Core Insights - Supercell reported a revenue of €2.65 billion (approximately ¥218 billion) and an EBITDA of €930 million (approximately ¥77 billion) for 2025, matching the historical best performance of 2024, demonstrating the value of long-termism in a stagnating industry [1][44] - The blog highlights two contrasting narratives: the resurgence of "Clash Royale" and the failure of "Brawl Stars," emphasizing the need for innovation and risk-taking in the gaming industry [5][19] Group 1: Performance Highlights - "Clash Royale" experienced a historic resurgence with player engagement metrics showing a doubling of returning players and nearly 500% growth in new players, marking a significant achievement for a nearly ten-year-old game [11][12] - The success of "Clash Royale" was attributed to team efforts in simplifying gameplay and introducing appealing new content, which improved player experience and engagement [13][14] - Supercell's overall financial performance in 2025 was one of its best years, with a notable contribution from "Clash Royale," reflecting a strong product portfolio and commitment to player experience [44][45] Group 2: Lessons from Failures - "Brawl Stars" became the first game in Supercell's history to be shut down after global release, highlighting the challenges of launching new titles in a competitive market [19][20] - Key lessons from the failure of "Brawl Stars" include the importance of extensive testing for long-term retention and the need for a deeper understanding of player expectations before large-scale marketing [21][22] - The experience with "Brawl Stars" reinforced the company's culture of learning from failures and the necessity for bold innovation in game development [24][25] Group 3: Industry Context - The mobile gaming market has seen a modest average annual growth rate of only 3% over the past five years, indicating a stagnation in the industry [9][24] - A significant disparity exists in the success of new games, with only 22 out of approximately 53,000 new mobile games released since 2020 achieving over $1 billion in revenue, predominantly from developers in China, Japan, and South Korea [24][25] - The industry is criticized for focusing on optimizing existing games rather than pursuing radical innovations that could attract new players and expand the market [26][27] Group 4: Strategic Initiatives - Supercell plans to double its investment in new games and innovation in 2025, aiming to create an environment conducive to both long-term game support and new game development [29][30] - The company has restructured its organization to foster independent teams for long-term games and new game development, allowing for distinct cultures and operational methods [30][32] - Supercell is committed to combining the best traits of startups with the advantages of a mature company, emphasizing the need for ambitious founders and a structured approach to innovation [32][34]

Core Insights - The global mobile game revenue rankings for January 2026 show significant fluctuations in income among top titles, with some games experiencing substantial growth while others face declines. Group 1: Top Performers - "Honor of Kings" continues to shine with in-app revenue soaring from approximately $79 million in December to $172 million in January, nearing its historical record of $184 million set in October 2021 [1] - "PUBG Mobile" saw its in-app revenue nearly double from $53 million in December to nearly $103 million in January, with about 80% of revenue coming from Chinese players [2] - "Monopoly Go" rebounded to over $120 million in January, marking a significant year-on-year increase from $104 million in January 2025 [1] Group 2: Notable Trends - "Roblox" experienced a decline in revenue from approximately $125 million in December to $107 million in January, remaining stable compared to January 2025 [2] - "Candy Crush" maintained stable performance with a slight month-on-month increase in in-app revenue for four consecutive months [3] - "Genshin Impact" achieved its best revenue since June 2025, although its monthly income remains highly unstable compared to its peak from 2020 to 2023 [5] Group 3: Emerging Titles - "Kingshot" recorded a new historical high with in-app revenue close to $72 million in January, continuing its growth trend [3] - "MapleStory: Idle RPG" has shown strong performance since its launch in November, achieving approximately $33 million in in-app revenue for two consecutive months [5] - "Gossip Harbor" set a new record by surpassing $80 million in revenue for the first time [3] Group 4: Declining Performers - "Pokémon Go" saw its in-app revenue drop to $26 million in January, the lowest since November 2017, ranking 25th [6] - "Clash Royale" experienced a sharp decline, with in-app revenue falling to $2.6 million in January, nearly half of December's figures, marking the lowest monthly record since May 2025 [6]

