Core Viewpoint - The Chinese "ACG (Anime, Comic, Game)" gaming sector is experiencing a resurgence after a period of stagnation, with several major titles receiving approval or launching, marking a new industry peak similar to previous waves in 2015 and 2020 [1][2][5] Industry Trends - The current wave of ACG games is characterized by domestic developers no longer blindly following trends but instead focusing on developing their own intellectual properties (IPs) and integrating ACG elements with familiar game types, exploring niche markets [1][11] - The market is seeing a significant influx of new and established players, leading to a competitive environment that may result in a reshuffling of market positions [4][11] Game Launches and Performance - Notable game launches include "Victory Goddess: NIKKE," which achieved $1 billion in global revenue by January 2025, and "Pretty Derby," which returned after a 622-day hiatus, generating approximately $203 million in its first 12 days [2][3] - Other successful titles include "杖剑传说," which generated over 200 million yuan in its first month, and "最终幻想14：水晶世界," which began testing in June 2025 [3][4] Market Dynamics - The ACG gaming sector has experienced three major peaks over the past decade, with the current trend being driven by a more mature understanding of the market and player preferences [5][6] - Previous failures in the sector were often due to a lack of depth in storytelling and gameplay, leading to a "winner-takes-all" scenario where only a few titles succeeded [6][10] Cultural Shifts - The rise of "Guochao" (national trend) has allowed domestic developers to resonate more with local audiences, reducing cultural barriers and enhancing emotional connections with players [12][13] - The development of game-related merchandise is gaining traction, reflecting a shift in focus towards creating a broader ecosystem around ACG titles [12][13] Future Outlook - The current trend indicates a diversification of gameplay styles, with developers exploring various genres such as ARPG, shooting, and open-world games, which may lead to new market opportunities [11][12] - There is speculation about the potential for a "GTA-style" ACG game to emerge, with titles like "异环" and "无限大" being closely watched for their market impact [14][15][16]

Core Viewpoint - The Chinese "ACG (Anime, Comic, Game)" gaming sector is experiencing a resurgence after a period of stagnation, with several major titles receiving approval or launching, marking a new wave of industry excitement similar to past peaks in 2015 and 2020 [1][2][7] Industry Trends - The current wave of ACG games is characterized by a shift from blind imitation to the development of original IPs, with companies exploring niche markets and integrating ACG elements with familiar game genres [1][14] - The market is seeing a diverse range of game types, including card games, retro styles, and SLG, indicating a broader appeal to ACG players [14][15] New Entrants and Game Launches - A number of new and returning titles are launching, including "Victory Goddess: NIKKE," which achieved significant revenue shortly after its release [2][4] - Established titles like "Pretty Derby" are also making comebacks, with strong community engagement despite lower initial performance metrics [4][5] Major Upcoming Titles - Anticipated releases include Perfect World's "Yihuan," which has garnered over 300,000 pre-registrations, and Tencent's adaptation of the popular comic "Yiren Zhi Xia" [5][8] - The trend of exporting games to international markets before domestic launches is becoming more common, with titles like "Ruyuan" leading the way [15][17] Market Dynamics - The ACG gaming sector has experienced three major peaks over the past decade, with the current phase being distinct due to the focus on quality and innovation rather than mere replication of successful formulas [7][12] - The industry is witnessing a competitive landscape where both established and new players are vying for market share, potentially leading to a reshuffling of the market [6][9] Cultural Integration - The rise of "Guochao" (national trend) is influencing ACG games, allowing developers to connect more deeply with local audiences through culturally resonant themes [17][18] - The development of game-related merchandise is gaining traction, reflecting a growing recognition of the potential for additional revenue streams beyond the games themselves [17][18] Future Outlook - Analysts suggest that the likelihood of a breakout hit akin to "GTA" in the ACG space is low in the current competitive environment, as many developers focus on monetization rather than long-term product development [19][21] - The potential for independent PC games to emerge as significant players in the ACG market is noted, emphasizing the importance of narrative and emotional connection over gameplay mechanics [21][22]

Core Viewpoint - The gaming market in China is witnessing the return of two major titles, Tencent's "Victory Goddess: New Hope" and Bilibili's "Shining! Yujun Girl," both of which have shown unexpected market performance after their respective launches [1][22]. Group 1: Game Performance - "Shining! Yujun Girl" had a long development cycle of five years and was initially launched in Japan in February 2021, generating over 5.1 billion yuan in its first month and approximately 50 billion yuan in total revenue for the year [3][17]. - The game returned to the Chinese market on May 22, 2023, after nearly two years of absence, but its performance has been underwhelming, with only 203 million yuan in revenue over 12 days on iOS [6][12]. - "Victory Goddess: New Hope" generated 24 million yuan in revenue within its first 12 days, which is significantly lower than other major titles like "Dungeon and Fighter: Origin" [32][37]. Group 2: Market Dynamics - Both games faced challenges in their marketing strategies, with "Shining! Yujun Girl" opting for a low-profile re-launch that coincided with the release of "Victory Goddess," impacting its visibility and player engagement [16][37]. - The download trends for "Shining! Yujun Girl" showed a decline, with approximately 66,000 downloads over 12 days, indicating a lack of sustained interest [12][25]. - The competitive landscape in the Chinese mobile gaming market is intensifying, with players becoming more selective and demanding higher quality content, making it increasingly difficult for overseas titles to succeed upon their return [37][38]. Group 3: Future Outlook - The future success of "Shining! Yujun Girl" will depend on the developers' willingness to invest in marketing and content optimization to attract new and returning players [16][37]. - The performance of "Victory Goddess" is being closely monitored, as its initial results are considered average compared to expectations set by its overseas success [32][37]. - The overall trend suggests that the chances of overseas games succeeding in the Chinese market are diminishing, with local developers having a better chance of success with self-developed titles [37][38].

