Summary of Conference Call on Gaming Industry Investment Opportunities Industry Overview - The gaming industry is benefiting from tax incentives, relaxed refinancing policies, and local government support, particularly in regions like Guangzhou and Zhejiang, which have introduced favorable regulations for industry development [1][2][4]. Core Insights and Arguments - **New Game Cycle Performance**: The new game cycle has exceeded expectations, with notable performances from Giant Network's "Supernatural Action Group" and G-bits' "Wandao" and "Sword of the Xuanyuan," indicating potential upward adjustments in annual revenue and performance for 2025 [1][2]. - **AI Product Integration**: The acceleration of AI product implementation is significant, with the founder of Mihayou launching AI-native games, Tencent reporting increased product usage time after AI integration, and companies like Kain and Giant conducting AI commercialization tests, all contributing to sector growth [1][2][4]. - **Market Growth Data**: The domestic gaming market saw a year-on-year growth of over 20% in April, with leading companies like Tencent and data from the gaming committee reflecting high industry prosperity, contradicting previous market stagnation expectations [3][4]. - **Supportive Government Policies**: Since March 2025, various government levels have introduced supportive policies, including a framework for network publishing and technology innovation, creating a conducive environment for the gaming industry [4]. Future Development Trends - The future outlook for the gaming industry is optimistic, driven by supportive policies and technological advancements. The SLG (Simulation and Strategy Game) segment is highlighted for its long-term operational characteristics, with products like Shenzhou Taiyue's "Sunrise City" achieving peak revenue in its fifth year [4][6]. - The commercialization of AI is expected to further propel industry growth, with an optimistic forecast of two to three new game launches annually over the next few years, effectively mitigating the volatility of performance cycles [4]. Recommended Companies for Investors - The following companies are recommended for investment: Tencent, Century Huatong, Kain, Giant Network, G-bits, and Perfect World. Additionally, smaller but promising companies such as Shengtian Network, Iceberg Network, and Dihun Network are also worth attention [5]. Importance of SLG Segment - The SLG segment holds a crucial position in the current market due to its ability to provide stable revenue through long-term operations. Companies like Kain, Giant, and G-bits are planning to expand into this segment, which will help address past performance volatility and support long-term valuation [6].