Investment Rating - The report maintains a "Recommendation" rating for the media industry, expecting the industry index to outperform the benchmark index by over 5% in the next 3-6 months [2][40]. Core Views - The media sector is anticipated to experience a rebound, particularly in gaming and AI applications, with significant growth potential in these areas. The report emphasizes the importance of both sharpness and allocation in the current market environment [3][6]. - The gaming market is highlighted as entering a favorable valuation zone, with specific companies like Giant Network and Century Huatong recommended for investment [6][16]. - The film market is recovering, with the total box office reaching approximately 437.06 billion yuan, which is about 78% of the 2019 level, indicating a strong recovery trajectory [19][20]. Market Performance Review - The media sector index fell by 3.86% last week, underperforming the CSI 300 index, which rose by 1.28%, resulting in a relative underperformance of 5.14% [9][10]. - The total market capitalization of the media sector is approximately 19,595.28 billion yuan, with a circulating market value of 17,850.96 billion yuan [3]. Gaming Market Insights - Tencent's products dominate the iOS gaming market, with titles like "Peace Elite" and "Love and Deep Space" performing strongly [16]. - Upcoming game releases include "Rust" and "PUBG: BLACK BUDGET," which are expected to generate significant interest [18]. Film Market Overview - The film "Zootopia 2" has achieved a box office of nearly 23 billion yuan within six days, with projections suggesting it could help the total annual box office exceed 500 billion yuan [27]. - The total box office for the year has reached 437.06 billion yuan, with a recovery rate of approximately 78% compared to 2019 [19][22]. Important News and Company Announcements - The establishment of the first micro-short drama export base in Shanghai marks a significant development in the media industry [27]. - Tencent's Magic Cube Studio celebrated its 15th anniversary, announcing major updates for several IP titles, indicating ongoing innovation in the gaming sector [28].

Investment Rating - The industry rating is "Recommended" [4] Core Insights & Investment Recommendations - Unity and Epic Games announced a strategic partnership to create an open and interoperable ecosystem for game engines, allowing developers to publish Unity games on the Fortnite platform with over 500 million registered accounts, enhancing user reach and commercialization efficiency [2][21] - NVIDIA's quarterly performance exceeded expectations, with data center revenue growing by 289% year-on-year, reflecting strong demand for AI infrastructure [3][22] - The report suggests focusing on investment opportunities in leading internet companies in Hong Kong, the gaming industry, and the film and cultural tourism sectors, driven by consumption policies and technological empowerment [3][22] Sub-industry Data Film Industry - The top three films by box office this week are "Demon Slayer: Infinity Castle" with 134.67 million yuan (42.9% market share), "Wild Era" with 75.67 million yuan (24.1%), and "Now You See Me 3" with 55.44 million yuan (17.7%) [23][24] Gaming Industry - The top three iOS games by revenue are "Teamfight Tactics," "Dungeon & Fighter: Origin," and "Honor of Kings," while the top three Android games are "Heart Town," "Sword and Magic Legend," and "My Leisure Time" [25] TV Series Industry - The top three TV series by broadcasting index are "Tang Dynasty Ghost Stories: Chang'an," "Four Happiness," and "Phoenix Platform," with indices of 85.5, 82.4, and 81.8 respectively [26][27] Variety Shows & Animation - The top variety show is "Now Departing Season 3" with a broadcasting index of 82.4, followed by "Wonderful Night Season 2" and "Flowers and Youth Together" [28][29] - The top three animated shows by viewership index are "Xian Ni" with 212.8, "Happy Hammer" with 191.6, and "Swallowing the Starry Sky" with 187.2 [30]

