JOYY Inc. (YY): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear map of the risks and opportunities for JOYY Inc. (YY), and a PESTLE analysis is defintely the right tool. As an analyst who's watched the global live-streaming space for two decades, I can tell you the biggest challenges for JOYY are political and competitive, but their global reach is a real opportunity. The core takeaway is this: JOYY's non-China revenue, which was around $560 million in the third quarter of 2024, is solid, but the regulatory environment in its key markets is a constant, expensive headwind. You need to watch content moderation costs and geopolitical sentiment more than the competition right now.

JOYY Inc. (YY) - PESTLE Analysis: Political factors

US-China geopolitical tension increases scrutiny on Bigo Live.

You're watching JOYY Inc. successfully de-risk its China exposure, but the geopolitical spotlight is now firmly on its international flagship, Bigo Live. The US-China relationship remains tense, and while JOYY is headquartered in Singapore, its Chinese origins mean Bigo Live is still viewed with suspicion by Western regulators, especially concerning data security.

The company made a major move to mitigate this risk, completing the sale of its domestic Chinese live streaming business, YY Live, to Baidu in February 2025 for approximately US$2.1 billion. This divestiture helps ring-fence the global business from mainland China's regulatory environment. Still, the underlying risk is visible in the strong performance of Bigo Live in the US, where Q1 2025 North American Monthly Active User (MAU) growth exceeded 7% year-over-year, making it a high-value target for political scrutiny.

Content censorship demands rise across key markets like India and Southeast Asia.

The regulatory pressure on content is no longer a theoretical risk; it's an operational cost that hits the bottom line. Governments in high-growth markets are demanding stricter content moderation, forcing JOYY to invest heavily in its compliance infrastructure.

The clearest signal of this risk was the temporary removal of Bigo Live from major app stores in late 2024 following content-related issues. In response, JOYY has focused on 'compliance enhancement,' which directly impacted their operating metrics in 2025. For example, the Q2 2025 financial report noted that a decline in live streaming revenues was partly due to adjustments to non-core audio live streaming products for this very reason. This isn't just a cost; it's a revenue headwind.

• Mandated content moderation increases operational expense.
• Platform bans cause immediate revenue and user drops.
• Compliance requires constant technical and personnel investment.

Government pressure to localize data storage and operations is a major cost.

The global trend toward data sovereignty (local data storage) is a massive capital expenditure item for any global tech firm, and JOYY is no exception. Operating out of Singapore gives them a neutral base, but to comply with local laws in markets like Indonesia and Thailand, they must build or lease local data infrastructure. This is defintely expensive.

Here's the quick math: the broader Southeast Asia data center market is seeing over $37 billion in investment, with an expected 3GW of new power capacity coming online by the end of 2025, driven entirely by these localization demands. While JOYY does not disclose its exact data center spend, this macro trend is a key driver behind the company's elevated operating expenses, which stood at US$179.8 million in Q2 2025. This localization is a non-negotiable cost of market access.

Regulatory risk of platform bans or forced divestitures remains a factor.

The threat of a complete market ban, like the one that affected other Chinese-linked apps in India, is the ultimate political risk. While JOYY's app Likee was not banned in the initial wave, the precedent is set, and the regulatory environment in India-a key market-is only getting stricter.

The financial impact of a temporary ban is immediate. The late 2024 removal of Bigo Live from app stores, though brief, served as a live-fire exercise in regulatory risk management. The company's strategy is to prioritize profitability over user volume, a clear defensive posture against potential regulatory fallout. This is evident in the Q1 2025 financial results, where the company recorded a non-GAAP net income of US$63.2 million, prioritizing efficient monetization over aggressive, high-risk user acquisition.

Political Risk Factor	2025 Impact/Metric	Actionable Consequence for JOYY
US-China Geopolitical Tension	Sale of YY Live closed in Feb 2025 for ~US$2.1 billion.	Reduced China-domestic regulatory exposure; increased focus on Bigo Live's US compliance.
Content Censorship Demands	BIGO's Q2 2025 revenue-sharing & content costs decreased by US$36.5 million.	Mandated investment in AI and human moderation; revenue headwind from compliance-driven product adjustments.
Data Localization Pressure	Southeast Asia data center market investment: >$37 billion in the region.	Sustained high capital expenditure (CapEx) and operating expenses (OpEx) for local data storage and operations.
Platform Ban Risk	Bigo Live temporary app store removal in late 2024.	Decline in Bigo's Average Revenue Per Paying User (ARPPU) to US$215.2 in Q2 2025, reflecting a more cautious monetization strategy.

