Q2 2025 NetEase Inc Earnings Call

Speaker #1: Good day, and welcome to the NetEase second quarter 2025 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brandi Piacente.

Operator: Good day and welcome to the NetEase second quarter 2025 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brandi Piacente. Please go ahead.

Speaker #1: Please go ahead.

Speaker #2: Thank you, operator. Please note that today's discussion will contain forward-looking statements relating to the future performance of the company and our intended to qualify for the safe harbor from liability as established by the US Private Securities Litigation Reform Act.

Brandi Piacente: Thank you, operator. Please note that today's discussion will contain forward-looking statements relating to the future performance of the company and are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect NetEase's business and financial results is included in certain filings of the company with the Securities and Exchange Commission, including its annual report on Form 20-F and in announcements and filings on the Hong Kong Stock Exchange's website.

Speaker #2: Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion.

Speaker #2: A general discussion of the risk factors that could affect NetEase's business and financial results is included in certain filings of the company with the Securities and Exchange Commission, including its annual report on Form 20-F and in announcements and filings on the Hong Kong Stock Exchange's website.

Speaker #2: The company does not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only.

Brandi Piacente: The company does not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the 2025 second quarter earnings news release issued earlier today. As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the NetEase corporate website at ir.netease.com. Joining us today on the call from NetEase's senior management are Mr. William Ding, Chief Executive Officer, and Mr. Bill Pang, Vice President of Corporate Development. I will now turn the call over to Bill, who will read the prepared remarks on William's behalf. Bill?

Speaker #2: For a definition of non-GAAP financial measures in a reconciliation of GAAP to non-GAAP financial results, please see the 2025 second quarter earnings news release issued earlier today.

Speaker #2: As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the NetEase corporate website at ir.netease.com.

Speaker #2: Joining us today on the call from NetEase's senior management are Mr. William Ding, Chief Executive Officer, and Mr. Bill Pang, Vice President of Corporate Development.

Speaker #2: I will now turn the call over to Bill, who will read the prepared remarks on William's behalf. Bill?

Speaker #3: Thank you, Brandi. And thank you, everyone, for participating in today's call. Before we begin, I would like to remind everyone that all percentages are based on R&B.

Bill Pang: Thank you, Brandi, and thank you, everyone, for participating in today's call. Before we begin, I would like to remind everyone that all percentages are based on R&D. During the second quarter, we advanced each of our businesses through the development of high-quality and innovative offerings. Total revenues increased 9% year over year, driven by our diverse portfolio of games. We saw strong player engagement in our established franchises and released new titles that expanded our reach across genres and geographies. Building on our first quarter year-on-year growth momentum, revenue from our games and related VAF rose 14% in the second quarter compared to the same year last year. As we expand our expertise across more genres, we now offer a diverse range of gaming experiences to players around the world, which we believe lays a solid foundation for our global expansion.

Speaker #3: During the second quarter, we advanced each of our businesses through the development of high-quality and innovative offerings. Total revenues increased nine percent year over year, driven by our diverse portfolio of games.

Speaker #3: We saw strong player engagement in our established franchises, and released new titles that expanded our reach across genres and geographies. Building on our first quarter year-on-year growth momentum, revenue from our games and related VAS rose fourteen percent in the second quarter, compared to the same year last year.

Speaker #3: As we extend our expertise across more genres, we now offer a diverse range of gaming experiences to players around the world, which we believe lays a solid foundation for our global expansion.

Speaker #3: In the second quarter, we launched several new global titles while also extending the reach of our well-known domestic franchises. Looking first at our newest releases, our superhero team-based tactical RPG, Marvel Mystery Mayhem, launched on June 25.

Bill Pang: In the second quarter, we launched several new global titles while also extending the reach of our well-known domestic franchises. Looking first at our newest releases, our superhero team-based tactical RPG, Marvel: Mystery Mayhem, launched on June 25. The game quickly garnered a passionate group of players eager to collect iconic superheroes and supervillains to battle the nightmare dimension. Its player base quickly surpassed 1 million, with the game topping the iOS download charts in multiple regions and ranking number two in the U.S. To further the community's excitement, we plan to introduce more playable characters and expand the storyline approximately every six weeks. The global release of our tactical shooter game, FragPunk, on Xbox and PlayStation quickly gained traction after its April 29 debut. In May, it reached the number two spot on PlayStation's North America free-to-play download chart.

Speaker #3: Game quickly garnered a passionate group of players eager to collect iconic superheroes and supervillains to battle the nightmare dimension. Its player base quickly surpassed one million.

Speaker #3: With the game topping the iOS download chart in multiple regions, and ranking number two in the US. To further the community's excitement, we plan to introduce more playable characters and expand the storyline approximately every six weeks.

Speaker #3: The global release of our tactical shooter game, Frank Punk, on Xbox and PlayStation quickly gained traction after its April 29th debut. In May, it reached number two spot on PlayStation's North America free-to-play download chart.

Speaker #3: Originally launched on PC in March, Frank Punk has been winning over players with his groundbreaking shortcard system. Now, with the signature blend of strategy and high-octane shooting experience available on console, it continues to build momentum.

Bill Pang: Originally launched on PC in March, FragPunk has been winning over players with its groundbreaking shortcut system. Now, with the signature blend of strategy and high-octane shooting experience available on console, it continues to build momentum. Our commitment to growing existing hits has also brought fresh energy to games already resonating with players. Once Human, commemorated its annual version 2.0, "Shooting Bill," with a major content update and a series of exciting announcements. Players were introduced to "Endless Dream," a new nightmare-themed PvE scenario that takes them through multiple layers of dreamscapes, offering a fresh take on the apocalyptic world. A new class system was also unveiled, featuring three classes: Chef, Gardener, and Beastmaster as the first play, each bringing unique abilities to support diverse play styles. This 2.0 update gained massive popularity, propelling the game to number four on Steam's global top seller chart.

Speaker #3: Our commitment to growing existing hits has also brought fresh energy to games already resonating with players. Once human, commemorated its annual version 2.0, Dreamveil, with a major content update and a series of exciting announcements.

Speaker #3: Players were introduced to end-of-the-screen, a new nightmare scene the PvE scenario that takes them through multiple layers of dreamscapes. Offering a fresh take on the apocalyptic world.

Speaker #3: A new cloud system was also unveiled, featuring three classes: Chef, Gunner, and Beastmaster as the first grade. Each bringing unique abilities to support diverse play styles.

Speaker #3: This 2.0 update gained massive popularity, propelling the game to number four on Steam's global top seller chart. We also rolled out a new PvP spin-off of Once Human on July 30th, called RayZone.