Core Viewpoint - The introduction of Apple's "Mini Apps Partner Program" with a 15% commission rate for eligible mini-program transactions marks a significant shift in the ongoing power struggle between game developers and distribution platforms, particularly between Apple and Tencent [1][2]. Group 1: Impact on Game Developers - The new 15% commission rate is perceived as a benefit for game developers who have been under pressure from higher commission rates, but it comes with conditions that require deep integration with Apple's technology [1][2]. - Developers must use Apple's tools for app development, manage user data through Apple's system, and process payments exclusively through Apple's channels, which limits their control over user data and payment options [2][4]. - Companies like Century Huatong view the policy's negative impact as minimal, estimating it to be below 0.5%, while anticipating an increase in iOS mini-program users due to improved payment convenience [2][4]. Group 2: Reactions from Major Players - Tencent welcomes the new program as a balanced solution that supports the stability of the WeChat ecosystem while avoiding potential conflicts from external payment loopholes [3]. - Companies primarily focused on app-based games, such as a Shanghai-based game developer, report limited impact from the policy, as their core products rely on app operations rather than mini-programs [4]. Group 3: Industry Trends and Changes - The agreement between Apple and Tencent reflects a broader trend of game developers pushing back against traditional distribution channels, as seen in recent withdrawals from major Android platforms [4][5]. - The rise of alternative distribution channels, such as social media and live streaming platforms, is reshaping the flow of traffic and revenue in the gaming industry, challenging the dominance of traditional app stores [5][6]. - Analysts suggest that the reduction in commission rates indicates Apple's optimism about the future of mini-games, as the market for mini-program games has seen significant growth, with a reported 40.2% increase in revenue year-on-year [6][7]. Group 4: Future Implications - The ongoing evolution in the gaming industry emphasizes the importance of high-quality content creation and diversified channel operations as key factors for success [7].

Core Viewpoint - The recent trend of multiple NetEase games ceasing operations on OPPO's platform reflects a broader shift in the gaming industry, driven by high channel fees and changing market dynamics [2][3][4]. Group 1: Game Cessation on OPPO - Several NetEase games, including "逆水寒" (Nirvana in Fire), have stopped operations on OPPO's platform due to "operational strategy adjustments" by NetEase [2][3]. - This trend is not new; multiple titles have previously announced their exit from OPPO, including "阴阳师：妖怪屋" (Onmyoji: Yokai House) and "梦幻西游" (Fantasy Westward Journey) [3][4]. - Analysts suggest that more prominent titles from NetEase may also follow suit, indicating a significant shift in the gaming landscape [3][4]. Group 2: Industry Dynamics - The gaming industry is witnessing a decline in the relevance of Android channels, with companies increasingly opting to withdraw from these platforms due to high revenue-sharing demands [4][5]. - The "hardcore alliance" formed by major players like Tencent has also contributed to this shift, as it established a 50/50 revenue-sharing model that is now being challenged [4][5]. - The contribution of channels to user acquisition is diminishing, while the revenue-sharing ratios remain high, leading to increased tension between game developers and platform providers [5][6]. Group 3: Strategic Shifts - Companies like NetEase and Tencent are confident in their games' appeal, believing that withdrawing from channel servers will not significantly impact user retention and may even enhance user migration to official servers [6]. - The industry is moving towards a model where high-quality games attract users directly, reducing reliance on traditional channel distribution methods [5][6].

Core Viewpoint - The era of channel-based revenue collection is coming to an end, as major game developers like NetEase are increasingly withdrawing their games from OPPO's channel services due to operational strategy adjustments and high revenue-sharing costs [1][4][5]. Group 1: Game Industry Trends - Multiple NetEase games have announced the cessation of their OPPO channel services, including popular titles like "Onmyoji: Yokai House" and "Reverse Water Cold," indicating a broader trend in the gaming industry [1][3]. - Analysts suggest that the withdrawal from channel services is driven by the rising costs associated with Android channels, which have become unsustainable for game developers [3][4]. - The gaming industry is witnessing a shift where developers are moving away from reliance on app store channels for user acquisition, as the contribution of these channels to new user growth diminishes while revenue-sharing ratios remain high [4][5]. Group 2: Developer Strategies - Game developers, including NetEase and Tencent, are confident in their games' appeal and are willing to withdraw from channel services, believing it will not significantly impact user retention [5]. - The trend of high-quality games attracting users through direct downloads rather than through channels is becoming more prevalent, allowing developers to bypass traditional revenue-sharing models [5]. - The "hardcore alliance" formed by major companies like Tencent has led to significant changes in how games are distributed on Android platforms, with developers seeking more favorable terms [4].

