 31% to 9.68 billion yuan.

The Hangzhou-based company’s revenue fell 1.4% to 26.75 billion yuan but was slightly better than analysts’ expectations. While sales from games and value-added services increased 1.5% from a year earlier, the top line was weighed by its music subsidiary and education-technology unit Youdao.

NetEase’s PC games have continued to support overall gaming revenue on the resumption of popular Blizzard titles. However, its mobile game revenue, accounting for more than 60% of total gaming revenue, remained soft.

NetEase launched its long-anticipated titles “Where Winds Meet” and “Marvel Rivals” in December. The latter, a free-to-play game, gained solid traction from the hero shooter space, boasting over 40 million users to date, it said.

Analysts said ahead of the results that NetEase’s online-gaming business has likely bottomed out, and revenue growth could improve as the new titles pave the way for stronger momentum.

NetEase’s Hong Kong-listed stock lagged behind its peers in 2024, finishing the year 1.6% lower, while shares of industry leader Tencent jumped 42%. A lack of blockbuster new titles and soft revenue from legacy titles, such as “Fantasy Westward Journey” following in-game adjustments, have weighed on investors’ confidence.