Core Viewpoint - Tencent has completed a strategic investment of €11.6 billion (approximately ¥90 billion) in Ubisoft, marking a significant partnership aimed at revitalizing Ubisoft's financial health and expanding its core IPs [2][4][6]. Group 1: Investment Details - Tencent's investment will grant it approximately 26% ownership of the newly established subsidiary, Vantage Studios, which is valued at €3.8 billion [4]. - Ubisoft retains exclusive control over Vantage Studios, with a five-year lock-up period for Tencent's shares unless Ubisoft loses control [4]. - The new subsidiary will focus on accelerating the revenue growth of key franchises such as Assassin's Creed, Far Cry, and Rainbow Six, targeting an annual revenue of €1 billion for these brands [3][4]. Group 2: Financial Performance - Ubisoft reported a 20.3% year-on-year increase in total net bookings for the first half of the 2025-2026 fiscal year, reaching approximately €770 million, driven by strong performance from Assassin's Creed and Tom Clancy's The Division [5]. - Despite the revenue growth, Ubisoft faced a net loss of approximately €161.3 million during the reporting period [5]. Group 3: Historical Context - Ubisoft has faced challenges in recent years, with several anticipated titles underperforming and a significant decline in stock price, prompting discussions about potential privatization and the search for new investors [8][9]. - Tencent's involvement as a "white knight" comes after previous attempts by Vivendi to acquire Ubisoft, which were met with resistance from the Guillemot family [7][8]. Group 4: Industry Implications - Tencent's investment reflects its ongoing strategy to expand its international gaming portfolio, having previously made significant acquisitions in the gaming sector [9][10]. - The investment also highlights the growing trend of Chinese gaming IPs gaining global traction, contrasting with the struggles of established Western companies like Ubisoft [10].

Core Insights - Tencent's total revenue and adjusted net profit for Q3 increased by 15% and 18% year-on-year, reaching 192.9 billion and 70.6 billion respectively, exceeding expectations by 1.5% and 4.5% [1] Group 1: Financial Performance - The standout performance came from online gaming, which grew by 23% year-on-year, driven by the success of new titles such as "Delta Operation" and "Valorant Mobile," along with growth from established games like "Honor of Kings," "Peacekeeper Elite," and "Clash of Clans" [1] - Marketing services accelerated to a year-on-year growth of 21%, primarily due to increased user engagement, ad load volume, and AI targeting technology [1] - The fintech and enterprise services segment rebounded, supported by cloud services and e-commerce transactions [1] Group 2: Future Outlook - The company is expected to maintain steady revenue growth due to its rich game portfolio, more AI advertising tools, and growth in small shop businesses [1] - Tencent anticipates significant upgrades to its next-generation mixed Yuan model and plans to continuously enhance AI features and virtual currency services within WeChat [1] - The firm maintains a "highly confident outperform" rating with a target price of 740 HKD [1]

Core Insights - The development of "Squad Busters" will end, with the final update scheduled for December 2025, as the game did not meet Supercell's long-term quality standards despite initial success [2][4][5] - Supercell acknowledges the lessons learned from the failure of "Squad Busters" and emphasizes the importance of creating games that players can enjoy for years [3][5][16] - The decision to cease development was made after months of reflection, as the game failed to maintain its player base and did not evolve into a global phenomenon [3][10][23] Summary by Sections Game Launch and Initial Reception - "Squad Busters" launched in May 2024 and initially attracted millions of players, leading to optimism about its potential success [1][9] - The game received positive feedback at launch, which led Supercell to believe it could become a major hit alongside their other successful titles [2][9] Development Challenges - Despite efforts to address core issues, including the introduction of a new "Heroes" system, the game could not find a lasting solution to its problems [3][10] - By early 2025, Supercell faced a critical decision point regarding the game's future, ultimately opting for a bold creative change that did not yield the desired results [3][10] Conclusion of Development - The decision to end active development was described as extremely difficult, with a final update planned for December 2025, after which the game will remain available for a limited time before being closed in 2026 [4][5][20] - Supercell aims to redirect the talented team behind "Squad Busters" to new projects and existing successful games to enhance player experiences [6][11] Player Transition and Rewards - In-app purchases were disabled on October 30, 2025, and players can transfer their purchases to other Supercell games starting November 10, 2025 [6][12] - As a gesture of appreciation, players will receive free bundles in other Supercell games based on their playtime in "Squad Busters" [7][14] Industry Context - The announcement of "Squad Busters" ending its operations marks a significant moment for Supercell, which has historically maintained a 100% success rate for new game launches prior to this title [22][23] - Despite the setback, Supercell continues to see success with its established titles, indicating resilience in its long-term game development strategy [29][30]

