Core Insights - The 2025 Cologne Game Show highlighted a significant shift in the gaming industry, particularly showcasing the rising prominence of Chinese games despite ongoing global market challenges [1][3][32] - The event demonstrated a strong presence of Chinese developers, with notable titles like "Black Myth: Zhong Kui" and "Shadow Blade Zero" receiving international acclaim, indicating a growing recognition of Chinese gaming quality [4][6][31] Industry Trends - The gaming industry continues to face a downturn, with discussions at the Devcom conference reflecting concerns over mental health and industry failures, yet positive changes are emerging [3][16] - Chinese game developers are increasingly taking bold steps by introducing original titles rather than relying solely on sequels, contrasting with the cautious strategies of many Western developers [17][22] Market Dynamics - The Cologne Game Show attracted over 1,500 exhibitors from 72 countries, emphasizing the global scale of the event and the competitive landscape for game developers [4][10] - Chinese companies like Tencent showcased their extensive portfolios, with significant foot traffic at their booths, indicating a robust engagement with international audiences [8][12] Cultural Impact - The success of titles like "Shadow Blade Zero" and "Black Myth: Zhong Kui" reflects a shift in cultural perception, with international players expressing excitement about Chinese mythology and storytelling [24][26] - The proactive cultural output from Chinese games is reshaping global perceptions, moving from passive reception to active exploration of new themes and gameplay experiences [22][27] Future Outlook - The increasing presence and success of Chinese games at international events suggest a potential shift in the global gaming market, with Chinese developers poised to lead in innovation and creativity [32][35] - The industry's evolution indicates a growing recognition of the Chinese market's importance, prompting international developers to adapt their strategies and engage more deeply with Chinese players [35][37]

Core Viewpoint - The article highlights the significant potential of the game "Crisis Dawn" developed by Hero Games, showcasing its high quality and positive reception at the Cologne Exhibition, indicating a strong market entry strategy for both PC and mobile platforms [1][13]. Group 1: Game Development and Features - "Crisis Dawn" has transitioned from mobile testing to a playable PC version, demonstrating efficient platform expansion [3][4]. - The game has received enthusiastic feedback from players, with many comparing its graphics and atmosphere to "Red Dead Redemption 2," indicating a high level of quality in visual design [8][10]. - The game features a vast open world of 30km x 40km, accommodating up to 5000 players per server, which is a significant achievement in the SOC genre [20][62]. Group 2: Player Engagement and Market Strategy - The game aims to attract both hardcore and casual players by offering a variety of gameplay experiences, including exploration, resource gathering, and combat [27][64]. - "Crisis Dawn" is designed to be user-friendly for light players, with a focus on gradual learning and immersive experiences, which could lead to a larger player base [16][27]. - The game is expected to adopt a monetization strategy that includes microtransactions, appealing to a broader audience while maintaining engagement [27][66]. Group 3: Industry Context and Future Outlook - The SOC market has historically struggled to retain light players, and "Crisis Dawn" seeks to fill this gap by providing a balanced experience for different player types [58][60]. - The game is positioned to leverage the popularity of the zombie genre, which has a built-in audience, enhancing its chances of success in the competitive gaming landscape [62][67]. - Hero Games' commitment to quality and long-term development strategies suggests that "Crisis Dawn" could become a flagship title, potentially reshaping the SOC market [70][72].

Group 1 - The game ETF (159869) has experienced a narrow fluctuation, currently up by approximately 0.5%, with notable stocks such as Youzu Interactive hitting the daily limit, and others like Iceberg Network and Light Media rising over 1% [1] - The game ETF has seen continuous net inflows for 11 consecutive trading days, accumulating a total of 2.195 billion yuan, indicating strong investor interest [1] - In July, the approval volume of game licenses remained high, with 127 games approved, despite a decrease of 20 from June, maintaining a robust issuance level [1] Group 2 - The gaming sector is undergoing multiple catalysts including AI, content, and commercialization model transformations, with the game ETF tracking the performance of the A-share listed companies in the animation and gaming industry [2] - The annual gaming event ChinaJoy is approaching, presenting potential investment opportunities in the game ETF [2]

Investment Rating - The industry investment rating is "Outperform the Market," indicating a projected increase of over 10% in the industry index relative to the broader market within the next six months [9]. Core Insights - The report highlights that the issuance of game licenses remains high, with 127 domestic games and 7 imported games approved in July 2025. This reflects a robust supply side and a stable trend towards normalization in license issuance [2][7]. - Key titles that received approval include "Kingshot" by Diandian Interactive, which is expected to leverage its success in overseas markets to become a significant product in the domestic SLG (Simulation and Strategy Game) sector [2][3]. - Tencent's "The Finals," a PC-based FPS game, is also noted for its potential to become a dark horse in the FPS market, given its unique gameplay and adaptation for domestic players [3]. - The report emphasizes the strong performance of established IPs like "Diablo IV" and "Marvel's Secret Wars," which are anticipated to perform well in the domestic market due to their established fan bases and innovative gameplay mechanics [4][7]. Summary by Sections Industry Events - In July 2025, the National Press and Publication Administration announced the approval of 127 domestic games and 7 imported games, maintaining a high issuance rate [1][2]. Investment Highlights - The report indicates that 884 domestic games have been approved year-to-date, with July's approvals slightly down from June but still at a high level. Notable titles include "Kingshot," "The Finals," and "Diablo IV" [2][4]. - The report suggests that the gaming industry is on a recovery path, with a consistent release of licenses and a focus on diverse product offerings from leading companies [7]. Company-Specific Insights - Diandian Interactive's "Kingshot" is highlighted for its innovative gameplay that combines tower defense and simulation elements, aiming to cater to domestic players' preferences [2]. - Tencent's adaptation of "The Finals" is expected to enhance player experience through new modes and anti-cheat systems, positioning it well in the competitive FPS market [3]. - "Marvel's Secret Wars" is noted for its unique blend of strategy card and chess elements, leveraging its strong IP to attract players [4][7].