Bill Pang: We also rolled out a new PvP spin-off of Once Human on July 30th, called "Ray Zone," which amplifies the thrill of the game's survival open-world experience. With unrestricted combat allowing attacks anytime, anywhere, this innovation targets a broader PvP audience through more intense and liberated battles. In June, we began testing a new customer server, allowing private servers and customizable seasonal settings that encourage creativity and diversity, giving players even more autonomy. For Marvel Rivals, we launched Season 3 on July 11th, introducing Phoenix as a new playable hero alongside a slate of exciting events and team maps. Setting Clingtown, where now darkness spreads, players join forces and unleash unique skills to save the world. With fast-paced open combat and the fan-favorite Phoenix joining the roster, the game quickly climbed to number one on Steam's top seller chart in the U.S.

Speaker #3: Which amplifies the thrill of the game's survival open-world experience. With unrestricted combat allowing attacks anytime, anywhere, this innovation targets on broader PvP audiences through more intense and liberated battles.

Speaker #3: In June, we began testing a new customer server, allowing private servers and a customizable seasonal settings that encourage creativity and diversity. Giving players even more autonomy.

Speaker #3: For Marvel Rivals, we launched Season 3 on July 11th, introducing Phoenix as a new playable hero alongside a slate of exciting events and team-ups.

Speaker #3: Setting Klington, we're now starting a spread, players joining forces and unleashing unique skills to save the world. With fast-paced open combat and a fan-favorite Phoenix joining the roster, the game quickly climbed to number one on Steam's top seller chart in the US, and subsequently reached number two globally following their summer party events.

Bill Pang: and subsequently reached number two globally, following their summer party events. Beyond in-game updates, we're also deepening community engagement through more offline events, as San Diego Comic-Con, an exclusive behind-the-scenes look at the hero creation process, generated tremendous excitement among fans. In May, we also kicked off our Marvel Rivals Ignite eSports tournament, with mid-season finals successfully held at our Guangzhou campus recently. Passionate players from around the world have come to compete, and we look forward to crowning the first champion with our finals at the end of the year. With our domestic IP, we continue to extend our player communities and prepare for global expansion. Players of our Wuxia-themed open-world RPG, Where Winds Meet, continue to be impressed by our steady stream of high-quality content. In the second quarter, we launched a new Hershey-themed update, featuring the exotic desert landscape of Dunhuang.

Speaker #3: Beyond in-game updates, we're also deepening community engagement through more offline events. As San Diego Comic-Con, an exclusive behind-the-scenes look at the hero creation process generated tremendous excitement among fans.

Speaker #3: In May, we also kicked off our Marvel Rivals Ignite eSports tournament. With mid-season finals successfully held at our Guangzhou campus recently. Passionate players from around the world have come to compete.

Speaker #3: And we look forward to crowning the first champion with our finals at the end of the year. With our domestic IP, we continue to extend our player communities and prepare for global expansion.

Speaker #3: Players offer Wu Xiang themed open-world RPG, Where Wings Meet, continue to impress by our steady stream of high-quality content. In the second quarter, we launched a new He Xi themed update, featuring the exotic desert landscape of Dunhuang.

Speaker #3: The storyline centered on the unyielding spirit of both generals and ordinary citizens during the period of unrest resonated deeply with players. By restoring ancient frescoes in-game, in collaboration with the Dunhuang Art Academy, we brought emotional stories to life with stunning visual effects.

Bill Pang: The storyline, centered on the unyielding spirit of both generals and ordinary citizens during the period of unrest, resonated deeply with players. By restoring ancient frescoes in-game in collaboration with Dunhuang Art Academy, we brought emotional stories to life with stunning visual effects, further fueling player enthusiasm. By the end of July, it has amassed over 40 million total players, while the release of the summer version propelled it to number five on China's iOS top-grossing chart. Furthermore, we are thrilled to have successfully concluded the latest round of overseas testing on PC and PlayStation 5 at the end of July, placing us firmly on track for its global launch. Sword of Justice, previously known as Justice Mobile, marked its second anniversary with a surge in players.

Speaker #3: Further fueling player enthusiasm. By the end of July, it has amassed over forty million total players. While the release of the summer version propelled it to number five on China's iOS top-grossing chart.

Speaker #3: Furthermore, we're thrilled to have successfully concluded the latest round of overseas testing on PC and PlayStation 5 at the end of July, placing us firmly on track for its global launch.

Speaker #3: Sword of Justice, previously known as Justice Mobile, marked its second anniversary with a surge in players. We launched a massive update, introducing new gameplay features, expanded areas, and a wide selection of new costumes.

Bill Pang: We launched a massive update, introducing new gameplay features, expanded areas, and a wide selection of new costumes, propelling the title to number three on China's iOS top-grossing chart. Global pre-registration opened in May, and we look forward to bringing this groundbreaking MMORPG experience to more players worldwide. Dungeons and Dragons: Dynasty also met global players on May 22, where it reached number one on iOS download charts in multiple regions and number two in the U.S. As we enhance the global appeal of our games, our established franchises continue to keep players highly engaged, highlighting the strength of our operations and content updates that stand the test of time. In May, Fantasy Westward Journey Online drew in strong interest from the player community with its "How to Train Your Dragon" collaboration, bringing the movie's iconic costumes and dragon mounts into the game.

Speaker #3: Propelling the title to number three on China's iOS top-grossing chart. Global pre-registration opened in May, and we look forward to bringing this groundbreaking MMORPG experience to more players worldwide.

Speaker #3: Dung City Dynasty, also mapped global players, on May 22nd, where it reached number one on the iOS download chart in multiple regions and number two in the U.S.

Speaker #3: As we enhance the global appeal of our games, our established franchises continue to keep players highly engaged. Highlighting the strengths of our operations and content updates that stand the test of time.

Speaker #3: In May, Fantasy Westward Journey Online drew strong interest from the player community with its "How to Train Your Dragon" collaboration, bringing the movie's iconic costumes and dragon mounts into the game.

Speaker #3: The momentum continued with the launch of the innovative unlimited server in July. More notably, this evergreen title reached a new all-time high peak in concurrent players in August.

Bill Pang: The momentum continued with the launch of the innovative Unlimited server in July. More notably, this evergreen title reached a new all-time high peak in concurrent players in August, surpassing 2.93 million, an impressive milestone after 22 years of operations. Our long-term commitment to innovation and maintaining a healthy in-game ecosystem continues to pay off. Similarly, Fantasy Westward Journey Mobile launched a new faction, Pan Sutong, which generated strong participation and introduced a vertical screen mode to expand accessibility across play scenarios. Delivering fresh content and elevating player experiences remains central to the game's enduring success. Its revenue posted another record high in the second quarter.