JOYY Inc. (YY) - PESTLE Analysis: Economic factors

When you look at JOYY Inc.'s global business, especially Bigo Live and Likee, the core economic factors aren't about a booming global economy; they're about the pressure points in emerging markets. The near-term reality is a tight squeeze on consumer wallets and a mixed bag in the advertising world, forcing JOYY to make hard choices on growth versus profitability.

Here's the quick math: JOYY's total net revenues for the first three quarters of 2025 totaled approximately $1.54 billion, with the Q4 2025 forecast landing between $563 million and $578 million. The real story is the strategic pivot to manage costs in the face of these economic headwinds, a move that is expanding margins even as top-line revenue faces pressure.

Global digital advertising spend growth is slowing down, impacting Likee's monetization.

The overall global digital ad spending growth is moderating, a trend that directly impacts Likee's ability to monetize its massive user base. While global digital ad spend is still projected to be robust, reaching an estimated $777 billion in 2025, the growth rate is slowing down from previous years. This means competition for every ad dollar is fierce.

But to be fair, JOYY's programmatic advertising platform, BIGO Ads, is defintely outperforming the broader market slowdown. In the third quarter of 2025, BIGO Ads revenue hit $104 million, representing a strong year-over-year growth of 33.1%. This surge is a clear sign that while the macro environment is cooling, JOYY's focus on AI-driven, hyper-relevant ad placements is working, effectively countering the general market trend.

High inflation in emerging markets limits user discretionary spending on virtual gifts.

The core of JOYY's revenue comes from live-streaming, which relies heavily on users buying virtual gifts-a pure discretionary spend. High inflation in key emerging markets is eating away at the disposable income of the average user, making them think twice before sending that virtual rose.

We see this impact clearly in the numbers for Bigo Live and Likee's combined platforms (BIGO):

• Average Revenue Per Paying User (ARPPU) dropped to $215.2 in Q2 2025, down from $233.5 in Q2 2024.
• The total number of paying users also decreased to 1.50 million in Q2 2025, down from 1.66 million in Q2 2024.

This decline in both the number of paying users and the average amount they spend is a direct, quantifiable result of economic strain. When a user in a market like Türkiye faces a year-end inflation forecast of around 31% for 2025, virtual gifts are the first thing to get cut from the budget.

Currency volatility (e.g., US Dollar strength) hurts conversion of international revenue.

Because JOYY reports in US Dollars (USD) but earns revenue in dozens of local currencies across the Middle East, Southeast Asia, and Latin America, a strong USD acts as a constant headwind. When local currencies depreciate, every dollar of revenue earned abroad converts to fewer US Dollars on the balance sheet.

For example, the Turkish Lira's depreciation is a known factor driving high inflation in that region. Similarly, the Brazilian Real is expected to trade close to R$5.40 per US Dollar in 2025. This means that even if a paying user in Brazil spends the same amount of Real on gifts as last year, the USD value JOYY records is lower. This currency translation risk is a structural drag on reported revenue, even if local market performance remains stable.

Intense competition forces higher user acquisition costs, squeezing margins.

The global social media and short-form video space is dominated by giants like Meta Platforms and ByteDance (TikTok), forcing up the price of user acquisition (UAC). To counter this intense competition, JOYY has made a strategic choice: prioritize profitability over reckless growth.

This is evident in the sales and marketing spend, which is a direct proxy for UAC. JOYY's Sales and Marketing expenses decreased to $72.1 million in Q3 2025, a significant drop from $83.5 million in the same period a year ago.

Here's the tradeoff:

• Action: Reduced UAC spend to improve ROI.
• Result 1 (Negative): Global average mobile Monthly Active Users (MAUs) for Likee fell to 28.5 million in Q2 2025, down from 35.6 million in Q2 2024.
• Result 2 (Positive): Non-GAAP operating income margin expanded to 6.3% in Q1 2025, up from 4.4% in Q1 2024.

The competition is still intense, but JOYY is choosing to let go of low-value users to protect its bottom line and expand its non-GAAP net income margin to 13.4% in Q3 2025.

