Core Viewpoint - The article highlights the challenges faced by Kingsoft's gaming division, particularly in the context of declining revenues and increased marketing expenses, while emphasizing the company's focus on long-term game development and IP ecosystem building [2][3][4]. Financial Performance - Kingsoft's gaming and other business revenue for the first half of the year was 1.988 billion yuan, accounting for approximately 43% of total revenue, but this represents a 10% decline compared to the same period last year [2]. - In the second quarter, the revenue from this segment was 0.952 billion yuan, showing a significant year-on-year decrease of 26% [2]. Marketing Expenses - The company incurred marketing expenses of 0.765 billion yuan in the first half of the year, a 19% increase year-on-year, aimed at supporting new game launches and enhancing promotional efforts [6]. - Despite the increase in marketing spending, the gaming revenue did not grow, raising concerns among investors about the effectiveness of these expenditures [6]. Game Portfolio and Challenges - Kingsoft's main gaming products include the "Jianxia Qinyuan" series, "Chunbai Jinzhu," and "Jiexianji," with the "Jianxia Qinyuan" series being a long-standing title in the market [6][13]. - The "Jianxia Qinyuan" series faces challenges as its core player base ages, leading to decreased engagement and spending [6]. - New titles like "Jianxia Qinyuan: Zero" have not met expectations, with initial rankings dropping significantly after launch [7]. Competitive Landscape - Compared to competitors like Tencent and NetEase, Kingsoft's gaming performance has been notably weaker, with Tencent's gaming revenue reaching 118.7 billion yuan in the first half of the year, a 32.6% share of total revenue [10]. - Tencent's gaming revenue grew by 22% year-on-year in the second quarter, while NetEase also reported a 13.7% increase, highlighting Kingsoft's struggles in a competitive market [10][9]. Industry Issues - The gaming industry is facing challenges from "black and gray market" activities, which disrupt the gaming ecosystem and affect player retention and spending [11]. - Kingsoft has acknowledged the need for improved measures to combat these issues, which have been detrimental to its gaming business [11]. Player Feedback and Game Quality - Player feedback on new titles like "Jiexianji" has been largely negative, with complaints about gameplay balance, depth, and overall experience [15]. - The game "Chunbai Jinzhu" also received criticism for its shooting mechanics and weapon design, indicating broader quality issues within Kingsoft's game offerings [15][16].