Speaker #3: Surpassing two point ninety-three million. An impressive milestone after twenty-two years of operations. Our long-term commitment to innovation and maintaining a healthy in-game ecosystem continues to pay off.

Speaker #3: Similarly, Fantasy Westward Journey Mobile launched a new faction, Pan Zi Dong, which generated strong participation and introduced a vertical screen mode to expand accessibility across play scenarios.

Speaker #3: Delivering fresh content and elevating player experiences, remains central to the game's enduring success. Its revenue posted another record high in the second quarter. The Westward Journey franchise, struck at emotional core with players by launching a series of activities themed around the beloved romantic legend, Bai Xue Zhuang.

Bill Pang: The Fantasy Westward Journey franchise struck an emotional chord with players by launching a series of activities themed around the beloved romantic legend Bai Xue Duan, featuring themed gameplay, costumes, and crossovers with the theme song, all titled "2025 Year of Snake." Fantasy Westward Journey Online 2 continues to build excitement through its annual PvP finals and content updates, while Fantasy Westward Journey Mobile saw strong participation from both loyal and returning players through the launch of a new server. Knives Out continues to showcase our long-term operational capabilities, maintaining its status as a household game in Japan through dedicated content updates and culturally resonant collaborations.

Speaker #3: Featuring themed gameplay, costumes, and crossovers with the theme song, all tied to the 2025 Year of the Snake, Westward Journey Online 2 continues to fuel excitement through its annual PvP finals and content updates.

Speaker #3: While Westward Journey Mobile saw strong participation from both loyal and returning players, through the launch of a new server. Next up, continues to showcase our long-term operational capabilities.

Speaker #3: Maintaining its status as a household game in Japan through dedicated content updates and culturally resonant collaborations, this quarter's crossover with *Jujutsu Kaisen*, the hit Japanese manga, captivates global audiences.

Bill Pang: This quarter's crossover with Jujutsu Kaisen, the hit Japanese manga that captivates global audiences, was met with strong player enthusiasm and propelled the game to number three on Japan's iOS top-grossing chart. Identity V once again broke its quarterly revenue record in Q2, supported by an enthusiastic fan base. On July 3, Identity V teamed up with Paper Bride, a popular Chinese horror mystery puzzle game, to introduce a chilling wedding-themed world featuring immersive maps and new costumes. The crossover drove the game to number seven on China's iOS top-grossing chart. Momentum continued in August when the crossover with Frieren: Beyond Journey's End generated significant enthusiasm and propelled it to number four on China's iOS top-grossing chart. For Eggy Party's third anniversary on June 27, we introduced a festive in-game update that transformed Eggy Island with candies, cakes, and toys, adding new maps and equipment to deepen strategic gameplay.

Speaker #3: Was met with strong player enthusiasm and propelled the game to number three on Japan's iOS top-grossing chart. Identity V, once again, broke its quarterly revenue record in Q2.

Speaker #3: Supported by an enthusiastic fan base. On July 3rd, Identity Five teamed up with Paper Bride, a popular Chinese horror mystery puzzle game, to introduce a chilling wedding-themed world featuring immersive maps and new costumes.

Speaker #3: The crossover drove the game to number seven on China's iOS top-grossing chart. Momentum continued in August when the crossover with "Frieren: Beyond Journey's End" generated significant enthusiasm and propelled it to number four on China's iOS top-grossing chart.

Speaker #3: For the active parties' anniversary on June 27th, we introduced a festive in-game update that transformed Aki Island with candy, cakes, and toys. We also added new maps and equipment to deepen strategic gameplay.

Speaker #3: A wave of anniversary activities, along with the highly anticipated crossover with Dung Dung Shift, sparked strong player excitement and lifted active parties to number five on China's iOS top-grossing chart on July 11th.

Bill Pang: A wave of anniversary activities, along with the highly anticipated crossover with Dung Dung Ship, sparked strong player excitement and lifted Eggy Party to number five on China's iOS top-grossing chart on July 11. The Naraka Bladepoint franchise also hit another milestone. Its PC game entered its fourth year with a brand-new extraction mode and iconic IP crossovers, including Bruce Lee and the degenerated drone Jiang Hu. The mobile game also introduced enhancements to its extraction-based survival feature with dynamic weather and new mechanics. The update agonized the player base and pushed the title to number six on China's iOS top-grossing chart. After a year of close collaboration, Blizzard titles continue to captivate players in China. On July 15, World of Warcraft and its community celebrated the game's 20th anniversary of operation in China, unveiling plans to launch a China-exclusive Titan Reforged server in November.

Speaker #3: The Naraka: Bladepoint franchise has hit another milestone. Its PC game entered its fourth year with a brand new extraction mode and iconic IP crossovers, including Wu Si and the degenerated drawing Jiang Hu.

Speaker #3: The mobile game also introduced enhancements to its extraction-based survival feature, with dynamic weather and new mechanics. The update excited the player base and pushed the title to number six on China's iOS top-grossing chart.

Speaker #3: After a year of close collaboration, Blizzard titles continue to captivate players in China. On July 15th, World of Warcraft and its community celebrated the game's twentieth anniversary of operation in China.

Speaker #3: Unveiling plans to launch a China-exclusive Titan Reforged server in November, this announcement reignited enthusiasm among local players and attracted significant attention from broader global communities.

Bill Pang: This announcement reignited enthusiasm among local players and attracted significant attention from the broader global community. Meanwhile, Hearthstone launched its latest expansion, The Lost City of Angora, on July 9, featuring a brand-new quest system. This new adventure invites players to embark on the quest set for the Lost City, with 145 collectible cards and a new keyword, Kindred, to empower their decks. Shortly after the update, the game climbed to number five on China's iOS top-grossing chart. In April, Overwatch launched its new stadium mode, which has been very popular with players. In June, they introduced its 17th season, featuring a series of updates to power up the game experiences. At BBW 2025, its collaboration with Porsche sparked more fan excitement, featuring a special in-game skin of the iconic Porsche model.

Speaker #3: Meanwhile, Hearthstone launched its latest expansion, The Lost City of Angora, on July 9th, featuring a brand new path system. This new adventure invites players to embark on the quest set for The Lost City, with one hundred and forty-five collectible cards and a new keyword, Kindred, to empower their decks.

Speaker #3: Shortly after the update, the game climbed to number five on China's iOS top-grossing chart. In April, Overwatch launched its new stadium mode. Which has been very popular with players.

