Core Insights - The BW2025 event highlighted tensions between two major games, NetEase's "World Beyond" and Paper Games' "Love in the Deep Space," leading to operational conflicts and public backlash against the event organizers [1][3] - Despite the initial disputes, the event ultimately provided a fulfilling experience for players, emphasizing the emotional value derived from immersive activities in otome games [3][9] Group 1: Event Conflicts - The first day of BW2025 saw a conflict between "World Beyond" and "Love in the Deep Space," with the former accusing the event organizers of poor planning regarding queue areas [1] - "World Beyond" announced it would not participate in future BW events due to the mishandling of space allocation, which drew significant media attention [1][3] - The aftermath of the event saw a rise in discussions about "withdrawal" among otome game players, indicating a strong emotional response to the experiences provided [3][9] Group 2: Immersive Experiences - The event focused on creating dream-like experiences for female players, with "Love in the Deep Space" featuring a wedding-themed setup that enhanced player engagement [4][6] - The immersive activities included professional interactions that avoided traditional character cosplay, allowing for a more abstract and imaginative engagement with the game [8] - The emotional impact of these experiences was profound, leading to a sense of identity affirmation and community among players, as evidenced by their strong emotional reactions [9][12] Group 3: Character Engagement - The character "Xia Yizhou" from "Love in the Deep Space" became a highlight of the event, with the actor portraying him receiving emotional responses from players, further bridging the gap between virtual and real experiences [10][12] - The successful integration of character cosplay into the event allowed players to connect more deeply with the characters, enhancing their loyalty and emotional investment in the games [12][13] - The phenomenon of players experiencing "withdrawal" reflects the powerful emotional connections formed through these immersive interactions, indicating a growing market for such events [9][12]

Investment Ratings - The report maintains an "Overweight" (OW) rating on 37IE, an "Equal Weight" (EW) rating on G-bits, and an "Equal Weight" (EW) rating on Perfect World [1][3][4]. Core Insights - China's game industry has experienced high-teens percentage revenue growth year-to-date, surpassing the previous year's growth of 8%, indicating improved demand despite macroeconomic challenges [2]. - The report highlights successful new game releases and the stabilization of evergreen games as key factors driving the rebound in performance for 37IE, G-bits, and Perfect World [2][10]. Summary by Company 37IE - The price target is set at Rmb23.00, reflecting a 15x 2026 estimated P/E ratio, with an attractive 6% dividend yield [3][17]. - Anticipated revenue growth is supported by new titles such as "Soul Land," expected to generate Rmb300-500 million in its first month and Rmb1.5-2 billion overall in 2025 [16][17]. - The company has a robust pipeline with over 40 self-developed and licensed games, indicating sustained growth momentum [16][34]. Perfect World - The price target is raised to Rmb16.30, based on an 18x 2026 estimated P/E ratio, reflecting strong growth expectations driven by the anticipated title "Neverness to Everness" [4][29]. - The company is expected to see an 18% year-over-year revenue growth in 2025, with significant contributions from new titles [28][32]. - The release of "Zhuxian 2" on August 7 is also expected to be a key growth driver [4][31]. G-bits - The price target is increased to Rmb330, derived from a 15x 2026 estimated P/E ratio, reflecting a busy 2025 but a slower 2026 due to a weaker pipeline [5][22]. - Revenue growth is projected at 22% and 29% quarter-over-quarter and year-over-year in 2Q25, driven by new titles [20][22]. - The company is expected to experience alternating busy and slow product years, with 2025 being particularly strong [18][22].

Core Viewpoint - Churchill Downs Incorporated (CDI) has signed definitive agreements to acquire a majority of the equity interests in Casino Salem, a joint venture in New Hampshire, which will feature historical horse racing machines and a charitable gaming, entertainment, and dining destination [1][5]. Company Overview - CDI has been creating entertainment experiences for over 150 years, with its most iconic asset being the Kentucky Derby. The company is headquartered in Louisville, Kentucky, and has expanded through acquisitions and operations in live and historical racing, online wagering, and regional casino gaming properties [6]. Casino Salem Development - Casino Salem is located at The Mall at Rockingham Park, approximately 30 minutes from downtown Boston. Local developers Joe Faro and Sal Lupoli will retain ownership, ensuring their experience contributes to the venue's success [2]. - The initial phase of Casino Salem opened on July 9, featuring around 100 historical racing machines and 13 live table games. Future phases will include venue rebranding, gaming floor expansion, and new food and beverage concepts [3]. - CDI aims to create a regional destination in Salem to attract patrons from the growing New England market, with plans to support charitable organizations throughout New Hampshire [4]. Financial Aspects - The Salem Transaction will be financed through CDI's existing credit facility, with the closing subject to customary conditions, including approval from the New Hampshire Lottery Commission. The transaction is expected to close in the third quarter of 2025 [5].

