Group 1 - The core viewpoint of the article is that China's gaming industry is transitioning from rapid expansion to a phase of "high-quality growth," facing deep restructuring in strategy, monetization logic, and market structure [1][2][5] - The report by AppsFlyer indicates that 2025 will be a critical turning point for the global gaming industry, moving from "traffic dividends" to "structural changes," with a nearly 400% increase in global game app installations since 2016, but entering a growth plateau starting in 2024 [1][2] - The gaming industry is shifting from "expansion" to "efficiency," with rising customer acquisition costs and scarce user attention making "high-quality overseas expansion" a strategic imperative for Chinese gaming companies [1][2] Group 2 - The gaming industry is experiencing a "neutralization" trend, where companies must adopt refined operations to tackle high customer acquisition costs, and the industry should focus on adjusting store revenue-sharing models [2][5] - The overall gaming market has been stagnant or slightly shrinking due to global economic slowdown and intensified competition, although "lightweight games" continue to grow, with casual games increasing their share in non-organic installs by 10 percentage points from the first half of 2021 to the first half of 2025 [5][6] - There is a noticeable differentiation in the regions chosen by Chinese gaming companies for overseas expansion, as different regions have varying player preferences for game types and gameplay [6][7] Group 3 - The concept of "mini-games" has not gained the same popularity overseas as in China due to the lack of widely used platforms like WeChat and Douyin, making it necessary to adapt successful domestic mini-games into app formats for overseas markets [8] - Multi-platform strategies are becoming increasingly common among leading companies, driven by inconsistent growth in the mobile gaming market, with efforts to reach new user sources through web-to-app models and developing PC and console versions [9][10] - The PC gaming ecosystem remains underdeveloped, with limited user acquisition channels and insufficient platform support, making effective strategies and tactics a significant challenge for companies [12] Group 4 - The rising customer acquisition costs pose a challenge for Chinese gaming companies, as the industry has shifted from relying on organic growth to needing paid advertising for user acquisition, particularly affecting smaller developers [17][18] - The high revenue-sharing model (typically 30%) in overseas markets is becoming increasingly difficult for developers to accept, especially as profit margins decline, leading to calls for changes in the revenue-sharing structure [18] - The core of refined management is data-driven decision-making, requiring companies to analyze user retention and acquisition metrics in detail to optimize their marketing strategies effectively [19]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of $143 or HKD 223, indicating an expected upside of 18.2% from the current price [6][9]. Core Insights - The company showcased 40+ game updates during its 520 Game Release event, including 9 new games, with 7 being self-developed. The new games cover various themes such as Three Kingdoms, space, Marvel/Destiny IP, ocean adventure, and party life simulation, reflecting a strategy of global positioning, multi-platform deployment, and diverse genre exploration [1][5]. - The company is optimistic about the ongoing positive trends in the gaming industry, particularly in competitive gaming, and is enhancing the longevity of existing games through new gameplay, technological updates, and international events [1][5]. Summary by Sections New Game Releases - "万民长歌：三国" (Three Kingdoms): A self-developed historical strategy game with a seamless 3D map, set to start a trial on Steam on June 10 [2][4]. - "命运：群星" (Destiny: Stars): A mobile shooting game developed in collaboration with Bungie, with pre-registration already open [2][4]. - "漫威秘法狂潮" (Marvel Secret Law): A card RPG mobile game based on the Marvel IP, currently in closed testing with pre-registration available [2][4]. - "unVEIL the world": A strategy card RPG mobile game, developed in collaboration with Shueisha, with a preview released [2][4]. - "头号追击" (Top Pursuit): A PC game combining MOBA, hero shooting, and battle royale elements, set for a paid test from June 6 to June 30 [2][4]. - "无主星渊" (Unclaimed Star Abyss): A space FPS game expected to launch in summer 2025, with a final open test during the Steam Summer Festival [2][4]. - "灵兽大冒险" (Spirit Beast Adventure): A self-developed vertical turn-based MMO mobile game, currently open for pre-registration [2][4]. - "Planet Party Time": A party social game developed by NetEase Rayfire, currently in global testing on Steam, with domestic testing planned for 2025 [2][4]. - "遗忘之海" (Forgotten Sea): An ocean adventure RPG developed by Joker Studio, with pre-registration available [2][4].