Speaker #3: And in June, they introduced its seventeenth season, featuring a series of updates to power up the game experiences. At Bilibili World 2025, its collaboration with Porsche sparked more fan excitement.

Speaker #3: Featuring a special in-game skin on the iconic Porsche model. We are also thrilled to announce that Diablo Resurrected, Diablo II Resurrected, will be returning to China on August 27th.

Bill Pang: We are also thrilled to announce that Diablo II: Resurrected will be returning to China on August 27, with plans for the launch of Diablo IV underway. This will enhance the classic franchise for a dedicated fan base. Innovation remains at the core of how we build and operate games. We bring the same creative ambition and operational rigor to every new title and development. Several exciting new games are in the pipeline, each powered by creative gameplay, bold designs, and cutting-edge technology. These titles reflect our commitment to pushing the boundaries of gaming experiences and will position us to expand our player community and further fuel our long-term growth. The Oblivion, our upcoming cross-platform open adventure RPG, received encouraging feedback from its first testing at the end of June.

Speaker #3: With plans for launch of Diablo IV underway. This will enhance the classic franchise for a dedicated fan base. Innovation remains at the core of how we build and operate games.

Speaker #3: We bring the same creative ambition and operational rigor to every new title under development. Several exciting new games are in the pipeline, each powered by creative gameplay, well-designed mechanics, and cutting-edge technology.

Speaker #3: This title reflects our commitment to pushing the boundaries of gaming experiences and will position us to expand our player community and further fuel our long-term growth.

Speaker #3: The advancements our upcoming cross-platform ocean adventure RPG received encouraging feedback from its first testing at the end of June. The game invites players into an exciting open-world exploration, where they uncover the truth behind the forgotten identity through exhilarating naval combat and turn-based battles.

Bill Pang: The game invites players into an exciting open-world exploration, where they uncover the truth behind a forgotten identity through exhilarating naval combat and turn-based battles. Players recruit a crew of allies, build ships, and interact with characters, adding strategic depth as players shape the fate of the surrounding world based on each decision they make. Currently, we're actively refining the game for its release in 2026. In June, we're excited to unveil plans for Blood Message, our first AAA single-player title. This cinematic, story-driven action-adventure will be available on PC and consoles, inviting players to step into the heart of Dunhuang's uprising as a nameless messenger and his young son. With immersive third-person gameplay and powered by cutting-edge technology, Blood Message is designed to deliver an epic blockbuster experience for players worldwide.

Speaker #3: Players recruit a crew of allies, build ships, and interact with characters, adding strategic depth as players shape the fate of the surrounding world based on each decision they make.

Speaker #3: Currently, we're actively refining the game for its release in 2026. In June, we're excited to unveil plans for Blood Message, our first AAA single-player title.

Speaker #3: This cinematic story-driven action-adventure will be available on PC and consoles. Inviting players to step into the heart of Dunhuang's uprising as a nameless messenger and his young son.

Speaker #3: With immersive third-person gameplay and powered by cutting-edge technology, Blood Message is designed to deliver an epic blockbuster experience for players worldwide. Plan it Party Time, our cross-platform game blending social simulation and party gameplay.

Bill Pang: Planet Party Time, our cross-platform game blending social simulation and party gameplay, has undergone a series of tests to further refine the experiences ahead of its official launch. Players can express their creativity on a cosmic journey where they can design, build, and cultivate their own planets, while enjoying over 120 exciting mini-games with friends. Destiny Rising, a new free-to-play mobile sci-fi RPG shooter that delivers players to a new alternative timeline of the Destiny universe, will launch on August 28 across mobile devices. In addition, we plan to launch several licensed titles in China. Most recently, on July 24, we launched SuperVive, an innovative competitive multiplayer game on PC that provides a unique blend of MOBA, Battle Royale, and hero shooter elements. We expect Wildgate, a PvP multiplayer shooter game that blends tactical ship-to-ship combat with fast-paced first-person action, to meet players in China later this year.

Speaker #3: Has undergone a series of tests to further refine the experiences ahead of its official launch. Players can express their creativity on a cosmic journey, where they can design, build, and cultivate their own planets while enjoying over 120 exciting minigames with friends.

Speaker #3: Dancing Rising, a new free-to-play mobile sci-fi RPG shooter that delivers players to a new alternative timeline of dancing universe. Will launch on August 28th, across mobile devices.

Speaker #3: In addition, we plan to launch several licensed titles in China. Most recently, on July 24th, we launched Supervised, an innovative competitive multiplayer game on PC that provides a unique blend of mobile, battle royale, and hero shooter elements.

Speaker #3: And we expect Wildgate, a PvP multiplayer shooter game that blends tactical ship-to-ship combat with fast-paced first-person action to meet players in China later this year.

Speaker #3: The development for Anatta, our highly anticipated urban-themed open-world title, is also well underway. Across our portfolio, we remain focused on building lasting success through continuous innovation and high-quality operations that keep our games relevant and exciting for players.

Bill Pang: The development for Annata, our highly anticipated urban-themed open-world title, is also well underway. Across our portfolio, we remain focused on building lasting success through continuous innovation and high-quality operations that keep our games relevant and exciting for players. From evergreen franchises that keep breaking records to bold new titles shaping the next generation of gameplay, we are committed to delivering distinctive experiences that players love. As we continue raising the bar of engagement and creativity, we're paving the way for long-term growth domestically and worldwide. Turning to our other businesses, in Q2, Youdao executed its AI-native strategy effectively across both its learning and advertising businesses, delivering its first second quarter operating profit. For learning services, Youdao Ling Shi continued to drive product innovation with our proprietary LLM, Confucius, while we continue to iterate other AI applications, such as Mr. T's AI Future, gaining increasing user traction.

Speaker #3: From evergreen franchises that keep breaking records, to bold new titles shaping the next generation of gameplay, we are committed to delivering distinctive experiences that players love.

Speaker #3: As we continue raising the bar of engagement and creativity, we're paving the way for long-term growth domestically and worldwide. Turning to our other businesses, in Q2, Yu Dao executed its AI-native strategy effectively across both its learning and advertising businesses.

Speaker #3: Delivering its first second quarter operating profit, for learning services, Yu Dao Lingshu continued to drive product innovation with our proprietary LLM. Confucius, while we continue to iterate other AI applications, such as Mr. T, AI tutor, gaining increasing user traction.

Speaker #3: In online marketing services, our newly launched AI advertisement placement optimizer and end-to-end AI-driven agentic solution cover demand analysts, strategy formation, data analytics, and iteration optimization.

