Posted September 08, 2018 14:20:40After its announcement in September 2016, the world’s top gaming network, Reddit, has experienced a significant growth in popularity in recent years, and it has managed to maintain that popularity despite the fact that it’s not a top tier gaming network.
In fact, the community, which boasts over 2 million members, was able to grow exponentially thanks to a dedicated team of dedicated developers.
In the years since the network launched, the number of active Reddit users has steadily increased, reaching over 2.6 million on January 1, 2018.
According to an analysis conducted by Australian financial newspaper The Australian Financial Press (AFFP), the network has had an exponential increase in membership in recent times, with the network growing from 1.7 million active users in 2017 to 2.3 million users in 2020.
While Reddit’s growth is impressive, its growth is also unsustainable, according to AFFP, as the network continues to lose subscribers.
“Reddit has not only lost subscribers but is also suffering from a rapidly diminishing user base,” AFFI spokesperson Daniel McQuaid said.
“The network’s growth has slowed considerably in the past year, which has left it with less than 1.3 per cent of the world population as of January 2021, well below the global average of 5.3 percent.”
In terms of revenue, Reddit generated just $1.2 billion in 2020, but it still made more than $20 billion in revenue in 2021, making it the world leader in terms of revenues.
“The AFFPA analysis revealed that despite its growth, the company is not only failing to meet its core financial obligations, it is also in a financial crisis.”
While Reddit has a strong core of active users, the network’s revenues are in the red.
Its revenue has fallen dramatically in the last year and it is struggling to cover its debt payments,” AFA spokesperson Alex Noyes said.
The AFA found that Reddit’s revenue in 2020 was $532 million, down from $566 million in 2020 and $619 million in 2016.
In 2017, the site earned $2.3 billion, a decline of nearly 35 per cent.
The report also found that in 2019, the majority of Reddit’s users were from China, and only 8 per cent were from the United States.”
China has become the dominant market for Reddit, with 70 per cent share of the total user base, while India has been the only major market where Reddit’s user base has grown,” the report stated.”
Despite this growth, Reddit’s profitability has been negatively affected by a lack of growth in its revenue from the country.
“With a large proportion of its revenues coming from the US, this has been offset by declining revenue from other Asian markets.”
The report noted that the company has struggled to meet the debt repayment obligations.
“It is estimated that Reddit will face around $100 million in debt repayments in the next three years, with some estimates as high as $500 million,” the AFA said.AFFI’s analysis also revealed that Reddit has struggled with attracting new members.
“Between December 2017 and September 2021, more than one million new members joined Reddit each day, which is around 20 per cent more than the average for major gaming networks, according the report.”
This suggests that the Reddit network is not growing as quickly as it should be, despite having a very active community.
“The company is currently facing a $30 million payment due to a default by its debt holders, with $5 million being taken out of its coffers to cover this debt.
The company has a plan to address the issue, with its CEO, Ellen Pao, promising that the issue will be addressed in the future.