Summary of China Online Gaming Industry Journal (Nov 2025 Edition) Industry Overview - The report focuses on the **China Online Gaming Industry**, highlighting key data and updates from various companies within the sector, including **Century Huatong**, **37 Interactive Entertainment**, **G-Bits**, and **Kingnet** [1][22]. Key Highlights 1. **Industry Growth**: - The China domestic game market reached **Rmb 31.4 billion** in October 2025, reflecting a **7.8% year-over-year (yoy)** and **5.7% month-over-month (mom)** growth, primarily driven by National Day promotions [1][22]. - The **PC gaming segment** grew by **29.4% yoy** and **1.9% mom** to **Rmb 7.23 billion**, with notable contributions from games like **Delta Force** (Tencent) and **Where Winds Meet** (NetEase) [1][22]. - The **mobile gaming segment** saw a **2.4% yoy** and **5.3% mom** increase to **Rmb 22.6 billion**, driven by promotions for **HoK** (Tencent) and **Genshin Impact** (miHoYo) [1][22]. 2. **Company Performance**: - **Century Huatong**'s game **Whiteout Survival** climbed to **3** in mobile grossing rank, adding over **Rmb 100 million** in sequential grossing [1][22]. - **Overseas grossing** from Chinese studios increased by **11.9% yoy** and **11.0% mom** to **US$ 1.80 billion**, with top performers including **Arknights** (Hypergryph) and **Genshin Impact** (miHoYo) [1][22]. 3. **Investment Outlook**: - Despite a soft sentiment in the A-share gaming sector, the report maintains a positive outlook for most A-share gaming companies, citing a rich game pipeline and competitive advantages in overseas markets [1][22]. - The recommended pecking order for A-share gaming companies is: **Century Huatong > Kingnet > Giant Network > G-Bits > 37 > Perfect World** [1][22]. Company Updates - **Century Huatong**: - Announced the first beta for **Uncharted Waters: Origin** and **La Tale Mobile**, indicating ongoing development and expansion in mobile gaming [2]. - **37 Interactive Entertainment**: - Launched a survival RPG **Survival in 33 Days**, which quickly entered the top 30 in WeChat mini game grossing [2]. - **G-Bits**: - Conducted the final beta for **Jiu Mu Zhi Ye**, with an official launch scheduled for December 18 [2]. - **Kingnet**: - Announced a new Android closed paid beta for **Soul Land** [3]. Additional Insights - The report emphasizes the potential for **portfolio diversification** through investments in the online gaming sector, especially in light of current market conditions focused on AI [1][22]. - The performance of mobile games during promotional periods, such as National Day, highlights the importance of marketing strategies in driving revenue growth [1][22]. This summary encapsulates the essential insights and data from the China Online Gaming Industry Journal, providing a comprehensive overview of the current state and future outlook of the sector.

Core Insights - The A-share gaming index has surged over 60% this year, indicating that the value of gaming companies is supported by solid growth fundamentals rather than just a temporary boost from the "stay-at-home economy" [1] - The domestic gaming market achieved actual sales revenue of 168 billion yuan in the first half of the year, a year-on-year increase of 14.08%, with user numbers reaching nearly 679 million, marking historical highs for both market size and user base [1] - The third quarter has been a landmark period for the gaming industry, with leading companies experiencing explosive growth in profits, driving the entire sector to a strong performance [1] Group 1: Industry Performance - The top three gaming companies, 37 Interactive Entertainment, Century Huatong, and Perfect World, continue to dominate the market [2] - 37 Interactive Entertainment reported a revenue of 12.461 billion yuan and a net profit of 2.345 billion yuan for the first three quarters of 2025, reflecting a year-on-year growth of 23.57% [2] - Century Huatong's revenue reached 27.223 billion yuan, a 75.31% increase year-on-year, with a net profit of 4.357 billion yuan, up 141.65% [2] - Perfect World achieved a revenue of 5.417 billion yuan, a 33% increase, and a net profit of 666 million yuan, growing by 271.17% [2] Group 2: Driving Forces Behind Growth - The industry's growth is attributed to a combination of favorable policy environments, technological advancements, and global market expansion [3][4] - Stable policy expectations have provided a solid foundation, with consistent issuance of game licenses and supportive measures from various cities [3] - AI technology is becoming a core driver of industry evolution, significantly enhancing efficiency and reducing costs in game development [4][6] - The deepening of overseas expansion is crucial for unlocking growth potential, moving beyond simple product transfers to localized and innovative offerings [4][11] Group 3: AI Integration - AI is recognized as a key variable in the gaming industry, with applications in game design, development, and player experience [6][10] - 37 Interactive Entertainment has developed a vertical AI model, "Xiao Qi," which encompasses over 40 AI capabilities, enhancing the entire game development process [7] - By the third quarter of 2025, AI-assisted generation accounted for over 80% of 2D art assets and over 30% of 3D art resources in 37 Interactive Entertainment [9] Group 4: International Expansion - The "going global" trend in the gaming industry has shifted from a spontaneous choice to a determined direction, significantly altering the competitive landscape [11] - The Chinese government's support for game exports has provided a boost to the industry's global ambitions [11] - Century Huatong's game "Endless Winter" has surpassed 200 million global downloads, contributing significantly to the company's revenue [11] - 37 Interactive Entertainment has adopted a strategy of maintaining domestic stability while achieving breakthroughs in overseas markets [11] Group 5: Industry Reassessment - The gaming industry is characterized as a "non-typical" cyclical industry, influenced by product life cycles, technological revolutions, and global market opportunities [17] - The current performance surge is likely indicative of a clear upward cycle, with companies focusing on high-quality content and efficiency improvements [17][18] - Successful companies are expected to emerge as winners in this new normal, driven by their ability to produce quality products and optimize operations [18]