Bill Pang: In online marketing services, our newly launched AI advertisement placement optimizer, an end-to-end AI-driven agentic solution covering demand analysis, strategy formation, data analytics, and iteration optimization, achieving capabilities that previously relied on human expertise. Leveraging our LLM, Confucius, we now offer comprehensive AI-empowered advertisement services, spanning creative ad production, placements, and post-campaign analysis. NetEase Cloud Music remains committed to driving quality development across its core music ecosystem. To build on our unique content offerings, we continue to expand our catalog of copyrighted content while strengthening our original music library. During the second quarter, we expanded collaborations with Korean music labels and renowned Chinese artists, while generating strong traction with several in-house tracks, such as Liao Nan. We also continue to innovate our product features and optimize our music-centric community to deliver even better music experiences for our users.

Speaker #3: Achieving capabilities that previously relied on human expertise. Leveraging our LLM Confucius, we now offer comprehensive AI-empowered advertisement services, spanning creative ad production, placements, and post-campaign analysis.

Speaker #3: NetEase Cloud Music remains committed to driving quality development across its core music ecosystem. To build on our unique content offerings, we continue to expand our catalog of copyrighted content while strengthening our original music library.

Speaker #3: During the second quarter, we expanded collaborations with Korean music labels and renowned Chinese artists. While generating strong traction with several in-house tracks, such as "Liao Nan."

Speaker #3: We also continue to innovate our product features and optimize our music-centric community to deliver even better music experiences for our users. For example, our innovative music playing feature, Magic Like Player, which is designed to recreate the immersive feel of live concerts.

Bill Pang: For example, our innovative music playing feature, Magic Lite Player, which is designed to recreate the immersive feel of a live concert, enhanced with landscape orientation support, received widespread acclaim from music lovers. We are constantly advancing our music-centric motivation and further expanding our subscriber base, resulting in healthy growth in subscription-based membership revenues. Turning to Yanxuan, we continue to maintain our leading position in key categories. For example, Yanxuan Home Scents, such as bathroom fragrances and car refreshers, have been widely recognized by consumers to create a solid market position with leading sales. Other iconic products, such as plant food, also maintain a stable market position. Across our NetEase family of businesses, we are focused on innovation and refining our product and content to deliver long-term value for our users and stakeholders.

Speaker #3: Enhanced with landscape orientation support, received a widespread acclaim from music lovers. We're constantly advancing our music-centric motivation and further expanding our subscriber base. Resulting in healthy growth in subscription-based membership revenues.

Speaker #3: Turning to Yanxuan, we continue to maintain our leading position in key categories. For example, Yanxuan Homesend, such as Bathroom Frequency and Car Refreshers, has been widely recognized by consumers.

Speaker #3: Securing a solid market position with leading sales, other iconic products, such as pet food, also maintain a stable market position. Across our NetEase family of businesses, we are focused on innovation and refining our product and content to deliver long-term value for our users and stakeholders.

Speaker #3: Looking ahead, we will continue to push the boundaries of player experiences, scaling original IP to build lasting franchises and growing alongside collaborative global partners to reinforce our position as a creator of high-impact, genre-defining games.

Bill Pang: Looking ahead, we will continue to push the boundaries of player experiences, scaling original IP to build lasting franchises, and growing alongside with collaborative global partners to reinforce our position as a creator of high-impact, genre-defining games. That concludes William's comments. I will now provide a brief review of our 2025 second quarter financial results. Given the limited time on today's call, I will be presenting abbreviated financial highlights. We encourage you to read through our press release issued earlier today for further details. As a reminder, all amounts are in RMB unless otherwise stated. Total net revenue for the second quarter was RMB 27.9 billion, or $3.9 billion U.S. dollars, representing a 9.4% increase year over year. Total net revenue from our games and related VAS was RMB 22.8 billion, up 14% year over year.

Speaker #3: That concludes William's comments. I will now provide a brief review of our Q2 2025 financial results. Given the limited time on today's call, I'll be presenting abbreviated financial highlights. We encourage you to read through our press release issued earlier today for further details.

Speaker #3: As a reminder, all amounts are in R&B unless otherwise stated. Total net revenue for the second quarter will R&B twenty-seven point nine billion. Or three point nine billion US dollars.

Speaker #3: Representing a nine point four percent increase year over year. Total net revenue from our games and related VAS will R&B twenty-two point eight billion.

Speaker #3: Up fourteen percent year-over-year. Specifically, net revenues from online games will be $22.1 billion. This represents a quarter-over-quarter decrease of six percent and a year-over-year increase of fifteen percent.

Bill Pang: Specifically, net revenues from online games was RMB 22.1 billion, a quarter-over-quarter decrease of 6%, and a year-over-year increase of 15%. The sequential decline was primarily attributable to decreased revenue following the Chinese New Year push, while the year-over-year growth was mainly driven by increased revenue contribution from newly launched titles, such as Where Winds Meet and Marvel Rivals, as well as established games like Identity V. Youdao's net revenue was RMB 1.4 billion, up 7% year over year and 9% quarter-over-quarter. This growth was primarily driven by the enhanced utilization of AI technology to boost our learning services and online marketing services. NetEase Cloud Music's net revenue was RMB 2 billion, up 6% from the previous quarter, while declining 4% from the same period last year. Notably, revenues from online music services maintained healthy development both quarter-over-quarter and year over year.

Speaker #3: The sequential decline was primarily attributable to decreased revenue following the Chinese New Year push. While the year-over-year growth was mainly driven by increased revenue contribution from newly launched titles such as Where Wings Meet and Marvel Rivals, as well as established games like Identity Five.

Speaker #3: Yu Dao's net revenue will R&B one point four billion. Up seven percent year over year and nine percent quarter-over-quarter. This growth was primarily driven by the enhanced utilization of AI technology to boost our learning services and online marketing services.

Speaker #3: NetEase Cloud Music net revenue will R&B two billion. Up six percent from previous quarter. While declining four percent from the same period last year.

Speaker #3: Notably, revenues from online music services maintained a healthy development both quarter over quarter and year over year. Net revenue from innovative businesses and others will be $1.7 billion.

Bill Pang: Net revenue from innovative businesses and others was RMB 1.7 billion, up 5% from the previous quarter, while declining 18% year over year. The quarter-over-quarter growth was primarily driven by Yanxuan, while the year-over-year decline was mainly due to decreased net revenue from Yanxuan advertising services and certain other businesses in this segment. Gross profit for the second quarter of 2025 was RMB 18.1 billion, up 13% year over year. This was primarily driven by increased net revenue from online games, as previously mentioned. This quarter, our total gross profit margin was 64.7%. Looking at our second quarter margin in more detail, gross profit margin was 70.2% for our games and related VAS, compared with 70% in the same period last year and 68.8% in the last quarter.

