2026-02-11 13:02Financial Data and Key Metrics Changes - Total annual net revenue for 2025 reached RMB 112.6 billion, representing a 10% increase year-over-year [27] - Fourth quarter total revenues were RMB 27.5 billion, with net revenues from games and related value-added services at RMB 92.1 billion, up 10% from 2024 [27][28] - Gross profit margin for the full year was 64.3%, with the fourth quarter margin increasing to 64.2% from 60.8% year-over-year [30][31] - Non-GAAP net income attributable to shareholders for the fourth quarter totaled RMB 7.1 billion, down 27% year-over-year, while for the full year it was up 11% to RMB 37.3 billion [33][34] Business Line Data and Key Metrics Changes - Online games net revenues for the full year were RMB 89.6 billion, up 11% from 2024, with fourth quarter revenues increasing 4% year-over-year to RMB 21.3 billion [27][28] - Youdao's net revenues increased approximately 5% year-over-year to RMB 5.9 billion, with fourth quarter revenues rising 17% year-over-year to RMB 1.6 billion [28] - NetEase Cloud Music net revenue decreased 2% year-over-year to RMB 7.8 billion for the full year, but fourth quarter revenues increased 5% year-over-year to RMB 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, demonstrating strong global traction [17] - Justice expanded internationally, topping download charts in multiple key Asian regions, showcasing the effectiveness of AI-integrated production pipelines [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, indicating strong global momentum [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 commitment to exploring new frontiers in AI-native gameplay, aiming to dynamically construct in-game worlds tailored to individual player behaviors [15] - The strategy includes maintaining high-intensity investments in AI-native gameplay and nurturing talent to leverage AI technology for high-quality game development [42] Management's Comments on Operating Environment and Future Outlook - Management believes that AI will fundamentally empower creators and reshape interactive entertainment, marking a critical point in the industry's evolution [16][26] - The company is optimistic about the future, viewing the current period as the best time for the industry, with a strong focus on technological advancement and creative innovation [16] - Management acknowledges the challenges posed by AI in terms of integration and control but sees it as an opportunity for excellent teams to innovate [40] Other Important Information - The company has a strong cash position, with net cash of approximately RMB 163.5 billion at year-end, and a dividend of $0.232 per share was approved [34] - The share repurchase program has seen approximately 22.1 million ADS repurchased for a total cost of about $2 billion [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 [37][38] Question: Retention rate and performance of Where Winds Meet - The game has received positive feedback and high retention rates due to its immersive gameplay and continuous updates [45] Question: Future of Marvel Rivals and AI in gameplay design - Marvel Rivals remains stable with ongoing innovative content, while AI is seen as a transformative asset for player experiences [66]