Core Insights - The mobile gaming market is experiencing intense competition as summer approaches, with notable performances from established titles and emerging new games [1] Download Rankings - Tencent's "Delta Action" maintains its position at Top 1, while "Honor of Kings" ranks at Top 3, and the new game "Brawling Chef" from Friendship Time secures Top 2 [1][12] - A total of 8 new games entered the Top 30 download rankings in June, with "Brawling Chef" showing particularly impressive performance, achieving over 8 million pre-registrations before its launch [4][6] Game Categories - Action and adventure games dominate the new entries, with 7 games each, followed by 6 role-playing games [8] - "Supernatural Action Team" from Giant Network saw a significant rise, climbing 16 spots in the rankings, highlighting its unique blend of action, adventure, and strategy [8] Revenue Rankings - In the revenue rankings, Tencent's "Honor of Kings" and "Peace Elite" occupy Top 1 and Top 2, respectively, while "Endless Winter" from Dot Interactive ranks at Top 3 [12] - Eight new products entered the revenue rankings, with "Three Kingdoms: Strategy of the World" and "Forever Blue Planet" being the standout titles [14][19] Marketing Strategies - "Brawling Chef" utilized a multi-channel marketing strategy, including collaborations with influencers and traditional IP tie-ins, to enhance its visibility and player engagement [6][23] - "Three Kingdoms: Strategy of the World" implemented a multi-platform release strategy, supporting cross-platform data sharing, which contributed to its strong performance [19] Conclusion - The mobile gaming landscape in June showcased a blend of innovative new titles and the sustained success of established franchises, emphasizing the importance of content innovation and targeted marketing strategies in navigating market challenges [23]

Core Insights - The report from Qimai Data reveals the top mobile games in terms of downloads and revenue for June 2025, highlighting the dominance of Tencent's titles in both categories [1][7]. Download Rankings - Tencent's "Delta Action" continues to hold the top position, while "King of Glory" ranks third. "Brawling Chef," developed by Friendship Time, has made a strong entry at second place [1][5]. - A total of eight new games entered the download rankings, with "Brawling Chef" achieving over 8 million pre-registrations before its launch [5][12]. - The most represented genres in the download rankings are action and adventure games, each with seven entries, followed by role-playing games with six [7][13]. Revenue Rankings - In the revenue rankings, Tencent's "King of Glory" and "Peace Elite" occupy the first and second positions, respectively, while "Endless Winter" from Didi Interactive ranks third [1][9]. - Eight new games entered the revenue rankings, with "Three Kingdoms: Strategize" and "Endless Winter" being notable newcomers [11]. - Tencent has a significant presence in the revenue rankings, with 11 titles listed, while NetEase has five [13].

Group 1 - The public beta of "Douluo Dalu: Hunting Soul World" by 37 Interactive Entertainment started on July 11, featuring open-world MMO gameplay that appeals to fans of the original IP [1] - The dark fantasy action game "Mingmo: Yuanshu Zhi Yu" showcased a complete chapter for the first time at the BW2025 exhibition, highlighting its gameplay and Cthulhu-style narrative [3] - The retro flying shooting mobile game "Winding Up" by Mutong Technology began its return test on July 10 [4] Group 2 - Multiple games announced shutdowns, including the Huawei channel version of "Minecraft," which will cease operations on October 8, 2025, and "Second Galaxy," which will stop operations on October 9, 2025, due to business strategy adjustments [6][8] - The 2025 Esports World Cup (EWC2025) commenced on July 7 in Riyadh, Saudi Arabia, featuring a record-breaking participation of 22 clubs and 23 competition projects from China [9] - The BW2025 exhibition, Asia's largest ACGN event, opened from July 11-13 in Shanghai, attracting 700 exhibitors and over 1,000 content creators, with ticket sales selling out in 35 seconds [11] - Tencent Games announced the establishment of the K9 Cooperation Department on July 8, focusing on the long-term transformation and strategic cooperation of Ubisoft's core IPs [13]