Core Viewpoint - Goldman Sachs maintains a buy rating on Bilibili and updates its forecasts following the company's Q1 2025 earnings release and non-deal roadshow [1] Group 1: Gaming Business - Goldman Sachs expresses optimism about Bilibili's gaming business, particularly with the unexpected relaunch of the game "Shining! Yujun Girl" on May 22, 2023, after a long suspension, estimating annual revenue of 500 million RMB for the game [2] - The upcoming anniversary celebration for "Romance of the Three Kingdoms: Fantasy Continent" is expected to act as a catalyst for improved performance, with significant gameplay changes planned for the new S8 season [2][5] - Management indicates that the revenue from the seventh season of "Romance of the Three Kingdoms: Fantasy Continent" remained stable compared to the sixth season, with expectations for improvement in the eighth season due to enhanced monetization and new gameplay [5] Group 2: Advertising Business - Bilibili continues to be one of the faster-growing platforms in China's advertising market, with significant potential for monetization through increased ad load and effective cost per thousand impressions (eCPM) [2] - The top five advertising sectors in Q1 2025 were games, internet services (including AI), e-commerce, digital appliances, and automotive [12] - Effective advertising saw the fastest growth in Q1 2025, increasing by 30-40% year-over-year, now accounting for over 50% of total ad revenue [13] Group 3: Financial Flexibility and Profitability - Following the earnings release, Bilibili completed a $690 million convertible bond issuance and a $100 million stock buyback, which may enhance financial flexibility and support future investments in game studios [3] - Management aims for a long-term gross margin of 40-45% and an adjusted operating margin of 15-20%, focusing on a favorable revenue structure and operational leverage [15] - The gaming business is expected to achieve a comprehensive gross margin of 60-70%, while the advertising business is projected to maintain a gross margin above 60% [15][16]

Group 1: Domestic and Imported Games Approval - The National Press and Publication Administration approved 130 domestic games and 14 imported games in May, indicating continued regulatory support for the gaming industry [1] - Among the approved domestic games, Perfect World's "Yihuan" received licenses for mobile, PC, and console platforms (PS5), showcasing the potential for multi-platform success [1] - The approval of new games is expected to boost market confidence in leading gaming companies and positively impact the gaming sector [1] Group 2: Netflix's Adaptation of "Clash of Clans" - Netflix announced the adaptation of the popular mobile game "Clash of Clans" by Finnish company Supercell into an animated series, marking a strategic move to explore new content formats [2] - This initiative may attract more subscribers to the streaming platform and positively influence both the gaming and film sectors [2] - The adaptation reflects a growing trend of cross-industry collaboration, enhancing market expectations for integrated content [2] Group 3: Relaunch of "Shining! Youthful Girls" - The Chinese version of "Shining! Youthful Girls," based on "Uma Musume," will reopen its download portal after a nearly one-year hiatus, indicating a strategic shift in its operational approach [3] - The game underwent a version update with changes to UI, text, illustrations, and scenes, aiming to attract returning players [3] - This relaunch is likely to strengthen market confidence in the niche of 2D games and enhance expectations for refined game operations [3]

Core Insights - Bilibili reported a strong financial performance in Q1 2025, with adjusted net profit reaching 362 million yuan and revenue of 7 billion yuan, marking a 24% year-on-year increase [2][8] - The company's gaming segment saw significant growth, with revenue increasing by 76% to 1.731 billion yuan, driven by the success of exclusive games [6][8] - Bilibili's user engagement metrics improved, with daily active users reaching 107 million and monthly active users hitting a record 368 million [3] Financial Performance - Q1 2025 revenue was 70 billion yuan, up 24% year-on-year, with advertising revenue at 1.998 billion yuan (20% increase) and mobile gaming revenue at 1.731 billion yuan (76% increase) [2][5] - The overall gross profit increased by 58% year-on-year, with a gross margin of 36.3% [8] - Value-added services revenue reached 2.81 billion yuan, an 11% increase, while IP derivative and other income decreased by 4% to 467 million yuan [5] User Engagement - Daily active users reached 107 million, with monthly active users at 368 million, and average daily usage time increased to 108 minutes [3] - The number of monthly paying users reached a new high of 32 million [3] - The content ecosystem continues to thrive, with a 24% increase in viewing time for ACG-related content and a 14% increase for gaming content [3] Gaming Business - The gaming segment's revenue growth was primarily attributed to the performance of the exclusive game "Three Kingdoms: Strategy of the World" [6] - Bilibili plans to launch a traditional Chinese version of "Three Kingdoms" and expand to PC and mini-games [7] - The company has four to five new games ready for release pending approval, indicating a proactive approach to exploring new gaming opportunities [7] Content Strategy - Bilibili emphasizes high-quality content as a key driver for user retention and engagement, with a focus on diverse and enriching video offerings [4] - The platform supports creators with various monetization options, leading to a 16% year-on-year increase in the number of creators earning income through advertising [5] - The company aims to strengthen its content strategy further, enhancing the visibility and revenue potential for quality creators [4]