Speaker #3: Up five percent from previous quarter. While declining eighteen percent year over year. The quarter-over-quarter growth was primarily driven by Yanxuan. While the year-over-year decline was mainly due to decreased net revenue from Yanxuan advertising services, and certain other businesses in this segment.

Speaker #3: Gross profit for the second quarter of 2025 was RMB 18.1 billion, up 13% year over year. This was primarily driven by increased net revenue from online games, as previously mentioned.

Speaker #3: This quarter, our total gross profit margin was sixty-four point seven percent. Looking at our second quarter margin in more detail. Gross profit margin was seventy point two percent for our games and related VAS, compared with seventy percent in the same period last year, and sixty-eight point eight percent in the last quarter.

Speaker #3: The quarter-over-quarter improvement was mainly due to a higher proportion of net revenues from our self-developed game, which carried a higher margin than licensed games. Our gross profit margin for Yu Dao was 43%, compared with 48.2% in the same period last year.

Bill Pang: The quarter-over-quarter improvement was mainly from a higher proportion of net revenues from our self-developed games, which carry a higher margin than licensed games. Our gross profit margin for Youdao was 43.2%, compared with 48.2% in the same period last year. The decrease was mainly due to the increased revenue contribution from online marketing services with relatively lower gross profit margins. Gross profit margin for NetEase Cloud Music was 36.1% in the second quarter, versus 32.1% in the same period a year ago. The margin improvement primarily resulted from the strong monetization of our core online music business and the ongoing cost of optimization. For our innovative business and others, gross profit margin was 42.3%, compared with 34% in the second quarter of 2024. Total operating expenses for the second quarter were RMB 9 billion, or 32% of our net revenues.

Speaker #3: The decrease was mainly due to the increased revenue contribution from online marketing services, which has a relatively lower gross profit margin. The gross profit margin for NetEase Cloud Music was 36.1% in the second quarter.

Speaker #3: versus 32.1% in the same period a year ago. The margin improvement primarily resulted from strong monetization of our core online music business and ongoing cost optimization.

Speaker #3: For our innovative business and others, gross profit margin was forty-two point three percent, compared with thirty-four percent in the quarter of second quarter of 2024.

Speaker #3: Total operating expenses for the second quarter will R&B nine billion. Or thirty-two percent of our net revenues. Taking a closer look at our cost composition, our selling and marketing expenses as a percentage of total net revenue were twelve point eight percent, compared with thirteen point seven percent for the same period last year.

Bill Pang: Taking a closer look at our cost composition, our selling and marketing expenses as a percentage of total net revenue were 12.8%, compared with 13.7% for the same period last year, mainly due to increased revenue contribution from games and VAS over the past year. Our R&D expenses as a percentage of total net revenue remained stable year over year at 15.6% in the second quarter, compared with 15.2% for the last quarter. We remain committed to investing into content creation and product development. The effective tax rate was 14.7% for the second quarter. As a reminder, the effective tax rate is presented on an accrual basis, depending on applicable policies and our operations. Our non-GAAP net income attributable to shareholders for the second quarter totaled RMB 9.5 billion, or $1.3 billion U.S. dollars, up 22% year over year. Non-GAAP basic earnings per ADS for the quarter were $2.08 U.S.

Speaker #3: Mainly due to increased revenue contribution from games and VAS over the past year. Our R&D expenses as a percentage of total net revenue remained stable year over year at fifteen point six percent in the second quarter, compared with fifteen point two percent for the last quarter.

Speaker #3: We remain committed to investing into content creation and product development. The effective tax rate was fourteen point seven percent for the second quarter. As a reminder, the effective tax rate is presented on a quarter basis.

Speaker #3: Depending on operable policies and our operations. Our non-GAAP net income attributable to shareholders for the second quarter totaled R&B nine point five billion. Or one point three billion US dollars.

Speaker #3: Up twenty-two percent year over year. Non-GAAP basic earnings per ABS for the quarter was two dollars and eight cents US dollars, or forty-two cents US dollars per share.

Bill Pang: dollars, or $0.42 U.S. dollars per share. Additionally, our cash position remains robust, with net cash of approximately RMB 142.1 billion as of June 30, 2025, compared with RMB 137 billion at the end of last quarter. In accordance with our dividend policy, we are pleased to report that our board of directors has approved a dividend of $11.4 U.S. dollars per share, or $0.57 U.S. dollars per ADS. Lastly, under our current $5 billion U.S. dollar share repurchase program, which started in mid-January 2023, we had repurchased approximately 22.1 million ADS as of June 30, 2025, for a total cost of approximately $2 billion U.S. dollars. Thank you for your attention. We would now like to open the floor to your questions. Operator, please.

Speaker #3: Additionally, our cash position remains robust, with net cash of approximately R&B one hundred and forty-two point one billion, as of June thirtieth, 2025. Compared with R&B one hundred and thirty-seven billion at the end of last quarter.

Speaker #3: In accordance with our dividend policy, we are pleased to report that our board of directors has approved a dividend of eleven point four cents US dollars per share.

Speaker #3: Or fifty-seven cents US dollars per ABS. Lastly, under our current five billion US dollar share repurchase program, which started in mid-January of 2023, we had repurchased approximately twenty-two point one million ABS as of June thirtieth, 2025.

Speaker #3: For a total cost of approximately two billion US dollars. Thank you for your attention. We would now like to open the call to your questions.

Speaker #3: Operator, please.

Speaker #4: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two.

Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speaker phone, please pick up the handset to ask your question. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Please limit your questions to one at a time. If you wish to follow up questions, please rejoin the queue. Your first question comes from Yang Liu with Morgan Stanley.

Speaker #4: If you are on a speakerphone, please pick up the handset to ask your question. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

Speaker #4: Please limit your questions to one at a time. If you wish to follow up questions, please rejoin the queue. You are first question comes from Yang Liu with Morgan Stanley.

Speaker #5: 非常感谢提问的机会。那我这边有两个问题想请教一下。那第一个是从管理层看来, 呃, 言云十六生的商业化表现如何? 是依然处于, 呃, 早期的成, 呃, 成功的早期阶段呢, 还是已经达到预期, 或者说已经, 呃, 达到了这个高峰? 那第二个问题是关于, 呃, 七日世界的, 呃, 是什么推动了七日世界的, 呃, 收入明显反弹? 呃, 这个产品是否有潜力成为长青游戏? 那在中国和海外的用户, 还有收入分配情况是怎样的? 呃, let me translate my questions。呃, my first question is regarding the Where Wings Meet in terms of the monetization in, management view.

