Financial Data and Key Metrics Changes - Total annual net revenue for 2025 reached CNY 112.6 billion, representing a 10% increase year-over-year [27] - Fourth quarter total revenues were CNY 27.5 billion, with net revenues from games and related services at CNY 92.1 billion, up 10% from 2024 [27][28] - Gross profit margin for the full year was 64.3%, with a fourth quarter gross profit margin of 64.2%, up from 60.8% year-over-year [30][31] Business Line Data and Key Metrics Changes - Net revenues from online games for the full year were CNY 89.6 billion, up 11% from 2024, with fourth quarter revenues increasing 4% year-over-year to CNY 21.3 billion [28] - Youdao's net revenues increased approximately 5% year-over-year to CNY 5.9 billion, with fourth quarter revenues rising 17% year-over-year to CNY 1.6 billion [28] - NetEase Cloud Music's full year revenue decreased 2% to CNY 7.8 billion, but fourth quarter revenues increased 5% year-over-year to CNY 2 billion [29] Market Data and Key Metrics Changes - Where Winds Meet surpassed 80 million accumulated players and ranked number 2 on Steam's global top-seller chart [17] - Justice expanded internationally, topping download charts in multiple key Asian regions [18] - Marvel Rivals was recognized as one of TIME's Best Video Games of 2025 and ranked in Steam's Platinum Tier of Best of 2025 [19] Company Strategy and Development Direction - The company is focused on integrating AI into game development processes, enhancing productivity and player engagement [15][26] - There is a strong emphasis on global expansion and cultural resonance in game content, as seen with Where Winds Meet [17] - The company aims to leverage AI to create new interactive experiences and improve game development efficiency [15][26] Management's Comments on Operating Environment and Future Outlook - Management believes AI will fundamentally empower creators and reshape interactive entertainment [16] - The company is optimistic about the future, viewing 2025 as a critical year for AI integration and innovation [15][16] - Management acknowledges the challenges posed by AI but sees opportunities for enhanced creativity and player experiences [40][41] Other Important Information - The company has a strong cash position with net cash of approximately CNY 163.5 billion at year-end [34] - A dividend of $0.232 per share has been approved, and a $5 billion share repurchase program is ongoing [34] Q&A Session Summary Question: Impact of AI on the online gaming industry - Management believes the market has misinterpreted AI's impact, stating that while AI lowers entry barriers, it raises the success threshold for top-tier games [36][37] Question: Retention rate of overseas users for Where Winds Meet - The game has received positive feedback and high retention rates due to its immersive gameplay and continuous updates [44][45] Question: Plans for the Unlimited Server model in other titles - The company plans to replicate the Unlimited Server model across more titles, focusing on restoring classic gameplay while optimizing the gaming process [48][49] Question: Development status of Sea of Dawn - Development is on track for a Q3 launch, with positive feedback from recent testing [51][53] Question: Strategy for entering the auto chess market - The company aims to differentiate its auto chess titles by incorporating unique cultural elements and strong narrative [55][57]

Financial Data and Key Metrics Changes - Total annual net revenue for 2025 reached CNY 112.6 billion, representing a 10% increase year-over-year [28] - For Q4 2025, total revenues were CNY 27.5 billion, with net revenues from games and related services at CNY 92.1 billion, up 10% from 2024 [29] - Gross profit margin for the full year was 64.3%, with Q4 margin increasing to 64.2% from 60.8% year-over-year [32] Business Line Data and Key Metrics Changes - Net revenues from online games for 2025 were CNY 89.6 billion, up 11% from 2024, with Q4 revenues increasing 4% year-over-year to CNY 21.3 billion [29] - Youdao's net revenues increased approximately 5% year-over-year to CNY 5.9 billion, with Q4 revenues rising 17% year-over-year to CNY 1.6 billion [30] - NetEase Cloud Music's full-year revenue decreased 2% to CNY 7.8 billion, but Q4 revenues increased 5% year-over-year to CNY 2 billion [31] Market Data and Key Metrics Changes - "Where Winds Meet" surpassed 80 million accumulated players and ranked number 2 on Steam's global top-seller chart [19] - "Justice" expanded internationally, topping download charts in multiple key Asian regions [20] - "Marvel Rivals" was recognized as one of TIME's Best Video Games of 2025 and ranked in Steam's Platinum Tier of Best of 2025 [20] Company Strategy and Development Direction - The company is focused on integrating AI into game development processes, enhancing productivity and player engagement [27] - Plans to explore new frontiers in AI-native gameplay, aiming to dynamically construct in-game worlds tailored to individual player behaviors [17] - The company aims to maintain high-intensity investments in AI-native gameplay and talent nurturing to expand advantages in game development [44] Management Comments on Operating Environment and Future Outlook - Management believes AI will fundamentally empower creators and reshape interactive entertainment, marking a paradigm shift in the industry [18] - The company is optimistic about the future, viewing 2025 as a critical year for AI integration and innovation [17] - Management acknowledges the challenges posed by AI but emphasizes the importance of integrating AI technology with complex game systems [40] Other Important Information - The effective tax rate was 14.8% for the full year and 16.4% for Q4 [34] - The company approved a dividend of $0.232 per share or $1.16 per ADS [35] - The current share repurchase program has seen approximately 22.1 million ADS repurchased for a total cost of about $2 billion [36] Q&A Session Summary Question: Impact of AI on the online gaming industry - Management believes the market has misinterpreted AI's impact, stating that while AI lowers entry barriers, it raises the success threshold for top-tier games [39] Question: Retention rate of overseas users for "Where Winds Meet" - The game has received widespread acclaim for its immersive experience and operational focus on free-to-play and high-frequency updates [47] Question: Replication of the Unlimited Server model across other titles - Management confirmed plans to introduce updates across more titles, maintaining close interaction with the player community [51] Question: Current development status of "Sea of Dawn" - Development is on track for a Q3 launch, with positive feedback from recent testing [55] Question: Strategy for entering the auto chess market - The company aims to differentiate its auto chess titles by incorporating unique cultural elements and strong narrative potential [59] Question: Global expansion strategies and talent development - Management emphasized the importance of cultivating top-tier creative minds in China to deliver premium games for global markets [63]

The Italian Competition Authority (AGCM) launched two investigations into the Microsoft-owned gaming company Activision Blizzard, alleging that it engaged in “misleading and aggressive practices.”By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions .Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — ...

Core Viewpoint - Italy has initiated two investigations into Microsoft's Activision Blizzard, accusing the company of "misleading and aggressive" sales practices related to its mobile games Diablo Immortal and Call of Duty Mobile [1][2]. Group 1: Investigations and Allegations - The Autorita Garante della Concorrenza E Del Mercato (AGCM) is investigating the use of design elements in the games that may lead users, especially children, to engage in prolonged play and make in-game purchases [2][6]. - The AGCM's statement indicates that these practices could mislead players regarding the actual value of virtual currency and encourage excessive spending, sometimes beyond what is necessary for game progression [3][4]. Group 2: Game Features and Monetization - Diablo Immortal and Call of Duty Mobile are marketed as free-to-play but include in-game purchases, which is a common monetization strategy for such games [4]. - In-game purchases in Diablo Immortal can reach up to $200, allowing players to buy cosmetics and currency to enhance their gaming experience [4][5]. Group 3: Parental Controls and Privacy Concerns - The AGCM is also examining the parental control features of the games, noting that default settings permit minors to make in-game purchases and play for extended periods without restrictions [6]. - Privacy issues have been raised, as the games seem to encourage users to select all consent options during sign-up, prompting an investigation into the company's data consent processes [6][7].