JOYY Inc. (YY) Key Economic Indicators - Q3 2025
Metric	Value (Q3 2025)	Economic Implication
Net Revenues	$540.2 million	Top-line revenue decline stabilizing, but still facing macro headwinds.
BIGO Ads Revenue (Non-Livestreaming)	$104 million	Strong diversification, outperforming the general digital ad market slowdown (33.1% YoY growth).
BIGO ARPPU (Average Revenue Per Paying User)	N/A (Q2 2025: $215.2)	Direct evidence of inflation limiting discretionary spending on virtual gifts.
Sales and Marketing Expenses	$72.1 million	Strategic cost control to combat high User Acquisition Costs (UAC), prioritizing ROI.
Non-GAAP Net Income Margin	13.4%	Profitability is improving despite revenue pressure, confirming the success of the cost-optimization strategy.

Finance: draft a quarterly report comparing the year-over-year FX impact on Q3 2025 revenue for the top five non-USD markets by next Tuesday.

JOYY Inc. (YY) - PESTLE Analysis: Social factors

Creator economy growth drives demand for better monetization tools on Bigo Live.

The global creator economy continues its explosive growth, forcing platforms like Bigo Live to constantly refine how creators earn money (monetization). This isn't just about virtual gifts anymore; it's about a more sophisticated, integrated system. You're seeing this directly in the numbers: Bigo's total paying users grew 0.8% quarter-over-quarter (QoQ) in Q3 2025, but the Average Revenue Per Paying User (ARPPU) increased by a stronger 3.4% QoQ. This tells you the existing, high-value users are spending more, which is a key sign of effective monetization upgrades.

The biggest lever here is technology. Bigo Live is using AI-Generated Content (AIGC) to create localized virtual gifts. Honestly, that's a smart move. In October 2025, AI-powered interactive gifts represented 25% of the total virtual gift consumption on the platform. That's a quarter of the gift revenue coming from a tech-driven, high-margin feature. The platform is also actively restructuring streamer incentive programs to keep the best talent engaged and producing high-quality content.

Increasing user demand for hyper-localized and culturally relevant content.

Operating in over 150 countries means a one-size-fits-all content strategy just won't work. Users want content that feels like it was made for their specific culture and language-that's hyper-localization. JOYY Inc. is addressing this with technology to break down language barriers in real-time. For instance, Bigo Live's real-time translation subtitles now support 15 languages, significantly improving cross-regional user interactions and broadening the audience for any single streamer.

The regional revenue breakdown for the nine months ended September 30, 2025, clearly shows the importance of this global, yet localized, focus. Developed countries are the highest revenue generator, but the Middle East and Southeast Asia remain critical, diverse markets that demand cultural nuance.

Region (Nine Months Ended Sept. 30, 2025)	Net Revenues (US$ in thousands)
Developed countries and regions	$893,787
Middle East	$185,323
Southeast Asia and others	$314,317
Mainland China	$148,905

Public concern over content safety and harmful material requires massive investment in moderation.

The social license to operate (the unwritten public acceptance of a business) for any global social platform is now directly tied to content safety. Public concern over harmful material is a near-term risk that requires massive, non-negotiable investment in moderation, which hits your operating expenses.

In Q3 2025, JOYY Inc.'s Research and Development (R&D) expenses were US$63.1 million, and General and Administrative (G&A) expenses were US$39.1 million. Here's the quick math: a significant portion of that R&D spending goes into the AI and machine learning algorithms that power content filtering, while the G&A covers the legal, compliance, and human moderation teams. The company has explicitly noted that 'adjustments to the interactive features' for compliance enhancement were a factor in the year-over-year decrease in livestreaming revenue, meaning they are prioritizing safety over short-term revenue from riskier content.

This is defintely a cost of doing business globally now.

Shifting user preference toward short-form video over traditional live-streaming.

The market is clearly moving toward short-form video (SFV), which is content typically under 90 seconds. While Bigo Live is a core live-streaming product, JOYY Inc. owns Likee, a dedicated short-form video platform, which is the key to capturing this trend. This shift is visible in the company's revenue mix.

Live-streaming revenue for Q3 2025 was US$388.5 million, showing a quarter-over-quarter recovery. But the non-livestreaming revenue, which includes advertising revenue from platforms like Likee via BIGO Ads, is growing much faster. BIGO Ads revenue reached US$104 million in Q3 2025, representing a year-over-year growth of 33.1%.

This massive growth rate in advertising shows the strategic importance of the SFV and ad-tech business as the company's 'second growth engine.' The overall market trend supports this focus, as short-form video ad spending is projected to hit around $100 billion by 2025 globally.

• Accelerate Likee's ad-tech integration.
• Shift R&D focus toward SFV discovery algorithms.
• Mitigate live-streaming revenue decline with ad growth.

