Core Insights - The article discusses the unexpected launch of the new AI game "Whispers from the Star" by Anuttacon, founded by miHoYo's co-founder Cai Haoyu, highlighting the rapid development and the mixed reactions from fans [2][4][6] - Cai Haoyu's approach to game development is heavily influenced by AI, suggesting a shift in the industry where only a small percentage of "geniuses" will create groundbreaking content, while the majority may become hobbyists [2][4] - The game has sparked debates among fans regarding its playability and complexity, with some expressing confusion over its mechanics and narrative [2][4][6] Development and Team Structure - Anuttacon's team is notably small, consisting of only Cai Haoyu and one other planner, which emphasizes the rapid development pace and the potential of AI in game creation [2][4] - Internal discussions suggest that the game serves as a "signpost" for what AI can achieve in gaming, rather than being a fully polished product [6][24] - The company aims to develop a game engine that could allow developers to create interactive NPCs based on simple input conditions, showcasing the ambition behind the AI technology [6][24] Fan Reactions and Community Engagement - Fans have shown a strong interest in analyzing the game and speculating on Cai Haoyu's intentions, indicating a deep engagement with the content and the creator [4][6] - The community's response has been mixed, with some praising the innovative ideas while others criticize the game's playability [2][4][6] - Cai Haoyu's absence from public view has led to speculation about his relationship with miHoYo and his future plans, with fans expressing a desire for his return [8][28][31] Historical Context and Company Evolution - Cai Haoyu's journey from a "child prodigy" to a successful game developer is highlighted, showcasing his early achievements and the founding of miHoYo [11][12][20] - The article details the challenges faced by miHoYo, including the termination of a major project and the subsequent leadership transition to Liu Wei, raising questions about the company's direction [7][28] - The establishment of Anuttacon is seen as a new chapter for Cai Haoyu, allowing him to pursue his vision of creating a more immersive virtual world [8][28][30] Future Prospects and Industry Impact - The article suggests that the gaming industry may be on the brink of a transformation driven by AI, with Anuttacon's developments potentially setting new standards [6][30] - There is speculation about the future of game development, with AI possibly replacing traditional game engines and enabling personalized gaming experiences [30] - The ongoing evolution of miHoYo under Liu Wei's leadership is contrasted with Cai Haoyu's innovative approach, indicating a potential divergence in company culture and vision [28][29]

Investment Rating - The report maintains a "Buy" rating for the media industry, highlighting potential growth driven by AI applications and digital marketing innovations [4][8]. Core Insights - The media sector is experiencing significant growth, with a 61.5% increase over the past 12 months, outperforming the Shanghai and Shenzhen 300 index, which saw a 25.6% increase [2]. - AI applications are expected to continue driving growth in the media sector, particularly in digital advertising and content creation, with companies like BlueX and DeepSeek leading the charge [3][14]. - The report emphasizes the importance of the second half of the year for companies' core business operations, following the release of interim results [3]. Summary by Sections 1. Media Industry Review - The media sector has shown strong performance, with notable stock movements among companies like Jishi Media and Yuedu Group, which saw increases of 45.19% and 21.57% respectively [13]. - The overall market sentiment remains positive, with a focus on AI's role in reshaping digital marketing strategies [14]. 2. Key Recommended Stocks and Logic - The report recommends several stocks within the media sector, including: - BlueX (300058) for its innovative advertising model similar to AppLovin's Axon 2.0 [4]. - Mango Super Media (300413) for its new AI initiatives and diverse content offerings [4]. - Other notable mentions include Tianzhou Culture (300148) and Wanda Film (002739), both expected to benefit from ongoing digital transformations [4]. 3. Industry Dynamics - The gaming sector is thriving, with Tencent reporting a 17% increase in domestic game revenue and a 35% increase in international revenue [17]. - The film market is also recovering, with the summer box office surpassing 90 billion yuan, indicating strong consumer interest and a diverse slate of films [27][28]. 4. AI Applications in Media - AI is transforming digital marketing, with companies like AppLovin and BlueX leveraging AI to enhance advertising efficiency and effectiveness [14]. - The report highlights the potential for AI to drive user engagement and content creation across various platforms, including Bilibili and Meitu [15][16]. 5. Company Performance and Forecasts - The report provides earnings forecasts for key companies, with many expected to see significant growth in EPS and PE ratios over the next few years [8]. - Companies like Huace Film (300133) and Mango Super Media (300413) are projected to achieve substantial increases in earnings per share, reflecting their strong market positions and innovative strategies [8].

