Financial Performance - The company reported a revenue of 1.93 billion yuan and an adjusted net loss of 2.08 billion yuan for the fiscal year 2024, marking its largest loss since going public in 2019 [2][3] - The loss was attributed to significant goodwill impairment, investment impairment, and other non-operating expenses, alongside delays in the launch of key self-developed games, particularly "Sword of the Immortal World" [3][4] IP Acquisition and Development - The goodwill impairment primarily stemmed from multiple acquisitions to secure the "Sword" IP rights, including a 213 million yuan purchase of a 51% stake in Beijing Softstar in 2018 and a 642 million HKD acquisition of a 49% stake in 2021 [4] - The total investment in "Sword of the Immortal World," including development costs exceeding 300 million yuan, has surpassed 1 billion yuan, yet the game failed to meet market expectations [5] Game Performance and Market Challenges - "Sword of the Immortal World" launched on February 19, 2024, but only ranked 97th on the iOS game sales chart on its first day and quickly fell out of the top 200 [6] - The game received over 1,000 negative reviews on TapTap, significantly outnumbering positive feedback, indicating poor player reception [6][7] Industry Context - The gaming industry is facing heightened market risks, with companies like the subject company reflecting broader challenges within the sector [8][10] - The domestic gaming market has reached a saturation point, with major players intensifying competition for existing users, leaving less room for smaller developers [10][11] IP Lifecycle and Consumer Expectations - The "Sword" IP is entering a generational transition, with player expectations not being met due to perceived issues in gameplay, graphics, and overall quality [13][15] - Similar challenges are observed with other established IPs, such as the "Condor Heroes," which also struggled to maintain player interest despite significant investment [14][15] Future Prospects - The company identified mini-games as a potential bright spot, with the mini-game "Spring and Autumn Mysteries" achieving over 100 million in revenue and high retention rates since its launch [18][19] - However, the increasing competition in the mini-game sector raises concerns about the sustainability of this segment as more companies enter the market [20]