Core Insights - The article discusses how mobile game developers are increasingly directing players to external payment options to avoid Apple's 30% commission, referred to as the "Apple tax" [1][3][12] - A study by Liquid & Grit analyzed over 30 cases of leading mobile game companies like Supercell and Niantic, focusing on their strategies to sell in-app purchases (IAP) directly to players outside of the App Store [1][3] Group 1: Strategies for Redirecting Players - Liquid & Grit categorized the new store designs into four main types: offering web store discounts in the native IAP store, pop-ups, buttons on the main game interface, and using in-game news and email systems for guidance [1][3] - "Social Casino" games are the most proactive in redirecting players to web stores, utilizing all four methods, while other game categories show varied adoption [3][5] - Specific games like "Dragon City" and "PUBG Mobile" employ different strategies, such as banners and pop-ups, to encourage players to use web stores for purchases [5][7] Group 2: Incentives and Challenges - To enhance conversion rates, developers must reduce payment friction and increase player motivation to choose external payment options over Apple’s [11][12] - Companies like Epic Games offer incentives, such as a 20% cash back, to encourage players to opt for web payments [11] - The report suggests that the most effective design so far is the "purchase pop-up," which allows players to complete transactions without leaving the game, thus maintaining a seamless experience [11][12] Group 3: Alternative Payment Solutions - Companies with in-house resources are encouraged to build their own web stores and utilize payment processors like Stripe or Adyen to handle transactions [12] - For developers who prefer not to create their own stores, managed web store service providers like Xsolla and Stash are available, offering a quicker setup at a cost lower than Apple's commission [12]

Core Insights - Tencent reported a revenue of 184.5 billion yuan for Q2 2025, representing a year-on-year growth of 14.5% driven primarily by advertising and gaming sectors [1] - Adjusted operating profit for Q2 2025 was 69.2 billion yuan, up 18% year-on-year, while non-IFRS net profit reached 63 billion yuan, reflecting a 10% increase [1] - The company’s comprehensive gross margin improved to 57%, a 4 percentage point increase year-on-year, with notable improvements in gross margins across value-added services, online advertising, and fintech services [1] Revenue Breakdown - Online gaming revenue for Q2 2025 was 59.2 billion yuan, showing a robust year-on-year increase of 22%, with domestic gaming revenue rising 17% to 40.4 billion yuan [2] - International gaming revenue surged by 35% to 18.8 billion yuan, driven by strong performances from titles like VALORANT and PUBG MOBILE [2] - The deferred revenue at the end of Q2 2025 stood at 120.9 billion yuan, marking a 13% year-on-year increase [2] Advertising and Fintech Performance - The company’s online advertising revenue reached 35.8 billion yuan in Q2 2025, reflecting a 20% year-on-year growth, attributed to higher click-through rates from AI deployment [3] - Fintech and enterprise services revenue grew by 10% year-on-year to 55.5 billion yuan, with commercial payment services and consumer credit driving growth [3] - Cloud service revenue is estimated to have increased by 17% in Q2 2025, benefiting from AI-related service demands [3] Future Outlook - The company is well-positioned for future growth, particularly in areas like WeChat e-commerce and AI applications, which are not fully reflected in current profit forecasts [4] - Projected adjusted net profits for 2025, 2026, and 2027 are 258.7 billion yuan, 296 billion yuan, and 335.2 billion yuan respectively, with slight upward adjustments [4] - Tencent's ecosystem continues to leverage its user and scenario advantages, positioning it as a leading player in the AI era [4]