Core Viewpoint - The article discusses the contrasting approaches of Mihayou and Anuttacon in the realm of AI-driven gaming, highlighting the innovative direction of Anuttacon's game "Whispers from the Star" and Mihayou's focus on enhancing existing content production through AI integration [1][17]. Group 1: Anuttacon and "Whispers from the Star" - Anuttacon, founded by Mihayou's creator Cai Haoyu, released a demo for "Whispers from the Star" on July 22, which emphasizes real-time interaction with an AI character named Stella, rather than traditional gameplay mechanics [1][6]. - The game allows players to engage with Stella through voice, text, or video, creating a unique immersive experience that focuses on emotional connection rather than structured gameplay [10][8]. - The demo operates on a cloud gaming model, incurring high operational costs, yet aims to establish a genuine relationship between players and AI [2][10]. Group 2: Mihayou's Strategy - Mihayou has established new companies focused on AI and digital content, developing a large model named Glossa to enhance its existing game production processes rather than reinventing the gaming experience [2][19]. - The company aims to create an "AI-driven content industrial system," improving efficiency and controllability in game production through automation and model integration [19][17]. - Mihayou's approach contrasts with Anuttacon's, as it seeks to optimize existing structures rather than create entirely new player experiences [20][21]. Group 3: Potential Conflicts and Future Directions - The differing philosophies of Anuttacon and Mihayou may lead to future conflicts in market positioning, technology, and values as both companies pursue their respective visions of AI in gaming [4][22]. - While currently maintaining a technical collaboration, the competitive landscape may shift as Anuttacon seeks commercialization and expansion into markets like China and Asia [24][22]. - The ultimate competition lies in who can establish a new gaming paradigm that resonates with users and sets industry standards, indicating that the current state of coexistence may be temporary [24][17].

Market Overview - US stock indices experienced fluctuations, with the Dow Jones down 0.22%, Nasdaq up 0.32%, and S&P 500 up 0.01. The VIX index fell 0.45% to 17.61. The US dollar index decreased by 0.45% to 98.82. The yield on the 10-year US Treasury bond dropped by 2.244% to 4.356%, with a spread of 48.7 basis points compared to the 2-year bond yield. Spot gold rose by 0.56% to $3,372.18 per ounce, while Brent crude oil fell by 1.11% to $64.84 [1]. Industry & Stocks - In the industry sector, apart from energy, utilities, and consumer staples which fell by 1.95%, 1.75%, and 0.7% respectively, the other seven sectors of the S&P 500 saw gains: semiconductors up 1.49%, communications up 0.64%, materials up 0.38%, real estate up 0.31%, healthcare up 0.2%, technology up 0.15%, and industrials up 0.06 [1]. - Chinese concept stocks mostly rose, with KWEB up 2.48%, TSMC up 2.42%, Alibaba up 3.9%, Pinduoduo up 1.34%, JD.com up 2.84%, Li Auto down 0.17%, Xpeng up 3.77%, Futu up 6.93%, and NIO up 6.23 [1]. Focus of the Day - STMicroelectronics CEO Jean-Marc Chery indicated signs of market recovery, expecting increased demand that could boost performance in upcoming quarters. The company anticipates achieving the midpoint of its revenue forecast for Q2, which is $2.71 billion [3]. - Broadcom announced the shipment of its latest data center switch chip, Tomahawk 6, which boasts an Ethernet switching capacity of 102.4 terabits per second, double that of any current market Ethernet switch bandwidth. This chip is designed for data centers running AI processor clusters [5]. - The German government approved a tax relief plan worth €46 billion aimed at stimulating economic growth, which includes favorable depreciation options for businesses [6]. - India formally challenged the US over increased auto tariffs at the WTO, indicating a tougher trade stance despite ongoing negotiations for a temporary agreement [7]. Tesla Sales Data - Tesla's wholesale sales in China for May reached 61,662 units, a year-on-year decline of 15%. In Europe, sales plummeted, with UK sales down 45.8% to 1,758 units and German sales down 36.2% to 1,210 units [9]. - Cathie Wood's Ark Invest reduced its Tesla holdings by approximately 50,000 shares, realizing about $17 million, despite previously projecting a price target of $2,600 for Tesla [9]. Cryptocurrency Insights - Coinbase CEO Brian Armstrong warned that if the US fails to manage its debt effectively, Bitcoin could potentially replace the dollar as the new reserve currency. This sentiment is echoed by the Winklevoss twins, who advocate for Bitcoin investment amid rising US debt concerns [10]. Market Trends - Bubble Mart has emerged as the first tenfold stock in the "Guzi economy," with its share price soaring from HKD 19.8 to a peak of HKD 233.2, marking a cumulative increase of over 10 times and a market capitalization exceeding HKD 300 billion [10].