Bill Pang: Once Human 的, 那是什么推动了 Once Human 的收入明显反弹? 这个产品是否有潜力成为常青游戏? 那在中国和海外的用户, 还有收入分配情况是怎样的? Let me translate my questions. My first question is regarding the Where Winds Meet in terms of the monetization in a management field. Is it an early success, or is it meeting expectation, or is it already fully ramped up? My second question is regarding Once Human, what is driving the growth in rebound for this title? Does it have the good potential to become an evergreen game? What is the user or revenue split in China and overseas? Thank you.

Speaker #5: Is it as early success, or is it meeting expectation, or it's, already fully ramped up? and, my second question is regarding, once human, what drives the growth, growth in rebound for this title?

Speaker #5: Does it have the potential to become an evergreen game? And what is the user or revenue split in China and overseas? Thank you.

Speaker #6: 叶明, 十六生, 目前我们整体的数据表现很稳健。无论是在活跃用户以及商业化表现, 已经超过上线前的预期。啊, 目前产品长线表现也稳定。啊, 我们对它的长线发展, 啊, 呃, 呈现出, 呃, 非常积极的信心。叶明目前采用的商业模式是优质的内容加纯外观的商业模式。我们持续稳定地会释放优质的内容。加强在优质内容方面的开发。同时, 纯外观的付费不会影响我们游戏的成长。这也使得叶明可以更有, 可以更健康的长线的增长。我们在未来的一言云的内容开发方面, 网易还是会持续更加大的投入。第二个问题是关于七日世界的收入反弹。七日世界在七月初, 我们做了一个二点零的版本更新。新的剧本无尽长梦和全新的职业系统受到了玩家的好评。我们这次二点零的更新有较高的人气, 使得此游戏在Steam上全球畅销榜排名第四。同时, 我们在七月三十号推出了禁区模式的PvP剧本。给玩家无规则限制的, 提供了给玩家无规则限制的自由式对抗体验。进一步提高了游戏PvP体验的刺激性。新的剧本成功意味着七日世界所采用的赛季剧本模式具有较高的运营潜力。产品在以后, 我们还会持续更新不同的体验的剧本来满足玩家赛季循环的要求。同时, 我们也已经上线了玩家自定义的私人服务。服务器B服, 围绕持续更新的剧本体验和V服带来的玩家生态。产品有潜力长青, 目前中国和海外的用户比例是一比一, 收入比例是一比一点五。谢谢。

William Ding: potential to be evergreen. Currently, the ratio of Chinese to overseas users is 1:1, and the revenue ratio is 1:1.5. Thank you.

Speaker #5: ???Yeah, thank you, thank you for the answer, and I will do the translation. So, the first question is regarding Where Wings Meet. Where Wings Meet has delivered a solid performance, as we have explained, and exceeded our initial expectations before launch.

Bill Pang: 谢谢. Thank you. Thank you for the answer. I will do the translation. Our first question is regarding Where Winds Meet. Where Winds Meet has delivered a solid performance, as we have explained, and exceeded our initial expectation before launch, in terms of both active players and monetization. More notably, we believe the long-term performance has been quite stable, demonstrating a promising potential for sustainable success. Where Winds Meet uniquely adopts a business model that combines high-quality content and a cosmetic-only monetization strategy, with a well-planned cadence for releasing high-quality content, along with the cosmetic-only approach that does not impact the character cultivation process. We believe Where Winds Meet has the potential for a healthy and lasting monetization cycle.

Speaker #5: in both in terms of active players and monetization. And more notably, the, the long-term, we believe the long-term performance has been quite stable. demonstrating a promising potential for the sustainable success.

Speaker #5: Where Wings Meet uniquely adopts a business model that combines high-quality content with a cosmetic-only monetization strategy. With a well-planned cadence for releasing high-quality content, along with the cosmetic-only approach, we ensure that it does not impact the character cultivation process.

Speaker #5: Where Wings Meet, we believe Where Wings Meet has potential for a healthy and lasting monetization cycle. And we are, you know, we are very confident in the future of the game, and in terms of the future continuous development for the content for this game, we'll make continuous, if not bigger, investments in the future.

Bill Pang: We are very confident in the future of the game, and in terms of the future continuous development for the content for this game, we will make continuous, if not bigger, investments in the future. The second question is regarding Once Human. Behind the bounce of performance on Once Human, we actually launched a significant update, which we call the annual 2.0 version, in early July. The new scenario, endless stream, and the new class system have both been well received by the players. The 2.0 version gained massive popularity. That is why the game was pushed to the number four position on Steam's global top seller chart following the launch of the update.

Speaker #5: And the second question is regarding once human. behind the bounds of performance on once human, we actually, we launched a welcomed, significant update, which we call the annual two point oh version in early July.

Speaker #5: the new scenario, end of the stream, and the new class system has been well both well received by the players. The two point oh version gained massive popularity.

Speaker #5: that's why the game was pushed onto number four position on Steam's global top seller chart following the launch of the update. additionally, we also rolled out a new PvP spin-off called RayZone, by the end of July, on July thirtieth, offering players a what we call that rule-free combat experience that enhances the intensity of the game's PvP gameplays.

Bill Pang: Additionally, we also rolled out a new PVP spin-off called Raise Zone by the end of July, on July 30, offering players a, what we call that, rule-free combat experience that enhanced the intensity of the game's PVP gameplay. Looking back, the success of the new scenario demonstrates that the seasonal scenario mode has great potential, and we will continue to launch new scenarios to meet players' seasonal demands. In the meanwhile, we have also introduced a private server called Custom Server. In China, we call that Server V, which allows players to customize their own setting. Looking forward with ongoing updates of the scenario experiences and the healthy ecosystem built around the custom servers, the product has potential for long-term sustainability.

Speaker #5: Looking back, the success of the new scenario demonstrates that the seasonal scenario mode has great potential, and we will continue to launch new scenarios to meet players' seasonal demands.

Speaker #5: In the meanwhile, we have also introduced a private server called Custom Server in China, we call that, Server V, you know, which allows players to customize their own setting.

Speaker #5: with looking forward, with ongoing, updates of the scenario experiences, and a healthy ecosystem built around the Custom Servers, the product has potential for long-term sustainability.

Speaker #5: Regarding questions on the user distribution between China and international, the user distribution is about fifty-fifty between China and the rest of the world. And the revenue distribution is, is about two to three, compared with China versus the rest of the world.

Bill Pang: Regarding the question on the user distribution between China and international, the user distribution is about 50/50 between China and the rest of the world, and the revenue distribution is about 2 to 3 compared to China versus the rest of the world. I hope that answers your question. Thank you.