Core Insights - In Q3 2025, China's gaming market achieved actual sales revenue of 880.26 billion yuan, marking a quarter-on-quarter growth of 6.96% but a year-on-year decline of 4.08%, ending a continuous decline since Q4 2024 [1][2] Market Segmentation - The client game market in China generated actual sales revenue of 202.9 billion yuan, with a quarter-on-quarter increase of 16.05% and a year-on-year increase of 19.88%, driven by multiple product launches during the summer and the performance of cross-platform products [2] - The web game market saw actual sales revenue of 10.75 billion yuan, experiencing a quarter-on-quarter decline of 1.41%, attributed to a strategic shift by game companies towards mobile and client games [2] - The mobile game market reported actual sales revenue of 643.89 billion yuan, with a quarter-on-quarter growth of 4.39% but a year-on-year decline of 1.93%, primarily due to a high base from the previous year and reduced revenue from leading products [2] - China's self-developed games in overseas markets achieved actual sales revenue of 49.94 billion USD, with a quarter-on-quarter growth of 6.34% but a year-on-year decline of 3.39%, supported by key products like "Kingshot" and "Last Z: Survival Shooter" [3]

Investment Rating - The report maintains an "Outperform" rating for the media sector [1] Core Viewpoints - The media sector has shown significant performance with favorable policies and AI-driven growth, particularly in the gaming segment [1][4] - The gaming sector is experiencing robust growth, with a year-on-year revenue increase of nearly 24% and net profit growth of approximately 75% [4][13] - The report highlights a divergence in performance among sub-sectors, with gaming showing strong growth while publishing and film sectors face challenges [4][12] Summary by Sections Investment Recommendations - The media sector's H1 2025 report indicates record-high revenue and significant profit growth, with a positive outlook on gaming, publishing, and IP derivative products [4][12] - The gaming sector benefits from favorable policies and AI advancements, leading to improved valuations and sustained performance [4][13] Market Review - From August 18 to September 26, 2025, the media sector rose by 11.76%, underperforming the ChiNext index by 12.60 percentage points but outperforming the CSI 300 and Shanghai Composite indices [3][16] - Among sub-sectors, the gaming sector increased by 28.36%, while the publishing sector declined by 2.19% [3][16] Industry News - Recent government policies, such as the "Artificial Intelligence +" initiative, are expected to enhance the media sector's growth prospects [25] - The gaming industry saw the approval of 145 domestic game licenses in September 2025, indicating a healthy regulatory environment [50] Monthly Data - In August 2025, the domestic film market generated a box office of 5.991 billion yuan, a year-on-year increase of 48.59% [26][27] - The gaming market's actual sales revenue in August 2025 was 29.263 billion yuan, with a year-on-year decline of 13.01% [44]

Core Points - The collaboration between Domino's Pizza and the popular mobile game "Dungeon & Fighter: Origin" features a special "Volcano Raid" meal package, combining culinary creativity with gaming elements [1][3][5] - The promotional period for this collaboration runs from September 25, 2025, to December 24, 2025, with limited-time offers available at designated stores [1][10] - The meal package includes a choice of cheese or cocoa "volcano" pizza, with a maximum discount of 42 yuan, and comes with exclusive in-game items and merchandise [1][5][10] Company Overview - Domino's Pizza, established in 1960, operates over 21,000 restaurants in more than 90 countries as of Q2 2025, with over 1,200 stores in mainland China [9] - The company emphasizes quality ingredients, including imported cheese and a variety of meats and vegetables, ensuring a high standard of pizza production [9] - Domino's Pizza offers a delivery guarantee of 30 minutes, enhancing customer service and satisfaction [9][10] Industry Context - "Dungeon & Fighter" is a well-known RPG fighting game that has maintained popularity for over a decade, with its mobile version "Dungeon & Fighter: Origin" being well-received in China [3][5] - The collaboration represents a growing trend of cross-industry partnerships, merging food and gaming to enhance customer engagement and brand loyalty [1][3]