Investment Rating - The investment rating for Tencent Holdings is "Outperform the Market" [4][34]. Core Insights - Tencent's revenue grew by 15% year-on-year, with adjusted profit increasing by 10%. In Q2 2025, Tencent achieved revenue of 184.5 billion yuan, a year-on-year increase of 14.5%, primarily driven by advertising and gaming businesses. The adjusted operating profit for Q2 2025 was 69.2 billion yuan, up 18% year-on-year [1][10]. - The company is optimistic about the integration of AI applications within its ecosystem, enhancing user experience and driving growth in social e-commerce [2][19]. - The gaming segment saw a 22% year-on-year increase in revenue, with domestic game revenue rising by 17% to 40.4 billion yuan, supported by strong contributions from self-developed games [3][22][26]. - Advertising revenue reached 35.8 billion yuan, reflecting a 20% year-on-year growth, attributed to higher click-through rates from AI deployment and improved transaction activities [4][31]. - Financial technology and enterprise services returned to double-digit growth, with revenue increasing by 10% to 55.5 billion yuan, driven by commercial payment services and consumer credit services [4][32]. Summary by Sections Financial Performance - In Q2 2025, Tencent's total revenue was 184.5 billion yuan, a 14.5% increase year-on-year, with adjusted operating profit at 69.2 billion yuan, up 18% year-on-year. The non-IFRS net profit was 63 billion yuan, reflecting a 10% increase [1][10][11]. - The overall gross margin improved to 57%, up 4 percentage points year-on-year, with specific segments like value-added services and financial technology showing significant margin improvements [11][34]. Gaming Business - The gaming revenue for Q2 2025 was 59.2 billion yuan, a 22% increase year-on-year. Domestic market revenue rose by 17% to 40.4 billion yuan, driven by popular titles like "Delta Action" and "Honor of Kings" [3][22][26]. - International gaming revenue grew by 35% to 18.8 billion yuan, with strong performances from titles like "VALORANT" and "PUBG MOBILE" [3][22][27]. Advertising and Marketing Services - The advertising revenue for Q2 2025 was 35.8 billion yuan, a 20% increase year-on-year, primarily due to enhanced click rates from AI and improved transaction activities through WeChat [4][31]. - The company noted that the current loading rate for video accounts is relatively low, indicating potential for future growth in advertising monetization [31]. Financial Technology and Enterprise Services - Financial technology and enterprise services revenue grew by 10% to 55.5 billion yuan, with a notable recovery in growth rates. The cloud service revenue is estimated to have increased by 17% in Q2 2025 [4][32][34].

Group 1 - ChinaJoy has evolved from a gaming-centric event to a multi-faceted entertainment platform, attracting various industries to engage with young audiences [1][2][5] - The event features 743 participating companies, including 237 foreign firms from 37 countries, highlighting the global interest in the Chinese digital entertainment market [5] - The gaming industry in China is experiencing a resurgence, with a projected actual sales revenue of 168 billion yuan for the first half of 2025, marking a 14.08% year-on-year increase [5] Group 2 - The presence of hardware manufacturers is increasing at ChinaJoy, with companies like BYD showcasing themed vehicles, indicating a shift towards a more diverse exhibition [6][12] - The integration of AI and smart technologies is becoming prominent, with various companies showcasing their innovations, reflecting a trend towards artificial intelligence in the entertainment sector [7][12] - The event serves as a platform for both domestic companies to expand internationally and for foreign firms to enter the Chinese market, demonstrating a "two-way" globalization trend in the gaming industry [12] Group 3 - Major gaming companies like NetEase and Tencent are showcasing a variety of interactive experiences, with Tencent presenting 17 game products, indicating a focus on immersive storytelling and user engagement [13][14] - The collaboration between classic IPs and new game releases is evident, with innovative crossovers attracting significant player interest, showcasing the industry's creative potential [14][17] - ChinaJoy is positioned as a barometer for industry trends, reflecting the ongoing transformation of the gaming landscape as it adapts to new technologies and consumer preferences [17]

