Game Releases - NetEase's "Marvel Secret War" began its Android paid test on September 15, focusing on team-building strategy and character development in a card RPG format, featuring Marvel superheroes like Doctor Strange and Iron Man [1] - ByteDance's "Shadow Hunter" launched its first domestic test on September 16, achieving over 180,000 concurrent players within 90 minutes and climbing to 7th place on Steam's global sales chart [3] - miHoYo's "Honkai: Origin Spirits" started its first closed test on September 17, combining sprite collection with auto-chess combat mechanics [6] - "Dungeon Castle 4: Knights and the Broken Chronicle" was officially released on September 17, continuing the dark dungeon adventure RPG series with 3D graphics and strategic gameplay [8] - Tencent's "The Finals" (translated as "Ultimate Contest") began its second limited test on September 19, developed by members of Embark Studios, featuring a PVP shooting game set in famous global cities [10] Industry News - Tencent's "Delta Force" celebrated its first anniversary on September 21, reporting a daily active user (DAU) count of 30 million, up from 12 million in April and 20 million in July [11] - McDonald's announced a collaboration with "Black Myth: Wukong" on September 19, launching limited-time meal sets and promotional items for the Mid-Autumn Festival [14] - "Love and Producer" revealed a new voice actor for the character Li Zeyan on September 20, following the departure of the previous actor [16] - Zulong Technology was ordered to pay 150,000 yuan for trademark infringement and unfair competition against Suzhou Die Paper Network Technology, due to improper use of registered trademarks in advertising [20] - miHoYo established two new companies in Shanghai, focusing on software development and AI applications, with a registered capital of 10 million yuan each [21]

Core Viewpoint - NetEase's Q2 financial report for 2025 showed growth but fell short of market expectations, indicating challenges in the gaming sector and potential impacts on future performance [2][4]. Financial Performance - NetEase reported Q2 net revenue of 27.9 billion RMB, a year-on-year increase of 9.4%, but below the market estimate of 28.4 billion RMB [2][4]. - The net income from gaming and related value-added services was 22.8 billion RMB, up 13.7% year-on-year [2]. - Other segments showed mixed results: Youdao's revenue was 1.4 billion RMB (up 7.2%), while NetEase Cloud Music's revenue decreased by 3.5% to 2 billion RMB, and innovative and other businesses saw a 17.8% decline to 1.7 billion RMB [2]. - Non-GAAP net profit attributable to shareholders was 9.5 billion RMB, a 21.8% increase, with R&D investment at 4.4 billion RMB, representing an R&D intensity of 15.6% [2]. Market Reaction - Following the earnings report, NetEase's stock price fell by 3.88% as of August 15, reflecting a cautious market response [3]. Gaming Sector Insights - Despite overall revenue growth, the slowdown in game category growth was highlighted as a significant factor affecting performance [4]. - Long-standing games like "Fantasy Westward Journey" and "Identity V" continued to perform well, with "Fantasy Westward Journey" achieving a peak of 2.93 million concurrent users, marking a new milestone in its 22-year operation [6][7]. - The success of these games is attributed to their ability to adapt and innovate, maintaining user engagement despite market challenges [7][8]. New Game Releases and International Expansion - New titles such as "Outsiders" and "Marvel's Secret Wars" have shown strong performance in overseas markets, with "Outsiders" achieving significant download milestones shortly after its release [11][16]. - The management anticipates continued growth in overseas gaming business over the next 2-3 years, with plans to launch more products tailored to international user preferences [16]. Blizzard Games Performance - Blizzard's titles, including "Hearthstone" and "World of Warcraft," have seen increased user engagement and revenue, with "Hearthstone" quickly climbing the iOS sales charts following a new expansion [17]. - The management noted that the current operations of Blizzard's games have surpassed previous levels before service interruptions [17]. Future Outlook - NetEase plans to launch new original titles, including an ocean adventure RPG titled "Forgotten Sea" in 2026, indicating a strategic focus on expanding its game portfolio [18]. - Analysts suggest that the latter half of the year could be crucial for new game launches, despite a competitive landscape in the gaming industry [18].

