Industry Overview - In October, a total of 166 games received approval for release, with 159 domestic games and 7 imported games, marking the highest number of new approvals in recent years [3] - The actual sales revenue of the Chinese gaming market for Q3 (July-September) was 880.26 billion yuan, representing a quarter-on-quarter growth of 6.96% but a year-on-year decline of 4.08% [5] Domestic Companies - Among the 159 approved domestic games, 155 are mobile games, 12 are client games, and 5 are web games, with notable titles including "Survival 33 Days" by 37 Interactive Entertainment and "Tomorrow's Prologue" by Meituan [4] - NetEase's Li Kaiming, head of the tenth division, announced his departure to pursue entrepreneurship, with the company confirming that his exit will not affect the studio's operations [6] - Tencent announced that "Honor of Kings World" is set to launch in spring 2026 [6] International Developments - A recent report indicated that 26% of European developers faced layoffs in 2025, with 13% leaving the gaming industry altogether [8] - The price of in-game items for "CS2" plummeted following a patch that expanded the trade-up system, with the price of the Karambit Doppler skin dropping from over $2,700 to around $1,100 [10] - Koei Tecmo Holdings significantly raised its profit forecast for the first half of the 2025 fiscal year (April to September), expecting both ordinary profit and net profit to double, driven by strong game sales and effective cost control [11]

Group 1 - The core viewpoint of the article highlights that the approval volume of game licenses in September remains high, covering various types of products and well-known manufacturers [1] - From the beginning of the year to date, a total of 1,195 domestic games have been approved, with 145 games approved in September, including titles from Tencent, miHoYo, NetEase, and others [1] - For imported games, a total of 80 games have been approved this year, with 11 games approved in September, including titles from Chuangmeng Tiandi and Xinghui Games [1] Group 2 - The game ETF (516010) tracks the animation and gaming index (930901), which selects listed companies involved in animation production, game development, platform operation, and related industry chains to reflect the overall performance of the sector [1] - The index focuses on innovation and growth in the animation and gaming field, covering the entire industry chain from content creation to distribution channels, showcasing distinct industry representation and market vitality [1]

Industry Dynamics - In August 2025, China's gaming market revenue reached 29.263 billion yuan, showing a month-on-month increase of 0.61% but a year-on-year decline of 13.01% [3] - The actual sales revenue of domestically developed games in overseas markets was 1.68 billion USD, reflecting a month-on-month decrease of 0.79% and a year-on-year decrease of 10.66% [3] - The year-on-year decline in revenue is attributed to the high revenue base from the previous year due to the success of the game "Black Myth: Wukong," and the lack of similarly impactful new releases during the current period [3] Game Licensing - On September 24, the National Press and Publication Administration issued licenses for 156 games, including 145 domestic and 11 imported titles [4] - Notable titles include Tencent's "Return Ring," NetEase's "Star Drawing Friends," and miHoYo's "Honkai: Inheritance Spirit" [4] Domestic Company News - NetEase announced the shutdown of "The Legend of the Condor Heroes," effective November 24, due to the expiration of its IP cooperation with Minghe Publishing and adjustments in operational strategy [5] - Tencent's UK studio Splash Damage has been sold to overseas private equity investors; the studio was previously acquired by Tencent in 2022 [6] - Tom Cat's former chairman Wang Jian reduced his holdings by 31.58 million shares, exiting the major shareholder position, with his remaining stake now below 5% [7] - Wang Jian's history of share reductions includes 71 transactions from 2019 to 2020, totaling over 700 million yuan, raising concerns about the company's fundamentals [8] - Kingsoft's subsidiary, Kingsoft Game, has formed a strategic partnership with Sega and Rovio to reintroduce the popular IP "Angry Birds" to the Chinese market [9] Regulatory Compliance - The Mexican Ministry of Finance proposed an 8% special tax on games containing "violent" content as part of its 2026 budget plan, applicable to both domestic and foreign companies [10] Major Transactions - Electronic Arts (EA) is reportedly negotiating a privatization deal valued at approximately 50 billion USD (about 356.74 billion yuan), which could become the largest leveraged buyout in history [11] eSports Events - The qualification matches for the 2025 League of Legends World Championship concluded, with teams BLG, AL, TES, and iG representing the LPL region [12]