Core Viewpoint - The Nintendo Switch 2 (NS2) has introduced 4K HDR output, but users are experiencing difficulties with HDR settings and overall visual quality, raising concerns about the device's HDR implementation compared to competitors like Sony's PS5 and Microsoft's Xbox [1][4][30]. Group 1: HDR Implementation Issues - Users report that adjusting HDR settings on NS2 is cumbersome and results in unsatisfactory visual experiences, with many encountering similar problems online [3][4]. - The HDR adjustment process on NS2 is less intuitive than on PS5, requiring excessive clicks to achieve desired brightness levels, which can lead to frustration [20][24]. - NS2 lacks a method to determine minimum brightness levels, making it difficult to create an accurate brightness curve for optimal HDR performance [24][30]. Group 2: Technical Aspects of HDR - HDR video content is pre-produced with metadata that allows for accurate brightness mapping, while HDR in games is generated in real-time, complicating the adjustment process [5][9]. - The NS2's HDR adjustment only includes two screens for peak brightness and overall brightness, lacking comprehensive controls found in other gaming consoles [18][22]. - The absence of a standardized HDR adjustment process across devices contributes to inconsistent user experiences, with calls for a unified HDR standard in the industry [31]. Group 3: Recommendations and Standards - HDTVTest suggests enabling HGIG (HDR Gaming Interest Group) on compatible TVs to improve HDR performance on NS2, but this feature is not universally available [26][30]. - The current state of HDR standards is criticized for being chaotic, with a need for a unified approach to enhance user experience and simplify adjustments across different platforms [31].

Core Insights - The SLG (Simulation Game) genre has experienced a significant surge, with a year-on-year growth of 180%, making it one of the fastest-growing categories in the mini-game platform market [1] - Major titles like "Rate of the Land" and "Three Kingdoms: Strategy" have launched mini-game versions to tap into this emerging market, achieving high rankings in the WeChat mini-game sales charts [3][5] - The trend of integrating SLG into mini-game platforms reflects a shift towards lighter gameplay, aiming to attract a broader user base and enhance user engagement through social features [5][18] Industry Trends - The SLG products on mini-game platforms can be categorized into two types: those that blend SLG with casual gameplay (e.g., "Pocket Warrior") and traditional SLG titles that maintain their core gameplay [3][5] - The mini-game versions of established SLG titles have undergone significant adaptations, such as simplified mechanics and vertical screen formats, to cater to the platform's user experience [10][12] - The development environment for mini-games has matured, allowing for the successful adaptation of SLG games, which previously faced challenges in transitioning to lighter formats [16][18] User Demographics - The user demographics for SLG mini-games have diversified, with a notable increase in female users and younger audiences, indicating a shift from the traditional male-dominated user base [18][19] - The introduction of features like "youth servers" in titles like "Rate of the Land" has successfully attracted a younger demographic, enhancing the game's appeal [19][21] Competitive Landscape - The competition within the SLG genre is evolving, with a focus on integrating casual elements and exploring new themes to attract a wider audience [22][23] - The mini-game platform presents a unique opportunity for SLG titles to reach new users, leveraging the platform's social features and lower entry barriers [23][27] - As more SLG products enter the mini-game space, the potential for innovation in gameplay and monetization strategies is expected to increase, reshaping the competitive dynamics of the genre [21][22]

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Investment Rating - The report indicates a positive outlook for the equity market under the "anti-involution" policy, suggesting potential for improved margins despite a near-term negative impact on GDP growth [8][12]. Core Insights - The report discusses China's shift towards an "anti-involution" policy aimed at controlling excess supply-side capacity, which has contributed to deflation and reduced corporate profitability [2][3]. - It highlights the historical context of supply-side reforms in China, noting that the current phase is reminiscent of past capacity rationalizations that began in mid-2014 [4][7]. - The report identifies sectors with excess capacity, including Food Processing, Autos, Electronics, Chemicals, and Healthcare, which could see margin improvements if utilization rates increase [8][12]. Summary by Sections Supply-Side Reforms - The report outlines three phases of China's previous capacity rationalization cycle, emphasizing that the current situation is in the early stages of Phase 1, characterized by policy anticipation and a "hope rally" [4][7]. - It notes that low utilization rates across various sectors indicate a need for improved supply discipline, with recent policy comments from the Central Commission for Finance & Economic Affairs being particularly significant [7][8]. Sector Analysis - The report suggests that while addressing supply-side excesses may weigh on GDP growth in the short term, it is likely to benefit stock performance due to better margins [8][12]. - Solar Glass is highlighted as a sector to watch, with potential for significant upside if government-enforced capacity discipline is implemented, suggesting a possible increase in stock valuation from 0.9x P/B to 3x P/B [8][12]. Investment Themes - The report identifies three key investment themes: yield stocks benefiting from low interest rates, consumer leaders poised for growth, and companies that will benefit from improved supply discipline [12][13]. - Specific stock recommendations include Petrochina, CR Power, and Ping An for yield stocks, and Alibaba, Tencent, and JD for consumer leaders [13].