Financial Performance - Net revenue for the second quarter of 2025 was 27.9 billion yuan, representing a year-on-year increase of 9.4% [1] - Net profit attributable to shareholders was 8.6 billion yuan, down from 10.3 billion yuan in the previous quarter and up from 6.8 billion yuan in the same period last year [1] - Non-GAAP net profit attributable to shareholders was 9.5 billion yuan, compared to 11.2 billion yuan in the previous quarter and 7.8 billion yuan in the same period last year [1] Game Performance and Strategy - The game "Yan Yun Shi Liu Sheng" has shown stable performance, exceeding pre-launch expectations in terms of active users and commercialization [2] - "Seven Days World" experienced a revenue rebound due to a successful 2.0 version update and the introduction of a new PVP mode, ranking fourth on the Steam global sales chart [3] - The user and revenue distribution between China and overseas markets for "Seven Days World" is 1:1 and 1:1.5, respectively [3] Blizzard Games and Market Potential - Blizzard games have performed well, with data surpassing levels from before the last shutdown, indicating strong potential for attracting both new and returning players in China [4] - The company aims to create content that aligns with Chinese players' preferences to tap into the significant potential of Blizzard games [4] Shooting Game Market - The shooting game segment is highly competitive, with high user expectations for art quality and innovative gameplay [4] - The company plans to continue investing in shooting games to establish leading products in this space [4] Long-term Game Development - "Marvel Showdown" has seen revenue and daily active users stabilize after the launch of its third season, indicating effective new strategies [5] - "Forgotten Sea" is viewed as a potential top game, with a focus on its commercial model and target market [5] Evergreen Games Recovery - "Dream Journey" has shown recovery in performance, with a peak of 2.93 million concurrent users recorded [6] - "Egg Party" is expected to become a popular family game through continued investment in high-quality content and marketing [7] AI Integration and Overseas Expansion - The company is actively investing in AI to enhance game development and operations, with plans for AI-driven games in the near future [8] - The overseas market is seen as attractive, with successful titles like "Marvel Showdown" and "Seven Days World" achieving good results [9]

Financial Performance - Q2 revenue was 27.9 billion RMB, a year-on-year increase of 9.4%, but below the expected 28.4 billion RMB [1] - Gross profit was 18.1 billion RMB, a year-on-year increase of 12.5%, with a gross margin of 64.9% [1][9] - Net profit reached 8.6 billion RMB, a year-on-year increase of 27.25%, but a significant quarter-on-quarter decline of 16.5% [1][10] - The company announced a dividend of 0.57 USD per ADS and has executed a share repurchase plan of 2 billion USD [1] Core Business - Online gaming revenue was 22.8 billion RMB, a year-on-year increase of 13.7%, but a quarter-on-quarter decline of 5%, falling short of the market expectation of 23.37 billion RMB [2] - The gaming business's gross profit was 16.01 billion RMB, slightly exceeding expectations, indicating ongoing cost control pressures [3] - The game "Dream of Jianghu" reached a peak of 2.93 million concurrent players in August, showcasing the enduring appeal of this 20-year-old IP [4] Non-Gaming Business - Net revenue from NetEase Cloud Music was 2 billion RMB, a slight year-on-year decline of 3.5%, with a quarter-on-quarter increase of 5.3% [6] - Youdao's performance was relatively stable, with net revenue of 1.4 billion RMB, a year-on-year increase of 7.2% [7] - Revenue from innovative and other businesses was 1.7 billion RMB, a significant year-on-year decline of 17.8%, primarily due to decreased income from NetEase Yanxuan and advertising services [8] Profitability and Cash Position - The company maintained a strong cash position with net cash of 142.1 billion RMB, an 8.1% increase from the beginning of the year [10] - Operating cash flow was 10.9 billion RMB, although it declined by 10% quarter-on-quarter, still indicating a healthy level [10] Future Outlook - The CEO emphasized the importance of exploring new player experiences and expanding self-developed IP products, with upcoming titles like "Sea of Oblivion" and "Return to Tang" being critical for assessing innovation and international strategy [11] - The continued expansion of Blizzard games in the Chinese market, including new content for "Hearthstone" and the 20th anniversary of "World of Warcraft," may provide new growth opportunities for the company [11]

Financial Performance - Net revenue for Q2 2025 reached 27.9 billion yuan, representing a year-on-year growth of 9.4% [1] - Net profit attributable to shareholders under non-GAAP was 9.5 billion yuan, showing a year-on-year increase of 21.8% [1] Gaming Segment - The gaming sector remains the core business for the company, with net revenue from games and related value-added services amounting to 22.8 billion yuan in Q2 [1] - The game "Yan Yun Shi Liu Sheng" has seen sustained popularity, with over 40 million cumulative users by the end of July [1] - The classic IP "Dream of the Red Chamber" achieved a new high in simultaneous online users, while mobile game revenue also reached a new record [1] Other Business Segments - NetEase Youdao reported Q2 net revenue of 1.4 billion yuan, achieving sustainable profitability for the fourth consecutive quarter under its "AI-native" strategy [1] - NetEase Cloud Music's Q2 net revenue was 2 billion yuan, remaining stable year-on-year [1] - Net revenue from NetEase Yanxuan increased quarter-on-quarter, contributing 1.7 billion yuan in Q2 [1] North American Market Expansion - Several new games from NetEase have successfully penetrated the North American market, with "Out of Bounds" ranking second on the PlayStation May free download chart in North America [2] - "All-Star Streetball Party" and "Marvel's Secret War" topped the iOS download charts in multiple regions after their overseas releases, both entering the top 2 in the US download rankings [2] - "Seven Days World" 2.0 version reached fourth place on the Steam global bestseller list, while "Marvel Showdown" secured first and second places on the Steam US and global bestseller lists, respectively [2]

