Core Insights - The gaming industry in China has shifted from a reliance on channel resources for user acquisition to a focus on "buying traffic" as a core strategy for growth, especially with the rise of 4G and social media platforms [1][5] - As domestic traffic growth plateaus, overseas markets have become the new battleground for user acquisition, but challenges such as fragmented platforms and differing attribution mechanisms complicate this transition [1][6] - The industry is now facing the challenge of developing sustainable growth models through refined operations, brand building, and technological empowerment amidst rising costs and diminishing returns from traditional advertising methods [1][14] Group 1: Historical Context - In the early stages of the Chinese gaming industry, various promotional methods were employed to attract players, with channels playing a crucial role in game distribution [4] - The rise of mobile gaming around 2015 led to app stores becoming the primary distribution channels, significantly impacting the autonomy of game developers [4][5] - The introduction of developer support programs by major smartphone manufacturers and platforms further solidified the dominance of channels in the gaming market [4] Group 2: Overseas Expansion - Chinese gaming companies are increasingly investing in overseas markets, but many established domestic user acquisition strategies have not translated well internationally [6][7] - The overseas market is characterized by a fragmented channel landscape, requiring tailored advertising strategies for different platforms [7][8] - Local teams are being formed to adapt to the unique characteristics of various international markets, moving away from a one-size-fits-all approach [9][10] Group 3: Privacy Compliance - Stricter privacy regulations, such as GDPR and Apple's ATT, have significantly impacted the advertising landscape, making user tracking and audience targeting more challenging [11][12] - The industry is adapting by fostering broader collaborations and data sharing among platforms, service providers, and advertisers to enhance targeting precision within compliance frameworks [12] Group 4: Cost and Effectiveness - Despite fluctuations in the gaming market, global user acquisition costs continue to rise, with significant increases projected for top mobile games [13][14] - The rising costs have led to diminishing returns from traditional performance advertising, prompting a shift towards a balanced approach that includes both brand and performance advertising [14][15] - The introduction of AI technologies is seen as a key driver for improving advertising efficiency and effectiveness, with companies increasingly adopting automated and intelligent systems for user acquisition [15][16]

Core Insights - The article highlights the success of several low-profile gaming companies in Wuhan, particularly focusing on Wuhan Zhongyu, which has developed the top hunting mobile game "Hunting Sniper" that has seen significant revenue growth and popularity in the global shooting game market [1][6]. Company Overview - Wuhan Zhongyu was established in 2014, with a core team that has been involved in mobile game development for nearly 20 years. The company initially focused on mid to heavy-weight game genres before expanding into lighter categories [3][6]. - "Hunting Sniper" was launched in 2023 and has quickly gained traction, achieving a revenue of $55 million in its first year, marking a 292% year-on-year growth [1][12]. Product Performance - "Hunting Sniper" has become a top contender in the global shooting mobile game market, ranking among the top 10 shooting games worldwide. The game has generated over $55 million in revenue and has been downloaded more than 18 million times [2][12]. - The game is particularly popular in the U.S., with over 60% of its revenue coming from this market. The average player is predominantly male, around 35 years old, including core gamers and outdoor enthusiasts [12][30]. Marketing Strategy - The marketing strategy for "Hunting Sniper" heavily utilizes TikTok, with approximately 36% of its advertising spend allocated to this platform. The game has seen significant engagement, with some promotional videos achieving over 380 million views [14][24]. - The game employs a unique advertising approach that emphasizes immersive gameplay and dramatic scenarios to attract users, enhancing the overall user experience [16][18]. User Engagement and Retention - The game incorporates various retention mechanisms, including league rankings, achievement systems, and seasonal events to maintain player interest and engagement [28][30]. - Recent efforts to improve user acquisition have focused on enhancing user retention due to rising costs associated with acquiring new users in a competitive market [21][22]. Localization Efforts - The company has increasingly prioritized localization, launching versions of the game tailored to different regions and languages, which has contributed to a noticeable increase in downloads from emerging markets [30].

Core Viewpoint - The company, Ice River Network, is experiencing revenue growth but significant net profit losses in 2024, primarily due to increased marketing expenses related to game user acquisition [1][2][3] Financial Performance - In 2024, Ice River Network achieved revenue of 2.788 billion yuan, a year-on-year increase of 0.17%, while net profit showed a loss of 249 million yuan, a decline of 191.12% [1][2] - The adjusted net profit, excluding non-recurring gains and losses, was a loss of 317 million yuan, a drop of 257.13% year-on-year [2] - Quarterly revenue for 2024 was 560 million yuan, 646 million yuan, 777 million yuan, and 805 million yuan, with net profits of -446 million yuan, -69 million yuan, 48 million yuan, and 218 million yuan respectively [2] Marketing and User Acquisition - The company significantly increased its marketing spend on overseas markets and new game launches, particularly for titles like "Hero Clash," "Epic War," and "Titan War," leading to a substantial rise in sales expenses [2][3] - In Q1 2024, sales expenses reached 855 million yuan, a 168.36% increase year-on-year, with user acquisition costs for the aforementioned games totaling 683 million yuan, accounting for 79.93% of total sales expenses [2] Game Performance and ROI - "Hero Clash," a key product, had over 25.7 million registered accounts by mid-2024, but its marketing costs were 4.75 billion yuan against revenues of 2.25 billion yuan, resulting in a marketing cost-to-revenue ratio of 210.88% [3] - Other games also showed high marketing cost ratios, with "Titan War" at 179.26% and "Merge Topia" at 137.85% [3] Regulatory Issues - The company faced scrutiny from the Shenzhen Securities Regulatory Bureau for irregularities in financial reporting, including improper consolidation of financial statements and failure to recognize impairment losses in a timely manner [6][7] - The company and its executives received warnings from the regulatory body due to these issues, which could impact future financial disclosures [6][7]