Jin Rong Jie·2025-07-30 08:40Group 1 - Morgan Stanley downgraded the ratings of Bilibili and NetEase from "overweight" to "neutral," highlighting challenges in the gaming industry amid intense competition [1] - Bilibili's revenue growth is expected to drop significantly from over 20% in the first half of the year to just 5% in the second half, with mobile game revenue growth forecasted to decline from 35% in Q2 to 2% in Q4 [1] - NetEase faces increased promotional costs for new games, with sales expense ratios projected to exceed 25% in Q3-Q4 of 2025, a 3 percentage point increase from the previous year [1] Group 2 - The Chinese mobile gaming market is projected to see a significant slowdown in revenue growth, with user acquisition costs rising sharply, exceeding 120 yuan, a nearly 60% increase over two years [2] - Bilibili's game revenue share is expected to decline from a peak of 40% to 23%, while NetEase's gross margin for gaming and related services is anticipated to fall below 60% for three consecutive quarters, marking a new low since 2018 [2] - The gaming industry is at a critical turning point, with user growth plateauing and regulatory normalization, necessitating companies to innovate or produce hit games to navigate the current cycle [2][3]