Summary of Key Points from the Conference Call Industry Overview - The gaming sector's valuation has reached a lower limit of 15 times, with expectations of maintaining high prosperity and performance growth certainty through 2026, making it an attractive investment opportunity [1][3][25] - The A-share market recommends a "3+2" combination: Giant Network, Kaiying Network, and Century Huatong as stable fundamentals; Gibit and 37 Interactive are positioned lower but showing recent improvements [1][4] Company-Specific Insights Tencent - Expected to launch multiple mid-sized new games in 2026, with a diverse range of genres [7] - Notable titles include "Under One Person," "Rock Kingdom World," and "Monster Hunter Traveler" [7] NetEase - Anticipates additional revenue of 2-3 billion from international IP adaptations and domestic MMO games [2][24] - Key upcoming titles include "Forgotten Sea" and "Infinite," with the former developed by the team behind "Identity V" [7][24] Giant Network - "Famous General Kill" is expected to contribute 200-300 million in profit, with "Supernatural Action Group" potentially increasing annual revenue to 7-8 billion if successful during the Spring Festival [10][12] Kaiying Network - The "Legend Box" platform is driving growth, with DAU expected to reach 650,000 to 700,000 by the end of 2026, and annual advertising revenue projected at around 2.4 billion [10][13] Bilibili - Strong growth in advertising business, with expectations to outperform the overall internet advertising growth rate [21] - Anticipated game revenue growth in the low double digits, with "Three Kingdoms Hundred Generals Card" projected to generate 1-1.5 billion [21] Gibit - Recent performance impacted by a decline in revenue from "Sword of the World," but new game "Nine Mu of the Wild" expected to contribute 1-1.5 billion [19][20] Heart Company - Facing stock price pressure but has potential due to rapid progress in programmatic advertising, with profits expected to reach 150-200 million in 2026 [22] Market Trends and Predictions - The gaming sector is expected to maintain strong growth certainty compared to other sectors, with a focus on identifying high-certainty investment targets [25] - The first quarter of 2026 is anticipated to be stable, with significant product launches concentrated in the summer [11][25] Additional Insights - The competitive landscape is expected to increase in 2026, but companies will focus on their strengths without excessive suppression of smaller firms [11] - The overall sentiment is optimistic for the gaming industry, with a recommendation for investors to strategically select stocks based on performance certainty and market conditions [25]

Core Insights - The National Press and Publication Administration released the approval information for domestic online games in October 2025, granting a total of 166 licenses, including 159 domestic and 7 imported games [1][3] - The number of game licenses issued in October is the second highest this year, following August's 173 licenses, bringing the total for 2025 to 1,440 licenses, with 1,354 for domestic games and 86 for imported games [1] Group 1: Game Categories and Companies - Over 40% of the approved games in October are casual mobile games [1] - Notable companies receiving approvals include FunPlus, 37 Interactive Entertainment, Klei Entertainment, Youzu Interactive, and Eagle Horn Network [1][3] - Key products approved include Eagle Horn Network's "Arknights," 37 Interactive Entertainment's "Survival 33 Days," and Klei Entertainment's "Blue Moon Hero" [3] Group 2: Absences and New Entries - Notably, NetEase was absent from the list of approved games, while Tencent only had one game approved, "Eight Desolate Journey," operated by Guangzhou Kugou Computer Technology Co., Ltd [3] - The mobile game "Tomorrow's Prologue," operated by Beijing San快 Technology Co., Ltd, is linked to Meituan, co-owned by Meituan's founders Wang Xing and Mu Rongjun [3][4]

Core Insights - The National Press and Publication Administration released the approval information for domestic online games in October 2025, issuing a total of 159 domestic game licenses [1] - Among the newly approved licenses, 155 are for mobile games, 4 for client games, and 8 games received both mobile and client licenses [1] - A total of 7 new import game licenses were also issued, with 2 games receiving both mobile and client licenses [1] - As of October 2023, a total of 1,354 domestic game licenses have been issued this year [1] Domestic Game Licenses - Notable domestic games approved include titles from well-known companies such as: - 37 Interactive Entertainment's "Survival for 33 Days" - Eagle Horn's "Arknights" (client) - Youka's "Three Kingdoms Kill: Face-to-Face Duel" - Zulong's "Cloud Dream Westward" - Others from various developers [3] Import Game Licenses - The newly approved import game licenses include 7 titles, maintaining a stable overall quantity [4] - Notable titles include: - "Multiverse: Night Crisis" by Shanghai Haowan Orange - "Flying: Infinite Universe" by Beijing Ruiwo - "Crayon Shin-chan" by Shanghai Qizhuo [5] License Changes - There were also updates on changes to existing domestic game licenses, including: - Wangchen Technology's "NBA Peak Showdown" now has an added client version - Perfect World’s "Tower of Fantasy" has added a PS5 version [6][7]