Summary of the Gaming Industry Conference Call Industry Overview - The gaming industry in China has maintained high activity levels since the summer, with a market size of approximately 29 billion yuan in July, reflecting a year-on-year growth of nearly 5% [1][4] - Mobile game revenue showed a slight increase, with several new games performing well, such as "Douluo Dalu: Soul Master World," which generated over 100 million yuan in its first month [1][4] - The market size remained stable in August compared to July, but there was a year-on-year decline, with mobile game revenue decreasing by 4% [1][4] Key Insights - The overall performance of the gaming industry has been positive this year, supported by a relaxation of policies and an acceleration in supply growth [2] - The industry is in an upward trend, with new game launches significantly boosting company performance [2] - The release of 156 game licenses in September, including 145 domestic and 11 imported, indicates a healthy regulatory environment [6][7] Company-Specific Developments - Huatuo's core overseas products have shown strong performance, leading to an 11% month-on-month increase in revenue for Diandian Interactive [8] - Giant Network's game "Supernatural" has exceeded expectations in revenue stability, with plans to launch an overseas version next year [8] - Key products approved include new titles from Tencent, NetEase, and miHoYo, indicating strong competition among major players [6][7] International Market Performance - Chinese self-developed games generated nearly 1.7 billion USD in overseas revenue in July, with a year-on-year growth in single digits [5] - Despite a 10% year-on-year decline in August due to high base effects, some products like KingShow's "Frost Knight" maintained strong growth, with a 20% month-on-month increase [5] Future Trends - The legendary game market is substantial, with annual revenues of 30-40 billion yuan, and more legendary games are expected to enter the market [9] - Future growth will come from expanding partnerships with larger companies, the introduction of 25 key legendary games, and enhancements in PC, live streaming, and item trading functionalities [9] Product Development and AI Initiatives - Kaiying Network is entering a new product cycle, with "Blood of the River and Lake" launched in South Korea and plans for several new titles by 2025-2026 [10] - The AI product EVE is expected to launch by the end of the year, and the AI gaming platform Soon may begin commercialization [10] Performance of Key Companies - Gigabit has consistently outperformed expectations, with "Sword of the Hero" showing strong overseas revenue growth of 14% month-on-month in August [11] - Perfect World and Shenzhou Taiyue have new titles in development, with Perfect World's "Yihuan" showcased at the Tokyo Game Show [12] Overall Market Sentiment - The gaming industry remains strong, with companies performing well even in the traditionally slower month of September [13] - Continued investment opportunities are recommended in companies such as Giant Network, Kaiying Network, ST Huatuo, Perfect World, Gigabit, Shenzhou Taiyue, and Sanqi Interactive [13]

Core Viewpoint - The gaming industry is expected to perform well in the third quarter due to the release of quality content, with a positive long-term outlook for the sector [1]. Group 1: Market Performance - The media index increased by 0.63%, ranking 5th among 31 industries, underperforming compared to the Shanghai and Shenzhen 300 index (up 1.07%) and the ChiNext index (up 1.96%) [2]. - The total number of domestic game licenses issued this year has reached 1,195, significantly surpassing the 959 licenses issued during the same period last year [2]. Group 2: Game License Distribution - In September, 145 domestic game licenses were issued, including titles from major companies such as Tencent, NetEase, and miHoYo [2]. - Additionally, 11 imported game licenses were granted, featuring notable titles like "Super Hole" and "MapleStory: New Chapter" [2]. Group 3: Market Size and Trends - In August, the domestic gaming market size was 29.263 billion yuan, showing a month-on-month growth of 0.61% but a year-on-year decline of 13.01% due to high base effects from the previous year [3]. - Mobile game revenue was 21.521 billion yuan, with a month-on-month increase of 0.85% and a year-on-year decrease of 4.25%, while client game revenue was 6.563 billion yuan, showing a month-on-month decline of 1.11% but a year-on-year increase of 17.59% [3].

Group 1 - The A-share gaming stocks have shown strong performance, with companies like Iceberg Network rising nearly 10%, and others such as Electric Soul Network, Perfect World, and 37 Interactive Entertainment also experiencing gains. The gaming ETF (159869) has surged over 3.5% [1] - In the past 10 trading days, the gaming ETF (159869) has seen a net inflow of funds amounting to 1.062 billion yuan, indicating strong investor interest [1] - The National Press and Publication Administration announced the approval of 156 games in September, including 145 domestic games and 11 imported games, marking the third month this year with over 150 game approvals [1] Group 2 - Among the newly approved games, notable titles include Tencent's "Return to the Ring," NetEase's "Starry Friends," and Mihayou's "Honkai: Inheritance Spirits," which has over 4.07 million pre-registrations [2] - The total number of game approvals this year has reached 1,275, maintaining a stable monthly issuance frequency and high approval numbers [2]

Core Viewpoint - Bilibili (BILI.US) stock rose by 2.8% in pre-market trading following the approval of 156 games by the National Press and Publication Administration, marking the third month this year with over 150 game approvals [1] Group 1: Game Approvals - On September 24, the National Press and Publication Administration released a new batch of game approvals, including 145 domestic games and 11 imported games [1] - This approval marks the third time in 2023 that the monthly number of game approvals has exceeded 150 [1] Group 2: New Game Launch - Bilibili's new strategy card game, "Three Kingdoms: Hundred Generals Card," was revealed at the beginning of the month [1] - The game is currently available for pre-registration and is set to enter its first public test in October [1] - "Hundred Generals Card" is Bilibili's second game based on the Three Kingdoms theme and features a new asymmetrical casual competitive card format [1] Group 3: Stock Performance - As of September 24, Bilibili's closing price was $26.270, with a pre-market price of $27.010, reflecting a 2.82% increase [1] - The stock's 52-week high and low are $31.770 and $14.470, respectively, indicating significant volatility [1] - The total market capitalization of Bilibili is approximately $10.846 billion [1]