证券日报网讯12月5日，完美世界（002624）在互动平台回答投资者提问时表示，公司持续关注行业发 展动向，并结合自身业务规划及发展状况，会在符合公司战略方向的领域适时布局。 ...

Core Insights - The 2025 China Esports Industry Conference was held in Beijing, revealing that the esports industry revenue is expected to grow by 6.40% year-on-year, with live streaming revenue accounting for the largest share at 80.81% [1] - The user base for esports has surpassed 495 million, showing a significant increase with a growth rate of 1.06% compared to the previous year [1] Group 1: Industry Growth - The esports industry in China is projected to see a revenue increase of 6.40% in 2025, driven primarily by live streaming [1] - The user base has reached over 495 million, indicating a steady growth trend in engagement within the esports sector [1] Group 2: Company Initiatives - Perfect World is actively developing a pyramid esports ecosystem, which includes top-tier international events, professional advancement pathways, and grassroots competitions to strengthen user and talent foundations [1] - The company has formed a sponsorship alliance with industry leaders to enhance technological upgrades, precision marketing, and collaborative ecosystem development, contributing to sustainable high-quality growth in the esports industry [1]

Group 1 - The core viewpoint of the news is the significant growth and transformation of China's esports industry, moving from "high-speed growth" to "high-quality development" by 2025, with a projected revenue increase of 6.40% year-on-year and a user base exceeding 495 million people, reflecting a growth rate of 1.06% [1][2] - The report highlights that live streaming revenue constitutes the largest share of the esports industry's income, accounting for 80.81% of total revenue [1] - The event emphasized the need for a sustainable industry ecosystem and the unique role of esports in promoting socialist culture, as stated by Sun Shoushan, Chairman of the China Audio-Video and Digital Publishing Association [1] Group 2 - Perfect World is actively exploring the construction of a "pyramid esports ecosystem," which includes top-tier international events at the peak, professional advancement opportunities in the middle, and grassroots competitions at the base, thereby creating a comprehensive talent and value promotion system [2] - The company has formed a sponsorship alliance with industry leaders to enhance technology, precision marketing, and ecological co-construction, contributing to a healthy commercial ecosystem that supports sustainable high-quality development in the esports industry [2] - The event was organized by the China Audio-Video and Digital Publishing Association, with support from various governmental and industry bodies, indicating a collaborative effort to advance the esports sector [2]

Core Insights - Perfect World has been awarded the "Best Sustainable Development Award" and "Best Social Responsibility Award" at the "2025 Employer Brand Creative Competition" for its outstanding performance in the ESG field [1][5]. Group 1: Corporate Social Responsibility - Perfect World actively fulfills its social responsibilities and integrates sustainable development concepts into every aspect of its business [4]. - The company focuses on providing high-quality products while enhancing its market competitiveness through a refined global distribution system [4]. - In the first three quarters of 2025, Perfect World achieved a revenue of 5.417 billion yuan, a year-on-year increase of 33%, and a net profit of 666 million yuan, turning a profit compared to the same period last year [4]. Group 2: Technological Innovation - Technological innovation is the core driving force behind Perfect World's development, with a commitment to independent research and development [6]. - The company explores the application of cutting-edge technologies like AI in its products, such as the online game "Zhu Xian World," which incorporates advanced AI technologies [6]. - Perfect World integrates cultural elements with technology, creating new business models that promote the deep integration of digital culture with traditional heritage and tourism [6]. Group 3: Organizational Environment and Governance - Perfect World emphasizes a healthy and orderly organizational environment, continuously improving management and business processes [7]. - The company adheres to a business ethics framework and compliance principles, enhancing risk management and internal control capabilities [7]. - By establishing comprehensive compliance systems, Perfect World fosters a fair competition atmosphere and promotes a culture of integrity [7]. Group 4: Commitment to Sustainability - As a member of the "Global Sustainable Consumption Initiative," Perfect World recognizes its responsibilities and has published a guiding document on sustainable consumption in the digital culture sector [8]. - The company engages in various social and environmental initiatives, including educational programs and low-carbon activities to promote green living [8]. - Perfect World aims to explore feasible paths for sustainable development while navigating the opportunities and challenges in the digital culture industry [8]. Group 5: Competition Overview - The "2025 Employer Brand Creative Competition" attracted 534 well-known domestic and international companies, receiving 1,831 employer brand creative submissions [9]. - The selection process involved four stages and utilized a "4+1" selection criterion, ultimately awarding 17 prizes across four categories [9].