Group 1 - The 22nd China International Digital Interactive Entertainment Expo (ChinaJoy) officially opened on August 1 in Shanghai, with Tencent Games showcasing 17 products, occupying nearly half of the N4 hall [1] - Tencent Games' theme for this year's event is "COOL Goose Summer Camp," which aims to enhance product experience and booth services, featuring over ten gameplay categories and popular new releases such as "Runeterra: League of Legends Card Battle" and "Dance Dance Revolution: Party" [1] - The event includes immersive trial experiences and interactive activities like esports competitions and challenge games, providing a comprehensive exhibition service for attendees [1] Group 2 - The "COOL Goose Summer Camp" consists of a central square, a comprehensive exhibition area, and three independent exhibition zones, highlighted by a 40-meter "Goose MAX" screen that connects various experiences [2] - Attendees can engage in "cyber interaction" by projecting hand-drawn images and real-time comments onto the "Goose MAX" screen, with live leaderboards for competitive events displayed [2] - The central square features a green camp design with multiple interactive areas, allowing players to participate in fun activities and earn rewards, such as reciting a poem to use a loudspeaker or generating AI-customized memorabilia [2] Group 3 - The central square is flanked by a comprehensive exhibition area and three independent booths, showcasing 17 game products with diverse interactive experiences [3] - The comprehensive exhibition area features 11 products, including popular titles like "Honor of Kings" and games from Supercell, covering various genres such as strategy and simulation [3] - Independent booths include major titles from the Dungeon Fighter IP and new releases like "Valorant" and "Runeterra," offering extensive trial activities and a unique exhibition experience for players [3]

Group 1 - The 22nd ChinaJoy was held from August 1 to 4 at the Shanghai New International Expo Center, with Tencent Games showcasing 17 products, occupying nearly half of the N4 hall [1] - Tencent Games' theme for this year's event was "COOL Goose Summer Camp," focusing on enhancing product experience and booth services, featuring over ten gameplay categories and popular new titles like "Runeterra: League of Legends Card Battle" and "Dance Party: Party" [1][2] - Interactive activities such as esports events and challenge games were added to various product booths, providing an immersive experience for attendees [1] Group 2 - Tencent's popular MOBA game "Honor of Kings" and Supercell's well-known titles like "Clash of Clans" and "Clash Royale" were featured, covering strategy, light competition, and simulation genres [3] - The independent exhibition area included large-scale trial activities for three DNF IP products and other titles, attracting a diverse audience of mobile, tabletop, and console gamers [3] - Supercell presented seven games in a unique "Supercell Trendy Game Street" at the event, celebrating the 13th anniversary of "Clash of Clans" with special activities and inviting popular KOLs for player engagement [4] Group 3 - "MapleStory: Legend of Maple" celebrated its 2nd anniversary with a themed event, while "Wild Origin" featured a "Wild Evolution Station" inviting well-known cosplayers and content creators for interactive experiences [4] - Tencent and Ubisoft collaborated to launch the first motion-sensing dance mobile game "Dance Party: Party," which was showcased at the event with performances by popular KOLs [4]

Core Insights - Supercell's game "Clash Royale" has seen a significant resurgence in revenue, reaching $27.7 million in May 2023, a 46% year-over-year increase, and hitting a new monthly high of $37 million in June 2023 [3][5] - The game's daily active users (DAU) have surged, placing it among the top three globally, surpassing other Supercell titles like "Clash of Clans" and "Brawl Stars" [5][6] - Supercell's recent success is attributed to a shift in operational strategy, focusing on player experience and innovative gameplay, rather than solely relying on new game releases [6][19] Revenue Growth - "Clash Royale" achieved a monthly revenue of $27.7 million in May 2023, marking a 46% increase compared to the previous year [3] - In June 2023, the game's revenue further increased to $37 million, indicating a strong upward trend [3] - The game set a new daily revenue record of $3.8 million on July 8, 2023, following the introduction of a new game mode [5] Operational Strategy - Supercell has implemented significant changes in "Clash Royale," including removing barriers to player rewards and enhancing gameplay experiences [9][10] - The company has expanded its operational teams to focus on long-term game development and user retention, moving away from its traditional small team model [18][19] - Supercell's collaboration with popular streamers has also contributed to the game's renewed popularity, with notable streamers driving engagement and player interest [14][15] Market Position - Supercell's revenue has faced challenges, with a reported decline of over 4% year-over-year in 2023, prompting the need for strategic changes [18] - The company has restructured its management approach, dividing teams into those focused on new game development and those dedicated to enhancing existing titles [18][19] - The shift in strategy has resulted in a notable increase in user engagement and revenue for older titles, indicating a successful adaptation to market demands [19][23]