Investment Rating - The report assigns an "Increase" rating for the gaming industry, indicating a positive outlook compared to the CSI 300 index, with expected growth exceeding 15% [13]. Core Insights - In September, a total of 145 domestic games received approval, contributing to a total of 1,195 domestic game licenses issued this year, significantly higher than the 959 licenses issued in the same period last year [6][8]. - The gaming market in August showed stability, with a total revenue of 29.263 billion yuan, reflecting a month-on-month growth of 0.61% but a year-on-year decline of 13.01% [6][8]. - The report highlights the strong performance of leading products, such as Tencent's "Delta Action," which reached 30 million daily active users in September, and the anticipated revenue of over 300 million yuan for the new game "Valorant: Energy Action" in its first month [6][8]. Summary by Sections Game License Approvals - In September, 145 domestic games and 11 imported games received approval, with notable titles from Tencent, NetEase, and others included in the list [6][8]. - The approval rate for domestic game licenses has increased, with an average monthly issuance of 132.8 licenses in 2023, up from 88.8 in 2021 and 108.8 in 2022 [6][8]. Market Performance - The gaming market's revenue for August was 29.263 billion yuan, with mobile games generating 21.521 billion yuan and client games 6.563 billion yuan [6][8]. - The report notes that client games are experiencing growth due to cross-platform products, which enhances their profitability compared to mobile games [6][8]. Investment Recommendations - The report recommends companies with strong content reserves and solid fundamentals, including Kain Network, 37 Interactive Entertainment, Giant Network, Perfect World, and others [6][8]. - Specific stock recommendations include Kain Network (28.94 yuan), 37 Interactive Entertainment (22.49 yuan), and Giant Network (44.87 yuan), all rated for "Increase" [7][8].

Core Points - In September, 145 domestic online games and 11 imported online games received approval from the National Press and Publication Administration [1] - A total of 1,275 games have been approved in 2025, including 1,195 domestic and 80 imported games [1] - Major companies like NetEase and miHoYo have multiple key games approved, including "Starry Friends" and "Honkai: Origin Spirits" [1][2] Industry Summary - The new batch of approved domestic games includes 135 mobile and mobile-casual games, 2 client games, and 1 mobile + web game [1] - The continuous issuance of game approvals has positively impacted the gaming industry, with the Shenwan gaming industry index rising 85% this year, ranking third among all Shenwan secondary industries [2] - On September 24, the Shenwan gaming industry index surged by 3.63%, with several A-share gaming companies, including ST Huayuan and Giant Network, seeing over 100% increase in stock prices [2] Company Summary - A-share companies like Giant Network and 37 Interactive Entertainment have games approved, including "Hot Blood Dynasty: Basketball" and "Endless Night" [1] - Hong Kong-listed companies Tencent and NetEase have also seen significant stock price increases this year, with gains of 56.87% and 76.42% respectively [3]

Group 1: Industry Performance - The gaming industry index closed up 2.13% on September 17, with key stocks like Kaiying Network rising by 9.01% and others like Giant Network and Xunyou Technology increasing by over 4% [1] - Year-to-date, the gaming industry index has increased by 82.61%, ranking third among all Shenwan secondary industries, making it one of the best-performing sectors this year [1] - Six gaming stocks have doubled in price compared to the end of last year, with ST Huatuo, Giant Network, and G-bits showing significant increases of 286.19%, 261.23%, and 157.39% respectively [1] Group 2: Market Growth - The gaming market revenue showed significant growth, reaching 197.08 billion yuan from January to July 2025, a year-on-year increase of 12.58% [2] - Projected revenues for the gaming market are 265.88 billion yuan in 2022, 302.96 billion yuan in 2023, and 325.78 billion yuan in 2024, indicating robust industry vitality [2] Group 3: Esports Development - The esports industry in China generated 12.76 billion yuan in revenue from January to June 2025, reflecting a year-on-year growth of 6.1% [3] - The Chinese esports industry is expanding its influence overseas, particularly in regions like Latin America, in addition to traditional markets in East and Southeast Asia [3] Group 4: Supply and User Growth - The steady growth in industry revenue is attributed to the continuous release of new games, with a notable increase in the number of game approvals [4] - As of June 2025, the number of online game users in China reached 584 million, an increase of 26.92 million from December 2024, representing 52% of the total internet users [5] - The proportion of female gamers has risen to 48%, up 3.1 percentage points from the end of 2024, contributing to market expansion and innovation [5] Group 5: International Expansion - The gaming industry's international business has become a significant growth point, with 20 A-share gaming companies reporting overseas revenue of 21.82 billion yuan in the first half of 2025, a year-on-year increase of 30.43% [6] - ST Huatuo reported overseas revenue of 8.96 billion yuan, accounting for 52.06% of its total revenue, highlighting its strong international presence [6] Group 6: Institutional Investment - Five gaming stocks received significant QFII holdings by the end of the first half of the year, with Xunyou Technology, ST Zhongqingbao, and Iceberg Network leading in QFII market value [7]