The action here is clear: Finance needs to continue mapping the non-livestreaming revenue growth against the slower, but more stable, live-streaming business to understand the true blended growth rate.

JOYY Inc. (YY) - PESTLE Analysis: Technological factors

AI is crucial for real-time content moderation and personalized user feeds.

The core of JOYY Inc.'s competitive edge today isn't just content; it's the Artificial Intelligence (AI) engine driving content distribution and monetization. You're seeing this play out directly in the financials, especially within the BIGO segment. The AI-powered programmatic platform, BIGO Ads, is a major growth driver, delivering a 29.2% year-over-year revenue growth in Q3 2025, reaching $112.5 million in revenue. This growth is a direct result of advanced machine learning models optimizing ad delivery and user acquisition.

Beyond advertising, AI is now deeply embedded in the user experience and revenue streams. For example, AI-powered interactive virtual gifts accounted for a significant 25% of total virtual gift consumption on platforms like Bigo Live in October 2025. This shows AI is defintely not just a back-end tool; it's a front-end revenue generator. The company's R&D spending, which was US$63.1 million in Q3 2025, is strategically allocated to enhance these AI-driven features, improving content distribution and payment experiences to boost user viewing time and retention.

Competition from ByteDance's platforms (TikTok) remains the dominant threat in short-form video.

The short-form video market is a battlefield, and ByteDance's platforms, primarily TikTok, are the clear global behemoth, setting the technological benchmark. The sheer scale of TikTok, with over 2 billion monthly active users, puts immense pressure on JOYY's Likee product, which reported average mobile Monthly Active Users (MAUs) of 30.2 million in Q1 2025. This is a scale problem, and it means JOYY must out-innovate on features and monetization, not just compete on user volume.

The global short video platforms market is estimated to be valued at $53.48 billion in 2025, so the prize is huge, but the innovation cycle is brutal. ByteDance's lead in AI-driven recommendation algorithms forces JOYY to constantly invest in its own AI to keep user feeds personalized and engaging. This competitive pressure is why R&D allocation toward high-ROI areas like BIGO Ads is a necessity, not an option.

5G and mobile internet penetration in emerging markets expands the user base.

The global rollout of 5G and the continued rise in mobile internet penetration are massive tailwinds for JOYY, whose platforms thrive on high-bandwidth video. By the end of 2024, global 5G connections had surpassed 2 billion, and mobile internet users worldwide totaled 4.7 billion, or about 58% of the global population. This is a huge, untapped audience for JOYY, especially in its key markets.

The company's revenue breakdown shows where this technological expansion is paying off. In Q3 2025, revenue from the Middle East reached $57.4 million, and Southeast Asia and others accounted for $108.6 million. The acceleration of 5G adoption in regions like the Middle East and Africa, where subscriptions are expected to reach 605 million by 2030, directly supports JOYY's international growth strategy by making high-quality live streaming accessible to millions of new users.

Need to invest heavily in low-latency streaming technology to maintain quality.

For a live-streaming company, latency (the delay between a streamer's action and a viewer's reception) is the ultimate quality metric. Low-latency delivery is non-negotiable for real-time interactive experiences like Bigo Live. The company's overall R&D expense of $63.1 million in Q3 2025 is the budget that must cover these critical infrastructure investments.

The shift to 5G and the integration of edge computing are key technological enablers that reduce this lag time, directly impacting user engagement and, consequently, livestreaming revenues, which were $388.5 million in Q3 2025. If the streaming quality drops, user churn rises. It's that simple. The table below summarizes key performance indicators tied to these technology investments.

Technological Metric	Q3 2025 Value (USD)	Strategic Impact
R&D Expenses (Q3 2025)	$63.1 million	Primary investment pool for AI and low-latency streaming infrastructure.
BIGO Ads Revenue (Q3 2025)	$112.5 million	Direct return on AI-powered ad-tech investment, showing 29.2% YoY growth.
AI Virtual Gift Consumption (Oct 2025)	25% of total virtual gift consumption	Quantifiable success of AI in driving core monetization via user engagement.
Live Streaming Revenue (Q3 2025)	$388.5 million	Revenue stream most dependent on low-latency, high-quality streaming technology.
Mobile MAUs - Likee (Q1 2025)	30.2 million	Scale of short-video user base that must compete with multi-billion user platforms like TikTok.

JOYY Inc. (YY) - PESTLE Analysis: Legal factors

Stricter global data privacy laws (like GDPR equivalents) increase compliance complexity.