Core Viewpoint - Tencent Holdings is expected to report Q4 2025 earnings with a revenue forecast of 194.6 billion yuan, representing a 13% year-on-year growth, driven by stable performance in online advertising, gaming, and financial technology sectors [1][4]. Group 1: Gaming Sector - The online gaming revenue is projected to reach 58 billion yuan in Q4 2025, reflecting an 18% year-on-year increase, with strong performances from established titles like "Honor of Kings" and "Peacekeeper Elite" [2][5]. - The new game "Delta Action" is expected to perform well, with user acquisition efforts ramping up during the 2026 Spring Festival, potentially boosting revenue further [2][5]. - The overseas gaming market is anticipated to grow by 22% year-on-year, with titles like Supercell's "Clash Royale" and the AAA game "Dying Light: The Following" showing strong performance [2][5]. Group 2: Marketing Services - Marketing services revenue is expected to reach 41.3 billion yuan in Q4 2025, marking an 18% year-on-year growth, supported by stable growth in video accounts and the release of more advertising inventory [2][5]. - AI integration in advertising is projected to mitigate macroeconomic pressures, with significant reductions in operational tasks for advertisers, enhancing overall efficiency [2][5]. Group 3: Financial Technology and Enterprise Services - Financial technology and enterprise services revenue is forecasted to be 61.2 billion yuan, showing a 9% year-on-year increase, primarily driven by payment services [3][6]. - The introduction of AI applications and tools in WeChat mini-programs is expected to provide comprehensive support for developers, facilitating the rapid transformation of ideas into profitable products [3][6]. Group 4: Investment Outlook - The company is increasing investments in AI talent and capabilities, with a long-term growth potential in areas like WeChat e-commerce and AI Agent empowerment not fully reflected in current profit forecasts [3][6]. - Adjusted net profit estimates for 2025-2027 are projected at 260.1 billion, 296.1 billion, and 339.9 billion yuan, with slight downward adjustments of 1%-2% [3][6].

Investment Rating - The investment rating for Tencent Holdings is "Outperform the Market" (maintained) [2][8][23] Core Views - Tencent is expected to achieve revenue of CNY 194.6 billion in Q4 2025, representing a year-on-year growth of 13%. The network advertising sector is anticipated to perform steadily, benefiting from the release of advertising inventory and AI integration. The gaming business is expected to show strong performance, particularly with the game "Delta Operation" [4][9] - The company is increasing its investment in AI, which is expected to offset some operational leverage release. The AI investment will primarily manifest in R&D expenses, projected to grow by 28% in Q4 2025 [4][10] - The gaming segment is projected to generate revenue of CNY 58 billion in Q4 2025, with a year-on-year growth of 18%. Domestic game revenue is expected to grow by 16%, supported by established titles like "Honor of Kings" and "Peacekeeper Elite" [5][15][21] - Marketing services revenue is expected to reach CNY 41.3 billion in Q4 2025, reflecting an 18% year-on-year increase, driven by AI enhancements in advertising efficiency [6][19] - Financial technology and enterprise services are projected to grow by 9% year-on-year, with revenue expected to reach CNY 61.2 billion in Q4 2025, primarily driven by payment services [20] Summary by Relevant Sections Financial Performance - Q4 2025 revenue is expected to be CNY 194.6 billion, with a 13% year-on-year increase. Non-IFRS operating profit is projected at CNY 68.1 billion, up 15% year-on-year, and net profit is expected to be CNY 65.2 billion, reflecting an 18% increase [4][10][11] - The expected Non-IFRS net profit margin is 34% for Q4 2025 [10] Gaming Business - The gaming revenue forecast for Q4 2025 is CNY 58 billion, with an 18% year-on-year growth. Domestic game revenue is expected to grow by 16%, while overseas game revenue is projected to increase by 22% [5][21] Marketing Services - Marketing services revenue is anticipated to be CNY 41.3 billion in Q4 2025, marking an 18% year-on-year growth. AI-driven enhancements are expected to improve advertising efficiency significantly [6][19] Financial Technology and Enterprise Services - Revenue from financial technology and enterprise services is expected to reach CNY 61.2 billion in Q4 2025, with a 9% year-on-year growth, primarily driven by payment services [20]

