Summary of the Gaming Industry Conference Call Industry Overview - The gaming industry in China is experiencing a strong growth cycle, with actual sales revenue in the first half of 2025 reaching approximately 85.7 billion yuan, a year-on-year increase of about 18% [1][3] - Mobile gaming revenue grew by 20% to 63.6 billion yuan, indicating high industry vitality driven by premium games that enhance players' willingness to pay [1][3] Key Insights - A-share gaming companies are expected to outperform last year due to a decline in market share of major players like Tencent, NetEase, and miHoYo, which provides a buying window for other firms [1][5] - Regulatory policies have shifted positively, with an accelerated issuance of domestic game licenses, increasing from under 90 to 120-130 per month, and stable issuance of import licenses, boosting investment sentiment in the sector [2][12] - In Q1 2025, listed companies reported a 21% year-on-year revenue growth, with deferred revenue continuing to rise and a decrease in sales expense ratios, reflecting strong performance and a reduction in competitive spending [1][5] Competitive Landscape - The competitive landscape remains stable, with no major product launches from large companies in July and August, providing an opportunity for A-share firms to release new games [7][12] - Notable games that exceeded expectations include Jiubite's "Wanjian Changsheng" and other titles from various companies, leading to upward revisions in profit forecasts for 2026, with valuations expected to stabilize around 15 times earnings [7][12] AI Technology Impact - AI technology is seen as having significant potential in the gaming industry, with recent developments in AI products, although market reactions have been muted [8][13] - The expectation is that as more AI-assisted products are launched, the gaming sector will benefit from improved performance and cost efficiencies [8][13] Noteworthy Companies and Products - Recommended companies include Giant Network, Jiubite, Perfect World, and Kaiying Network, which are actively launching new products and are expected to benefit from the summer release window [6][12] - Giant Network's upcoming game "Supernatural Action Group" is gaining attention, with strong download and revenue potential anticipated during the summer [9] - Perfect World is set to launch several new products, including a major update for "Zhu Xian World" and a mobile version of "Zhu Xian 2" [10] - Jiubite's "Nine Woods of the Wild" and Kaiying Technology's rapid product release schedule are also highlighted as significant developments [11] Overall Industry Trends - The overall trend in the gaming industry is positive, with regulatory support, a favorable product launch window for A-share companies, and a decrease in competitive pressure leading to increased revenue and deferred income [12][15] - The industry is expected to continue benefiting from the positive sentiment surrounding AI applications, which could further enhance market interest and investment [13]