You are operating a global social media platform, so the patchwork of international data privacy laws is a constant, expensive headwind. The European Union's General Data Protection Regulation (GDPR) and its equivalents emerging in Southeast Asia and the US mean a single data breach or compliance misstep can trigger massive fines. We are seeing this pressure translate directly into operational adjustments and revenue impact.

For JOYY, the financial consequence of compliance is evident in the performance of the BIGO segment. Management noted that live streaming revenues in the second quarter of 2025 were US$375.4 million, down from US$459.7 million in the corresponding period of 2024, partly due to 'adjustments to the interactive features of the Company's non-core audio livestreaming products for compliance enhancement.' This suggests that prioritizing compliance-even if proactive-can directly erode your top line by reducing user engagement or monetization features.

Here's the quick math on the compliance trade-off:

• Proactive compliance changes reduced live streaming revenue in Q2 2025 by an unquantified amount.
• The total net revenues for Q1 2025 were US$494.4 million, down from US$564.6 million in Q1 2024, a decline partially attributed to compliance-driven adjustments.
• The alternative is a massive fine, which for a global company can be up to 4% of global annual turnover under laws like GDPR.

Intellectual property (IP) enforcement for music and video content is becoming costlier.

The core of a user-generated content (UGC) platform like Likee is the content itself, but that content is a legal minefield. IP holders, especially music publishers and record labels, are getting more aggressive and sophisticated in tracking unauthorized use. This enforcement is shifting from simple takedown notices to costly, protracted litigation.

The ongoing case of BMG Rights Management (US), LLC v. JOYY Inc. over alleged contributory copyright infringement on the Likee app is a prime example. While direct infringement claims were dismissed, the court allowed the contributory infringement claim to proceed in early 2024, meaning the platform's role in encouraging infringement remains a significant liability risk. This forces JOYY to invest heavily in automated content filtering and licensing agreements.

What this estimate hides is the true cost of legal defense and settlement reserves, which are not broken out in financial reports but drain resources. You must either pay for expensive global music licenses or pay for a lengthy legal defense; there is no free option.

Content liability laws are shifting, making platforms responsible for user-generated content.

The traditional legal shield for platforms-that they are merely a conduit for user content-is rapidly dissolving globally. Regulators are demanding platforms take proactive responsibility for harmful or illegal content, especially concerning minors and misinformation.

A concrete, near-term risk was the December 2024 removal of Bigo Live from the iOS App Store and Google Play Store due to content concerns. While the app was reinstated on Google Play Store after implementing 'enhanced rules and measures,' this incident highlights the immediate and severe business disruption that content liability poses. The temporary loss of new user acquisition on the iOS platform is a clear, quantifiable cost of non-compliance.

This trend means platforms must now act as de facto content police, requiring massive investment in moderation technology, human review teams, and compliance reporting.

Legal Risk Area	2025 Financial/Operational Impact	Key Regulatory Driver
Data Privacy/Compliance	Live streaming revenue decline in Q2 2025 (US$459.7M to US$375.4M YoY) partly due to compliance-driven feature adjustments.	GDPR and global equivalents; need for 'compliance enhancement' in product features.
Content Liability	Temporary removal of Bigo Live from app stores in late 2024, forcing 'enhanced rules and measures' for user-generated content.	Platform responsibility for UGC (e.g., child safety, harmful content).
Anti-Monopoly/Competition	Exposure to fines up to 10% of prior year's revenue (Max. US$223.78 million based on 2024 revenue of US$2,237.8 million).	China's revised Anti-Unfair Competition Law (AUCL) effective October 15, 2025, targeting data/algorithm abuse.

Anti-monopoly and fair competition regulations in major markets could limit expansion.

The regulatory environment in China, a key market for JOYY's overall business strategy, is tightening significantly, even with the sale of YY Live. The revised China Anti-Unfair Competition Law (AUCL), which took effect on October 15, 2025, is a game-changer for digital platforms.

This new law explicitly bans using data, algorithms, or platform rules to engage in unfair competition, and it introduces an extraterritoriality clause. This means JOYY's global operations, including Bigo Live and Likee, could be subject to Chinese law if their actions disrupt the Chinese market or harm domestic operators. This is defintely a risk to global expansion strategy.

The financial risk is substantial: while the general fine for unfair competition is up to RMB 5 million (approx. US$0.69 million), serious competition-restricting violations under the Anti-Monopoly Law can result in a fine of up to 10% of the prior year's revenue. Given JOYY's total net revenues of US$2,237.8 million for the full year 2024, a maximum penalty could reach US$223.78 million. That's a serious hit to the balance sheet, which held US$3.32 billion in net cash as of September 30, 2025.