Core Insights - The global mobile game revenue ranking for 2025 shows increased competition, with several games surpassing $1 billion in revenue, but Tencent's "Honor of Kings" remains the top earner at $1.68 billion [1][2]. Revenue Rankings - "Honor of Kings" generated $1.68 billion in 2025, a slight decrease from $1.74 billion in 2024, with the majority of revenue coming from China and the U.S. contributing approximately $8.5 million [1]. - "Last War" by FunFly achieved $1.57 billion in revenue, up from $1.1 billion in 2024, despite not being launched in mainland China [1]. - "Roblox" saw revenue growth to nearly $1.49 billion in 2025, up from $1.1 billion in 2024, driven by popular user-generated content [2]. - "Whiteout Survival" from Century Huatong increased its revenue from $936 million in 2024 to $1.4 billion in 2025, ranking fourth [2]. - "Royal Match" by Dream Games earned $1.37 billion in 2025, slightly down from $1.39 billion in 2024, possibly due to competition from its new title "Royal Kingdom" [3]. - "Monopoly Go" generated $1.36 billion in 2025, down from $1.43 billion in 2024, with significant revenue from web stores [3]. - "PUBG Mobile" reported $1.12 billion in revenue, showing slight growth, but faced a decline in momentum towards the end of 2025 [4]. - "Candy Crush Saga" achieved $1 billion in revenue, marking its first time surpassing this threshold, with a slight increase from $980 million in 2024 [4]. - "Coin Master" earned approximately $650 million, continuing a trend of declining revenue for the third consecutive year [5]. Additional Rankings - The 11th to 20th ranked games include "Gossip Harbor" at $550 million, "Pokémon Go" at $494 million, and "Clash Royale" at $453 million, with notable growth for "Gossip Harbor" and "Clash Royale" [6][7]. - "Pokémon Go" has seen a decline in revenue for four consecutive years, dropping below $500 million in 2025 [7]. - "Bun Bun Kingdom" generated nearly $450 million in its first year, indicating potential for future growth [8]. - "Honkai: Star Rail" experienced a revenue drop from $562 million in 2024 to $423 million in 2025, while "Genshin Impact" also saw a decline [8].

Core Insights - The global mobile game revenue is projected to grow by 0.5% year-on-year in 2025, with eight titles surpassing $1 billion in revenue after platform cuts [1] - Tencent leads the revenue rankings with six titles contributing over $4 billion to its total revenue [2][10] - The mobile game download volume is expected to increase by 4.6% year-on-year, with over 50% of the top 30 games achieving over 100 million downloads [1] Group 1: Revenue Highlights - "Honor of Kings" retains the top position with an estimated revenue exceeding $1.6 billion in 2025, achieving a record high of over $1.8 billion in January [6] - "Delta Force" has emerged as a significant growth driver for Tencent, with total revenue exceeding $355 million and a ranking increase of 557 places [6][8] - "Last War: Survival" ranks second with total revenue surpassing $1.5 billion, reflecting a 40% year-on-year growth [11] Group 2: Performance of New Titles - "Gossip Harbor" and "Kingshot" are notable new entries in the top 30, with "Gossip Harbor" achieving a total revenue of $550 million, marking a 190% year-on-year increase [20][27] - "Kingshot" is the only new title in the 2025 rankings, showcasing the potential for new games to capture market share [1][27] Group 3: Market Trends - The strategy game segment shows strong performance, with 70% of the top 30 games being mid-core, primarily in strategy and RPG genres [1][11] - Chinese developers have a significant presence, with 12 titles in the top 30, highlighting the growing influence of Chinese gaming companies in the global market [2][27] - The competitive landscape is intensifying as companies innovate gameplay and content to cater to both local and international markets [27]

