Group 1 - The gaming sector showed resilience with fluctuations, recovering from an early drop of over 2% on January 27, as the gaming ETF (159869) experienced a slight decline while individual stocks had mixed performances [1] - The gaming ETF (159869) reached a scale of 14.306 billion yuan as of January 26, with a net inflow of funds totaling 625 million yuan over three consecutive trading days, indicating strong investor interest [1] - Tencent is set to launch a Spring Festival event on February 1, distributing 1 billion cash red envelopes through the Yuanbao app, while Volcano Engine has become the exclusive AI cloud partner for the 2026 CCTV Spring Festival Gala [1] Group 2 - The National Press and Publication Administration approved 177 domestic online games in January 2026, reflecting ongoing regulatory support for the gaming industry [2] - Tencent plans to revive classic products like QQ Show and QQ Farm to reconnect with users emotionally, with the mobile game "QQ Classic Farm" successfully passing approval in December 2025 [2] - The gaming sector is experiencing multiple catalysts, including AI integration, content innovation, and changes in commercialization models, positioning the gaming ETF (159869) to benefit from favorable policies and product cycles [2]

Investment Rating - The report maintains a "Positive" investment rating for the gaming sector [6]. Core Insights - The number of game approvals in December reached a multi-year high, with significant titles from companies like Tencent, Kaiying, and 37 Interactive Entertainment receiving approval. The total number of game approvals for 2025 is expected to reach 1,771, a 25% increase from 2024, marking the highest number since 2019 [2][4][9]. - The report highlights a new product cycle for listed companies, with several key new games set to launch, suggesting continued investment opportunities in the gaming sector [2][4][9]. Summary by Sections Game Approval Highlights - In December, 147 game approvals were issued, including 144 domestic and 3 imported games. The total for 2025 is projected to be 1,771, with 1,676 domestic and 95 imported games, reflecting a stable approval rhythm [9]. - The pace of imported game approvals has accelerated, with monthly approvals starting from October 2024, averaging around 100 approvals annually over the past three years [9]. New Game Launches - Several companies are advancing their key new games, indicating the onset of a new product cycle. Notable launches include Giant Network's "Supernatural Action Group" and Tencent's "Counter-Strike: Future," among others [9]. - The report lists several companies to watch for investment opportunities, including Giant Network, Kaiying, Perfect World, 37 Interactive Entertainment, and Tencent [9].

Core Viewpoint - The article highlights a significant recovery in China's gaming industry, with a record number of game licenses issued in 2025, totaling 1,771, marking a more than 20% increase from 2024 and the highest number in nearly seven years [3][5]. Summary by Sections Game License Issuance - In December 2025, a total of 147 game licenses were issued, including 144 for domestic games and 3 for imported games, with notable titles from companies like Tencent and 37 Interactive Entertainment [4]. - The total number of domestic game licenses for 2025 reached 1,676, while imported game licenses amounted to 95, contributing to the overall total of 1,771 licenses, which is a significant increase from 1,416 in 2024 [5]. Industry Trends - The increase in game licenses is attributed to a shift towards high-quality games, with industry consensus on the importance of game quality driving the surge in license issuance [3]. - The gaming industry is expected to enter a new golden decade, supported by favorable policies and a growing international market for games [3]. Market Performance - The actual sales revenue of the domestic gaming market in 2025 reached 350.79 billion yuan, reflecting a year-on-year growth of 7.7%, with a user base of 683 million, marking a historical high for both metrics [6]. - The gaming industry is estimated to have generated an economic impact exceeding 1.2 trillion yuan, indicating its significant role in the broader economy [6]. Challenges and Future Outlook - Despite the increase in licenses, the industry faces challenges such as rising development costs and heightened competition, leading to a more cautious approach to new game launches [6]. - Major gaming companies are focusing on maintaining the longevity of existing game IPs and advancing technology to meet the evolving expectations of players [6].

Core Insights - The number of game licenses issued in China has steadily increased, reaching a total of 1,771 in 2025, marking a nearly seven-year high and a growth of over 20% compared to 2024 [1][7] - The surge in licenses is attributed to the industry's consensus on game quality improvement and the emergence of high-quality games, indicating a new golden decade for the Chinese gaming industry [1][7] License Distribution - In December 2025, a total of 147 game licenses were issued, with 144 for domestic games and 3 for imported games, including notable titles from Tencent and other companies [5] - The monthly distribution of licenses has been stable, with each month exceeding 100 licenses, peaking at 184 in November 2025 [6] Market Performance - The domestic gaming market's actual sales revenue reached 350.79 billion yuan in 2025, a year-on-year increase of 7.7%, with a user base of 683 million, also reflecting a growth of approximately 1.4% [7] - The gaming industry's economic impact has been assessed, with direct and indirect contributions exceeding 1.2 trillion yuan in 2025, highlighting the sector's role in the "cultural + technological" economic model [7] Industry Challenges - Despite the increase in licenses, the market remains competitive, with higher expectations for game quality and increased development costs, posing risks for developers [8] - Major gaming companies are focusing on maintaining the longevity of existing IPs and iterating on technology to meet player expectations and ensure engagement [8]