Core Viewpoint - Perfect World experienced a stock price decline of 2.02% on December 3, with a current price of 14.05 CNY per share and a total market capitalization of 27.257 billion CNY [1] Financial Performance - For the period from January to September 2025, Perfect World achieved a revenue of 5.417 billion CNY, representing a year-on-year growth of 33.00%, and a net profit attributable to shareholders of 666 million CNY, which is a significant increase of 271.17% [2] - The company has distributed a total of 5.543 billion CNY in dividends since its A-share listing, with 1.976 billion CNY distributed over the past three years [3] Stock Market Activity - As of December 3, Perfect World saw a net outflow of 14.6878 million CNY in principal funds, with significant selling pressure observed [1] - The stock has increased by 39.04% year-to-date but has seen declines of 7.81% over the last five trading days, 14.43% over the last 20 days, and 10.34% over the last 60 days [1] Shareholder Structure - As of September 30, 2025, the number of shareholders decreased by 10.35% to 91,600, while the average number of circulating shares per person increased by 11.54% to 19,959 shares [2] - Major shareholders include Hong Kong Central Clearing Limited, which increased its holdings by 66.205 million shares, and several ETFs that have recently entered the top ten shareholders list [3]

Core Viewpoint - The competition in the two-dimensional open city game sector is intensifying, with several companies launching new titles, indicating a potential for new leading hits in the market [1] Group 1: Industry Competition - Perfect World’s game "Yihuan" and NetEase’s "Infinity" are among the key competitors in this sector, alongside Shiyue Network’s "Wangyue" and MiHoYo’s new entry "Varsapura" [1] - Only "Yihuan" has completed its second testing phase and is confirmed to be in the final development sprint [1] Group 2: Upcoming Events - On November 27, "Yihuan" officially launched a player recruitment for a co-research experience event, scheduled for December 27-28 in Suzhou [1] - The event will be a small, closed beta test requiring participants to sign a confidentiality agreement, focusing on a new version of the game [1] - The development team will engage directly with players to enhance the product through feedback [1]

Core Insights - The competitive landscape in the two-dimensional open-world gaming sector is intensifying, with Perfect World’s "Yihuan," NetEase’s "Infinity," and Shiyue Network’s "Wangyue" vying for dominance, while miHoYo enters the fray with "Varsapura" [1] - Perfect World has successfully turned around its financial performance, reporting a significant increase in revenue and profit, indicating a return to growth [2] Group 1: Industry Competition - Perfect World’s "Yihuan" has completed its second closed beta test and is in the final stages of development, with a player recruitment event scheduled for late December [1] - The game has leveraged advanced technologies such as Unreal Engine 5.5 and NVIDIA DLSS4, resulting in notable improvements in graphics and gameplay [1] - "Yihuan" has generated significant online buzz, with over 1 billion discussions across social media platforms during its testing phases [1] Group 2: Company Financial Performance - For the first three quarters of 2025, Perfect World reported revenue of 5.417 billion yuan, a year-on-year increase of 33% [2] - The company achieved a net profit of 666 million yuan, marking a successful turnaround from previous losses [2] - The gross profit margin improved to 64.83%, reflecting a 13.06 percentage point increase year-on-year, alongside reductions in sales, management, and R&D expenses [2] Group 3: Future Projections - Analysts predict that "Yihuan" could generate approximately 1.4 billion yuan in profit for Perfect World in 2026, driven by its high quality and innovative themes [2] - The anticipated launch of "Yihuan" is expected to provide a dual benefit of performance release and valuation recovery for the company [2]

Core Viewpoint - The A-share market opened lower on December 2, with all three major indices declining, indicating a mixed market sentiment and sector performance [1] Market Performance - The Shanghai Composite Index opened down by 0.14%, the Shenzhen Component Index by 0.13%, and the ChiNext Index by 0.04% [1] - Sectors such as lithium battery electrolyte, superhard materials, 6G, commercial aerospace, and CPO concepts showed weakness, while themes related to cross-strait integration and AI applications gained strength [1] Gaming Sector Insights - The gaming sector exhibited a fluctuating performance in the morning session, with a slight decline observed [1] - The gaming ETF (159869) has seen significant inflows, accumulating a total of 371 million yuan over the past two trading days, reflecting strong investor interest [1] - As of December, the product scale of the gaming ETF reached 11.451 billion yuan, facilitating investors in strategically positioning themselves in A-share gaming leaders [1] Regulatory Developments - The National Press and Publication Administration released approval information for domestic online games in November 2025, issuing a total of 184 licenses, with 178 being for domestic games, marking a monthly high for the year [1] - By November, a total of 1,624 game licenses had been issued in 2025, significantly surpassing the total for the entire year of 2024 [1] - Key products approved include titles from Bilibili, Perfect World, Xishanju, and Thunder Game, covering various genres and indicating a diversified supply structure [1] Related ETFs - The gaming ETF (159869) focuses on leading companies in the A-share IP gaming industry [1] - The Cultural and Entertainment Media ETF (516190) provides a balanced investment across marketing, film, tourism, and IP toy sectors [1]