Core Viewpoint - Tencent has demonstrated stable growth and resilience in its financial performance, with significant revenue and profit increases in 2025, indicating a strong outlook for 2026 and beyond [2][3]. Financial Performance - In the first three quarters of 2025, Tencent's total revenue exceeded 557.3 billion yuan, a year-on-year increase of 14.26% - The net profit attributable to shareholders reached 166.58 billion yuan, growing by 16.7% - In Q3 alone, revenue was 192.87 billion yuan, marking a 15.4% year-on-year growth, continuing a trend of double-digit growth over multiple quarters [2]. Business Engines - **Gaming Business**: Tencent's gaming sector has successfully expanded internationally, with Q3 international game revenue surpassing 20 billion yuan, a 54% increase year-on-year. The domestic market remains strong with popular titles like "Honor of Kings" and "Peacekeeper Elite" [3][4]. - **Advertising Business**: Enhanced by AI, Tencent's marketing services revenue grew by 21% in Q3, reaching 36.2 billion yuan, driven by improved ad targeting and creative optimization [3][5]. - **Financial Technology and Cloud Services**: Both sectors are experiencing recovery, with cloud services benefiting from increased AI demand and financial technology seeing growth from commercial payments and consumer credit [3][4]. AI Integration - Tencent's investment in AI has exceeded 60 billion yuan in the first three quarters of 2025, with Q3 alone accounting for 22.8 billion yuan, marking a record high for quarterly investment [5]. - AI is being integrated across various business lines, enhancing advertising revenue, cloud services, and game content generation, thus driving overall productivity and revenue growth [5][6]. Future Outlook - By 2026, Tencent is expected to transition from a company reliant on social and gaming traffic to one driven by AI, with global gaming as a cash cow and WeChat as a smart entry point [7]. - AI is anticipated to become a profit center, with operational efficiencies spreading across all departments, further enhancing profit margins [7]. - The international gaming market is projected to outpace domestic growth, with AI technology expected to shorten game development cycles significantly [7][8]. - WeChat is evolving into an "AI super entry point," potentially revolutionizing user interactions and driving explosive growth in GMV for WeChat stores [7][8].

Core Insights - The gaming industry is experiencing explosive content growth by 2025, making brand recognition a crucial factor for success beyond mere innovation [1][5] - Strong brand strategies create immersive experiences and emotional connections, transforming individual games into cultural phenomena with long-term commercial value [1][10] - Game naming and logo design are essential starting points for brand development, serving as the first touchpoints for players and conveying the game's world and tone [1][12][26] Brand Consistency - Maintaining brand consistency is key for successful game brands, ensuring that every aspect from pre-launch to post-launch aligns with the core game universe [2][29] - A strong brand strategy not only focuses on emotional engagement but also integrates gameplay mechanics, art style, narrative techniques, and character design to create a lasting appeal [9][35] Long-term Brand Operations - The core of long-term brand operations revolves around continuously delivering value centered on player experience and emotional recognition [3][35] - Top-tier game brands extend beyond the games themselves, creating cross-dimensional ecosystems through esports, film, and merchandise, becoming cultural symbols in daily life [4][38] Naming and Logo Design - A compelling game name is not just a label but an invitation that ignites player curiosity and defines the future of the IP [12][21] - Effective naming should consider three core dimensions: alignment with the game world, uniqueness, and the ability to spark curiosity [13][17][19] - A powerful logo serves as the first visual symbol of the brand, accurately conveying the game's world and tone [26][28] Marketing and Community Engagement - Pre-launch marketing should strategically build anticipation, deepening emotional investment from players even before the game is released [30] - Post-launch, brands must shift focus to long-term operations, fostering emotional connections and maintaining engagement through community interaction and social media [32][36] Cultural Integration - Successful game brands integrate into culture and daily life, expanding their reach through esports, film adaptations, and merchandise, thus enhancing emotional ties with players [41][42] - The most successful brands evolve beyond gaming, becoming cultural symbols that reshape the entertainment landscape and continuously attract user engagement [42]

