Investment Rating - The industry investment rating is "Outperform the Market" with an expectation of over 10% relative increase in the industry index compared to the market in the next six months [5][24]. Core Insights - The recent reduction of the Apple Store commission rate in China is seen as a strategic move by Apple to balance revenue distribution between developers and the platform, which is under regulatory and competitive pressure. This adjustment is expected to significantly improve profitability for long-term operational products with high iOS channel share and strong user payment capabilities [10][11]. - The gaming industry is expected to continue its long-term growth due to a steady release of new products and normalization of licensing approvals. It is recommended to focus on leading companies with product reserves, R&D capabilities, and mature global operations. The rise of AI capabilities is anticipated to drive commercialization in various application scenarios, particularly in AI+ content creation, AI+ gaming, and AI+ marketing [2][10]. Summary by Sections Industry Dynamics - Apple announced a reduction in the standard commission rate for in-app purchases and paid apps from 30% to 25%, effective March 15, 2026. The commission rate for eligible small developers and subscription renewals will decrease from 15% to 12% [3][20]. - The global mobile game revenue rankings for February 2026 were released, with "Last War: Survival Game" at the top, followed by "Honor of Kings" in second place. "Peacekeeper Elite" rose to the top five due to updates related to the Spring Festival and Ferrari collaboration [3][22]. - Tencent's upcoming game "Kingdom of Pets: World" has nearly 50 million pre-registrations, ranking among the top five in Tencent's history. The game will feature over 400 pets available for free, with plans to add over 200 new pets annually [3][22]. - The 2026 China TV Production Industry Conference highlighted AI as a core driver for restructuring the film and television ecosystem, with a focus on deepening revenue-sharing models and parallel development of various types of series [3][23]. Industry Valuation - The SW Media industry PE (TTM) valuation decreased from 27.68X to 27.10X, but remains above the average level of 26.24X from 2018 to 2025, reflecting a 3.27% increase [4][17].

Global Mobile Game Market Overview - In August 2025, global player spending on mobile games reached approximately $7.15 billion, reflecting a month-over-month increase of 1% [1][4] - The United States led the market with $2.3 billion, accounting for 32% of total spending, followed by China's iOS market at 15.3% and Japan at 12.8% [1][4] Top Revenue-Generating Games - FUNFLY's "Last War: Survival Game" maintained its position as the top-grossing mobile game globally, driven by seasonal events and promotional activities [3] - "Honor of Kings" rose to the second position, benefiting from high-profile collaborations and the release of premium skins, including a partnership with a popular Chinese fantasy novel [3][5] - "Pokémon GO" topped the revenue growth chart, with significant income boosts from major events like the "GO Fest 2025" and collaborations with the "Pokémon World Championships" [4] Tencent's Performance - Tencent had four titles in the revenue growth rankings for August, including "Honor of Kings" and "Peacekeeper Elite," both of which saw revenue increases due to major updates and collaborations [5] - "League of Legends: Wild Rift" also experienced revenue growth from significant updates, maintaining user engagement and spending [5] Mobile Game Download Trends - "ROBLOX" continued to lead the global download chart in August, supported by various content updates and collaborations [6][8] - "Free Fire" climbed to the second position in downloads, aided by a collaboration with the popular anime "Naruto Shippuden" [8] - The total global mobile game downloads remained stable at approximately 4.31 billion, with India leading at 7.02 million downloads [9] Emerging Games and Market Dynamics - New titles like "Steal n Catch the Brainrot" and "Kpop Piano Beats" rapidly gained popularity, reflecting the strong cultural appeal and viral potential in the mobile gaming space [9][10] - "Valorant: Source Action" launched exclusively in China, achieving significant download growth, indicating a strong demand for innovative FPS mobile experiences [10]