Core Insights - The interaction and evolution of the Chinese gaming industry with Europe is highlighted, focusing on three main directions for deepening cooperation: AI technology collaboration, cross-cultural creative co-creation, and global talent cultivation [1][4]. Industry Overview - The China-Europe gaming industry is entering a new phase of technological evolution and content innovation, with the European market continuing to grow. Countries like the UK, France, Germany, and Poland host numerous high-quality independent studios and AAA developers, leading in creative incubation and industrialization of AAA titles [2]. - In China, the domestic gaming market revenue is projected to reach 325.8 billion yuan in 2024, with self-developed games generating overseas revenue of $18.557 billion. The capability of domestic games in global technology and cultural expression is continuously improving [2]. Company Highlights - Perfect World has established a long-term cooperative relationship with Europe since launching "Perfect World International" in 2006, successfully publishing and operating several well-known games in Europe and promoting the integration of global technology and creativity [2]. - The game "Very Hero," developed by Perfect World's Sino-French team, won the Best Animated Character (Game Category) at the 47th Annie Awards, showcasing a high degree of cross-cultural integration [2]. - Perfect World's self-developed open-world game "Tower of Fantasy" topped the iOS free game charts in nearly 40 countries and regions after its overseas launch in 2022. In June 2023, "Persona 5: Phantom X" achieved top rankings in the iOS free charts in 25 countries, including the UK, Germany, France, the US, and Japan, and topped the Steam download charts [2]. Future Directions - The future of the global gaming industry will focus on the integration of technology reserves, cultural expression, and global collaboration. The cooperation space between China and Europe is expanding, with distinct development advantages and complementary paths [3][4]. - The potential for China-Europe cooperation extends beyond products and markets to the co-construction of industry concepts and mechanisms. Future collaboration can occur in AI technology, cross-cultural co-creation, and global talent cultivation [4]. - Perfect World has initiated educational collaborations, such as a master's program in game development with the University of Aberystwyth in the UK, and is progressing with a digital arts master's program with the University of Hertfordshire [4].

Summary of Key Points from the Conference Call Industry Overview - The global gaming market is projected to reach $187.7 billion in 2024, with PC and console games accounting for $37.3 billion and $42.8 billion respectively, together representing 43% of the market, indicating a preference for heavy PC and console gaming among overseas users [1][3] - The domestic gaming market in China is expected to total 325.8 billion yuan in 2024, with client and console games combined reaching 72.5 billion yuan, a year-on-year growth of 5%, but only accounting for 23% of the total market, significantly lower than the 43% overseas [1][5] Market Trends - The domestic client gaming platform has shown a recovery trend since 2021, projected to reach 68 billion yuan in 2024, a 2.6% increase, marking a historical high; console gaming is expected to grow by 55% to 4.5 billion yuan [1][6] - The number of PC client game licenses and console game licenses has increased by 19.5% and 35% respectively, indicating a positive trend in regulatory approvals [6] Supply and Demand Dynamics - The supply side has seen explosive growth in domestic end games since 2017, with titles like "Naraka: Bladepoint" selling over 7 million copies in its first year and "Black Myth: Wukong" exceeding 28 million copies sold, generating 9 billion yuan in revenue [1][11] - The demand side is characterized by a rapid increase in users on the Steam platform in China, with the number of users growing from 10 million in 2016 to 155 million in 2023, and the proportion of simplified Chinese users surpassing 50% for the first time [11] Future Potential - The domestic PC and console gaming market has significant growth potential, with a user penetration rate of only 26% compared to the global average of 65%. The annual ARPU (Average Revenue Per User) is approximately 400 yuan, compared to nearly 600 yuan globally, indicating a potential increase of 50% [12] - By improving domestic penetration rates and expanding overseas, the market could see an incremental growth of around 100 billion yuan, representing a substantial opportunity for gaming companies [12] Major Players and Strategies - Major domestic players like Tencent and NetEase are increasing their investments in PC and console gaming platforms. Tencent's recent titles have shown strong performance, with "Delta Action" achieving over 12 million daily active users [13][17] - NetEase is also expected to experience a surge in new releases, with several high-quality titles in the pipeline, indicating a robust supply side in the coming years [15] International Market Outlook - Although the penetration of domestic firms in overseas console and end-game markets is currently low, there is optimism for improvement as competitiveness increases. Companies like Tencent are enhancing their capabilities in competitive genres, suggesting a positive trend for future market performance [18]

Core Viewpoint - The recent updates of fishing gameplay in popular anime-style games like "Zhongqu Zero" and "Mingchao" have sparked discussions and comparisons among players, highlighting a trend in the gaming industry towards simplified mini-games as a means to engage users and provide rewards [2][4][9]. Group 1: Game Updates and Comparisons - Both "Zhongqu Zero" and "Mingchao" introduced fishing-themed activities within a day of each other, leading to player comparisons and discussions across both domestic and international platforms [2][6]. - Players have criticized the fishing mini-games for being unoriginal and lacking depth, with some expressing disappointment over the simplistic gameplay mechanics [7][30]. - The trend of integrating fishing mechanics into anime-style games reflects a broader industry shift towards casual gaming experiences, as seen in other titles like "Infinite Nuan Nuan" and "Dust White Zone" [9][11]. Group 2: Mini-Game Design and Player Experience - The fishing mini-games in "Zhongqu Zero" and "Mingchao" are designed to be easy and accessible, catering to players who prefer to complete tasks quickly for rewards rather than engaging in challenging gameplay [19][28]. - Both games utilize narrative elements and popular characters to enhance player engagement, but the mini-games themselves are often perceived as repetitive and lacking excitement [31][32]. - The simplification of mini-game mechanics is a response to player feedback, aiming to avoid frustration while still providing a sense of accomplishment through rewards [20][36]. Group 3: Industry Trends and Business Models - The prevalence of mini-games in anime-style games is linked to the industry's reliance on gacha mechanics, where players are incentivized to engage in repetitive tasks to earn resources for character upgrades [35][39]. - The design of mini-games serves as a tool for resource distribution, balancing the need for player engagement with the necessity of maintaining a sense of value in the rewards earned [36][37]. - The ongoing challenge for developers is to innovate within the constraints of the gacha model, as the current approach often leads to a cycle of uninteresting gameplay experiences [38][41].