Investment Rating - The investment rating for Tencent Holdings is "Buy" [7] Core Insights - The company's gaming business is expected to grow robustly driven by a new product cycle, while the video account advertising business remains highly prosperous, likely becoming a major source of revenue growth [1][2] - In Q3 2025, Tencent's online gaming revenue (excluding social) reached 636 billion yuan, a year-on-year increase of 23%. Domestic market revenue was 428 billion yuan, up 15%, exceeding Bloomberg's consensus estimate of 423 billion yuan, primarily due to the contribution from "Delta Operation" and continued revenue growth from existing games [1] - International market revenue was 208 billion yuan, a 43% year-on-year increase, surpassing Bloomberg's consensus estimate of 181 billion yuan, driven by record highs in daily active users and revenue for "Clash Royale" and growth from "PUBG: MOBILE" [1] - The introduction of a 15% commission agreement between Apple and Tencent regarding WeChat mini-game payments is expected to open up payment opportunities in the long term, despite short-term challenges in commission avoidance methods [3] - The company's marketing services revenue in Q3 2025 was 362 billion yuan, a 20.8% year-on-year increase, driven by improvements in eCPM and expansion of advertising inventory [4] Financial Forecasts - Projected revenues for Tencent from 2025 to 2027 are 748.76 billion yuan, 835.25 billion yuan, and 921.90 billion yuan, with year-on-year growth rates of 13%, 12%, and 10% respectively [5] - Adjusted net profits for the same period are forecasted to be 266.16 billion yuan, 293.21 billion yuan, and 321.51 billion yuan, with growth rates of 20%, 10%, and 10% respectively [5] - The valuation method applied suggests a target price of 794.73 HKD per share for 2026, indicating a potential upside of 30% [5]

Core Insights - The company achieved a revenue of 192.9 billion yuan in Q3 2025, representing a year-on-year increase of 15% and a quarter-on-quarter increase of 5% [1] - The net profit attributable to shareholders reached 63.1 billion yuan, up 19% year-on-year and 13% quarter-on-quarter [1] - The company maintains a "Buy" rating, projecting net profits of 226.4 billion, 256.2 billion, and 288.7 billion yuan for 2025-2027 [1] Revenue Breakdown - Value-added services revenue was 95.9 billion yuan, a 16% year-on-year increase, with domestic game revenue at 42.8 billion yuan (up 15%) and overseas game revenue at 20.8 billion yuan (up 43%) [1] - Social network revenue was 32.3 billion yuan, reflecting a 5% year-on-year growth [1] - Marketing services revenue increased to 36.2 billion yuan, up 21% year-on-year, driven by higher user engagement and improved ad loading rates [1] - Financial technology services revenue reached 58.2 billion yuan, a 10% year-on-year increase, primarily from commercial payment and consumer loan services [1] Profitability - The gross margin improved by 3 percentage points year-on-year to 56%, with value-added, marketing, and financial technology services showing respective increases of 4, 4, and 2 percentage points [1] AI and Technology Integration - Continuous iteration of AI technology is expected to enhance advertising and e-commerce businesses, with the company's mixed Yuan image generation model ranking first globally as of November 12 [1] - New intelligent advertising products are designed to optimize marketing ROI and expand the business for small and medium advertisers [1] - AI is enhancing product recommendation capabilities, contributing to increased transaction volumes in WeChat stores [1] Gaming Performance - New games are performing well, with "Delta Force" ranking among the top three in industry revenue for Q3, and "Valorant" mobile version achieving over 50 million monthly active users [1] - Established games like "Honor of Kings" are projected to reach 139 million daily active users by 2025, with "Clash Royale" achieving record highs in daily active users and revenue in September [1] - Upcoming major IP derivative games are expected to drive further business growth [1]