JOYY Inc. (YY) - PESTLE Analysis: Environmental factors

Focus on the 'Social' aspect of ESG (content safety, mental health) is the primary concern.

You might think of the 'E' in Environmental, Social, and Governance (ESG) as trees and carbon, but for a live-streaming and short-form video platform like JOYY Inc., the 'S'-Social-is the existential risk. Your core business, which reached a global average mobile MAU of 266.2 million in the third quarter of 2025, is entirely dependent on user-generated content (UGC).

The primary environmental factor here is the digital ecosystem's toxicity, which directly impacts user and moderator mental health. Honestly, this is where the real money is at stake. The industry standard for content moderation is a hybrid system, but the sheer volume of data is staggering. For its core platform, BIGO, the company processes over 300 million data packets daily.

The pressure to protect users and moderators is immense. Competitors have faced massive financial liabilities, like the reported $52 million settlement paid by one major platform to its content moderators over psychological damage. This financial risk makes content safety programs a critical, quantifiable operational expense for JOYY. The goal isn't just to remove bad content; it's to do it fast enough to prevent user trauma and regulatory fines.

• Mitigate moderator trauma with AI-first filtering.
• Reduce legal exposure from harmful user-generated content (UGC).
• Maintain user trust, which directly drives the Q3 2025 Live Streaming revenue of US$388.5 million.

Need to demonstrate ethical use of AI in moderation and personalization.

JOYY's ability to maintain its global user base hinges on its ethical use of Artificial Intelligence (AI) for content moderation and personalization. The company is using AI to filter out the worst content before human eyes ever see it. This isn't just about efficiency; it's a moral and financial imperative to protect the human-in-the-loop (HITL) system.

The technology is impressive, but it's not perfect. While AI is consistent, human moderators still provide the crucial context that algorithms miss, especially with nuanced cultural content across the 20+ languages supported globally.

Here's the quick math on their AI-driven content governance, primarily through BIGO:

Metric	Value (as of Q3 2025)	Impact
AI Moderation Accuracy	99.5% (Globally)	Minimizes exposure to harmful content for 266.2M MAUs.
Content Removal Speed	60-second removal time (for obvious violations)	Reduces brand risk and regulatory non-compliance exposure.
Negative Keywords Used	Over 200,000	Scales text-based moderation across multiple languages.
Daily Harmful Content Removal (Indonesia)	Over 1 million pieces	Demonstrates local commitment to safety and compliance.

Investor pressure for transparent ESG reporting, especially on content governance.

You are seeing a clear trend: investors are demanding more than just financial performance. They want to see the operational metrics that mitigate social risk, which is why transparent ESG reporting is crucial. JOYY filed its 2024 Annual Report on Form 20-F with the SEC in April 2025, but a dedicated, comprehensive ESG report with forward-looking 2025 targets remains the missing piece for many institutional investors.

The European Union's Digital Services Act (DSA), which is in full force for all providers in early 2025, sets a new global benchmark for content moderation transparency and accountability. This regulation requires platforms to provide a 'Statement of Reasons' for any content moderation decision, which adds a significant, measurable compliance cost. If JOYY does not publish its specific content governance metrics and mental health support programs for its moderators, it will face higher scrutiny and potentially lower ESG ratings, which can impact its cost of capital.

Minimal direct environmental impact, but data centers require energy efficiency focus.

Unlike a manufacturing company, JOYY's direct environmental impact (Scope 1 and 2 emissions) is minimal. But still, the company's entire operation-supporting 266.2 million MAUs-is powered by energy-intensive data centers. The massive computational demand from AI-driven personalization and real-time video streaming is the real environmental footprint.

The industry average Power Usage Effectiveness (PUE)-a metric where 1.0 is perfect efficiency-is around 1.56. Leading hyperscalers are already reporting a PUE as low as 1.09 as of Q1 2025. The US data center sector's energy consumption is projected to be between 325 and 580 Terawatt-hours (TWh) in 2028, driven heavily by AI. JOYY must demonstrate its commitment to energy efficiency by disclosing its own PUE and Carbon Usage Effectiveness (CUE) for its data center operations, even if they are primarily leased or co-located.

What this estimate hides is the lack of public disclosure on JOYY's renewable energy procurement or PUE targets. Without this data, investors assume the company is at the industry average, which creates a competitive disadvantage against peers who have achieved up to 96% global renewable energy coverage, like some major data center operators in 2024.