Core Viewpoint - The gaming industry in China has experienced a significant rebound in performance and stock prices, driven by multiple favorable factors including the continuous issuance of game licenses, strong product performance, and successful expansion into overseas markets [1][5][6]. Industry Performance - The A-share gaming sector has seen a remarkable increase, with the Shenyin Wanguo gaming industry index surpassing 4000 points, marking a new high since 2017. The index has risen nearly 80% year-to-date, ranking third among secondary industry indices [5][6]. - From 2017 to 2024, China's gaming market revenue has grown from 203.6 billion to 325.8 billion yuan, with a notable turnaround beginning in the second half of last year [4][5]. Company Highlights - Several gaming companies have reported impressive stock price increases, with ST Huatuo and Giant Network both exceeding 200% growth this year. ST Huatuo's market capitalization has surpassed 140 billion yuan, making it the highest in the A-share media sector [5][6]. - Specific companies like ST Huatuo and Giant Network have seen substantial revenue growth, with ST Huatuo's revenue increasing by 70.3% in 2024 and continuing to rise by 85.5% in the first half of this year [7][8]. Factors Driving Growth - The resurgence in the gaming sector is attributed to several factors: overall industry performance recovery, cost reduction and efficiency gains from AI technology, disclosure of high-revenue products, and the explosion of mini-game ecosystems [6][7]. - The number of game licenses issued has significantly increased, with 1,119 licenses granted by August this year, reflecting a strong policy support for the industry [6][8]. Future Outlook - The gaming industry is expected to maintain its growth momentum due to the deep accumulation of resources by domestic gaming companies, which have developed a robust pipeline of new products [8][9]. - Analysts predict that the current prosperous situation may continue for the next 1 to 2 years, although the growth model and market dynamics may evolve, focusing more on quality and long-term operational capabilities rather than sheer quantity [9].

Core Viewpoint - The gaming industry in China has shown unexpected strong performance this year, with significant increases in both product performance and stock prices, driven by factors such as continuous issuance of game licenses, successful new game launches, and effective overseas market expansion [1][2]. Group 1: Market Performance - The A-share gaming sector has seen a remarkable recovery, with the Shenwan gaming industry index surpassing 4000 points, marking a new high since 2017. As of September 19, the index has increased nearly 80% this year, ranking third among Shenwan's secondary industry indices [2]. - Individual stocks have performed exceptionally well, with companies like ST Huatuo, Giant Network, and G-bits seeing stock price increases exceeding 100%, and ST Huatuo and Giant Network surpassing 200% [2][3]. - The domestic gaming market's actual sales revenue is projected to grow from 203.6 billion yuan in 2017 to 325.8 billion yuan in 2024, indicating a significant upward trend after years of stagnation [2]. Group 2: Factors Driving Growth - The continuous issuance of game licenses has been a crucial factor in revitalizing the industry, with 1,119 game licenses granted by August this year, a notable increase compared to previous years [2][3]. - The domestic gaming market's actual sales revenue reached 168 billion yuan in the first half of the year, a year-on-year increase of 14.08%, with the user base growing to 679 million, both figures hitting historical highs [3][4]. - The overseas market performance has also been strong, with actual sales revenue from self-developed games reaching $9.5 billion (approximately 68 billion yuan) in the first half of the year, marking an 11% year-on-year increase [3][4]. Group 3: Product and Technological Advancements - The successful launch of high-revenue games has bolstered investor confidence, particularly in validating the commercial models of mobile games and the potential for growth in mini-games [4][5]. - Companies are focusing on high-quality content production and expanding their market reach, moving away from low-quality, imitation games to more innovative offerings [5][6]. - The integration of AI technology is expected to enhance the ability of gaming companies to produce high-quality content efficiently, requiring strong market insight and operational capabilities [8]. Group 4: Future Outlook - The gaming industry is anticipated to maintain its growth momentum for the next 1-2 years, driven by the continuous production of new products and the deep accumulation of resources by domestic gaming companies [6][7]. - Major players like Tencent are diversifying their portfolios by launching both established and new titles, contributing to overall revenue growth in the domestic gaming market [7]. - The focus is shifting towards the quality and longevity of game releases, with an emphasis on achieving higher success rates rather than merely increasing the quantity of new games [7][8].