Core Viewpoint - NetEase (NTES.US) is expected to report improved performance in its upcoming earnings release, with projected revenue and adjusted EBIT growth of 12% and 29% year-over-year, respectively, reaching 28.5 billion and 10.4 billion RMB [1] Group 1: Financial Performance - The anticipated game revenue for NetEase is expected to increase by 17.9% year-over-year [1] - The company's total revenue is projected to be 28.5 billion RMB, while adjusted EBIT is expected to be 10.4 billion RMB [1] Group 2: Game Performance - Key games contributing to revenue include "逆水寒" (Nirvana in Fire) and "蛋仔派对" (Egg Party), which are performing steadily, while "巅峰极速" (Peak Speed) is recovering growth [1] - New games such as "第五人格" (Identity V) and upcoming titles are expected to maintain strong performance [1] Group 3: Future Product Line - NetEase's product line for the second half of the year includes RPG game "漫威秘法狂潮" (Marvel's Secret Magic), ARPG "暗黑II重置版" (Diablo II Resurrected), and FPS game "无主星渊" (Borderlands) [1] - Approximately 21 new games have recently passed regulatory approval, which is believed to further drive company growth [1]

Core Viewpoint - The report from Credit Lyonnais indicates that NetEase's Q2 performance is expected to improve, with total revenue and adjusted EBIT projected to increase by 12% and 29% year-on-year, reaching RMB 28.5 billion and RMB 10.4 billion respectively [1] Revenue and Earnings - Total revenue is forecasted to rise by 12% year-on-year to RMB 28.5 billion [1] - Adjusted EBIT is expected to increase by 29% year-on-year to RMB 10.4 billion [1] Gaming Performance - The gaming revenue for the period is estimated to grow by 17.9% year-on-year [1] - Key games such as "Naraka: Bladepoint" and "Party Animals" have shown stable performance, while "Peak Speed" has resumed growth [1] - "Identity V" and new game titles are performing steadily [1] Future Product Line - The product lineup for the second half of the year includes RPG game "Marvel: Secret Wars," ARPG game "Diablo II: Resurrected," and FPS game "Voidstar" [1] - Approximately 21 new games have recently passed regulatory approval, which is expected to further drive company growth [1]

Core Viewpoint - The report from Credit Lyonnais indicates that NetEase (NTES.US) is expected to see improved performance in Q2, with total revenue and adjusted EBIT projected to increase by 12% and 29% year-on-year, reaching RMB 28.5 billion and RMB 10.4 billion respectively [1] Revenue and Earnings - Total revenue is forecasted to rise by 12% year-on-year to RMB 28.5 billion [1] - Adjusted EBIT is expected to increase by 29% year-on-year to RMB 10.4 billion [1] Gaming Performance - The gaming revenue is estimated to grow by 17.9% year-on-year during the period [1] - Key games such as "Nirvana in Fire" and "Egg Party" have shown stable performance, while "Peak Speed" has resumed growth [1] - "Identity V" and new games are performing steadily [1] Future Product Line - The product lineup for the second half of the year includes RPG game "Marvel Secret Wars," ARPG game "Diablo II Resurrected," and FPS game "No Man's Sky" [1] - Approximately 21 games have recently passed regulatory approval, which is expected to further drive company growth [1]

Core Viewpoint - The report from Credit Lyonnais indicates that NetEase's performance is expected to improve in the second quarter, with total revenue and adjusted EBIT projected to increase by 12% and 29% year-on-year, reaching 28.5 billion and 10.4 billion respectively [1] Revenue and Earnings - Total revenue is forecasted to rise to 28.5 billion, while adjusted EBIT is expected to reach 10.4 billion [1] - Game revenue is estimated to grow by 17.9% year-on-year during the period [1] Game Performance - The decline in mobile game revenue has slowed to 2.9% year-on-year, attributed to stable performances from titles such as "Nirvana in Fire" and "Party of Egg," as well as recovery in "Peak Speed" and steady performance from "Identity V" and new games [1] Upcoming Titles - NetEase's product lineup for the second half of the year includes RPG game "Marvel Secret Law," ARPG game "Diablo II Resurrected," and FPS game "No Man's Sky" [1] - Approximately 21 games have recently passed regulatory approval, which is expected to further drive the company's growth [1] Analyst Rating - Credit Lyonnais maintains a "Outperform" rating for NetEase with a target price of $140 [1]

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]