Speaker #5: Hope that's a hope that that answered your question. Thank you.

Speaker #4: You are next question comes from Alicia Yap with City Group.

Operator: Your next question comes from Alicia Yap of Citigroup.

Speaker #7: hi, thank you. let me turn on Shanghai. CCG showed just twenty-one. what are Now, can management share some additional color on the overall, Blizzard games performance, on the sequential basis?

Speaker 5: Hi, thank you. 管理层晚上好。谢谢接收我的提问。我想问一个关于这个 Blizzard 游戏, 这几个季度其实最近其实整体表现得非常不错, 然后想听听管理层啊, 就是对于 Blizzard 游戏近期的表现的一些看法。然后也想问一下, 就是说啊, 我们在 Blizzard 的所有游戏里面已经覆盖了所有潜在的老玩家和新玩家呢, 还是说我们觉得还有啊未开发的这些用户群体啊能够带来未来的一些增长? 然后啊, 后续的就是 Blizzard 游戏的这种啊增长潜力是在啊内容更新促销活动呢, 还是说啊新用户的增长也会带来啊这个收入的增长? 那我这边自己翻译一下啊, can management share additional color on the overall Blizzard Games performance on the sequential basis? Do you think you have targeted all the potential old and new gamers, or do you think there are still untapped users for Blizzard titles? Will the future growth of Blizzard titles mainly be driven by content updates and promotional activities on the monetization upside, or will it also come from new user growth? Thank you.

Speaker #7: Do you, think you have targeted all the potential all and new gamers, or do you think, they are still untapped users for Blizzard's title?

Speaker #7: Will the future growth of Blizzard titles need to be driven by content updates and promotional activities on the monetization upside, or will it also come from new user growth?

Speaker #7: thank you.

Speaker #6: 暴雪的游戏都是非常优质的作品。我们在上一次财报会议已经分享过, 游戏回归一年以来, 通过产品本地化的运营和线上线下丰富的营销活动, 目前相关产品的数据都已经超过了上次官服的水平。随着网易和暴雪研发团队的深度合作, 相互之间的信任度和配合度也越来越高。未来只要我们能做出更多符合中国玩家游戏品味的内容, 相信有机会会获得更多新的玩家和用户, 也会吸引更多没有回归的老用户。所以我们相信在中国暴雪的游戏潜力是巨大的。谢谢。

William Ding: in China, Blizzard's gaming potential is enormous. Thank you.

Speaker #5: just thank you for your question. first of all, Blizzard product are extremely high-quality, works high-quality games. as we, explained in, in this call and previous calls, after, you know, a year of, returning the product operation in, in China markets, via, you know, various mechanics, you know, with the, online and offline reach marketing activities, the game metrics has surpassed level, surpassed the level previous, prior to the shutting down of the servers.

Bill Pang: Thank you for your question. First of all, Blizzard products are extremely high quality works, high quality games. As we explained in this call and previous calls, after a year of returning the product operation in China markets via various magnets, with the online and offline reach market activities, the game metrics have surpassed the level prior to the shutting down of the servers. Thanks for our dedication of the local operation for both online and offline. As we continue to deepen our collaboration with Blizzard's developing team, our mutual trust and coordination is increasing. Looking to the future, as long as we implement more improvements that align with the local taste and habits of local Chinese players, we believe there is a good opportunity that we can attract even more new players, as well as engaging those who have not returned yet.

Speaker #5: And thanks for our dedication to the local, local operation for both online and offline. As we continue to deepen our collaboration with Blizzard's development team, our mutual trust and coordination are increasing.

Speaker #5: Looking to the future, as f as long as we implement more improvements that align with the local taste and habits of local Chinese players, we believe this is a good opportunity that we can attract even more new players as well as engaging those who haven't returned yet.

Bill Pang: Long story short, we believe there is big potential for Blizzard games in China markets. Thank you.

Speaker #5: long story short, we believe there's big potential for Blizzard games in China markets. Thank you.

Speaker #4: You You are next question comes from Yang Bei with CI/CC.

Operator: Your next question comes from Yang Bei with CICC.

Speaker #8: I thank you. 我的问题有关这个射击品类, 啊, 公司下半年将上线的, 呃, 射击类产品有不少, 包括, 呃, 战友手游、资源和代理的这个产品。呃, 那么我们如何看待当前射击赛道整体的竞争格局? 呃, 像 game management, 呃, the company has a number of shooting games set to launch in the second half of 2025.

Speaker 6: 感谢, 感谢, 关于总, 我有问题有关这个射击品类啊, 公司下半年将上线的射击类产品有不少, 包括酱油手游、资源和代理的这个产品。那么我们如何看待当前射击赛道整体的竞争格局? Thank you, management. NetEase has a number of shooter genre games set to launch in the second half of 2025, including TV and mobile games, as well as self-developed and licensed products. What is your perspective on the overall competitive landscape of the current shooter genre game sector?

Speaker #8: Including PC and mobile games, as well as self-developed and licensed products, what is your perspective on the overall competitive landscape of your current shooting games sector?

Speaker #6: Okay. 射击类游戏是个巨大的赛道, 也是一个红海战场。目前用户对射击类产品的要求普遍比较高。第一, 要求美术的质量非常的高。第二, 要求玩法有创新。网易会持续在射击类游戏方面有有所投入。我们也希望在这个赛道里面, 能有自己领先的产品。谢谢。

William Ding: in this track. Thank you.

Speaker #5: Yeah, thank you for your question. Yeah, the shooting game genre is a very big genre. It's also a very big Red Ocean kind of market print as well.

Bill Pang: Yeah, thank you for your question. The shooter genre is a very big genre, and also a very big red ocean type of market. The players have very high expectations on the quality of the games. For example, you have to have very high-quality art production, and you have to have gameplay innovation. It's a high bar to entry. For NetEase, we will keep investing into this genre, and we believe in the future we can continue to come up with a competitive market in this big genre. Thank you.

Speaker #5: And, the players have very high expectation on the quality of the games. For example, you have to have, you know, very high-quality art production, and you have to have gameplay, innovation.

Speaker #5: it's, it's a high bar, to entry. For NetEase, we will, you know, keep investing into this genre, and we believe in the future we can continue to, come up with competitive market in this big genre.

Speaker #5: Thank you.

Speaker #8: Thank you.

Speaker #4: You are next question comes from Richie Sun with HSBC.

Operator: Thank you. Your next question comes from Rishi Sun with HSBC.

Speaker 6: 管理层, 谢谢你们给我提问的机会。我有两个问题。第一个问题是关于 Marvel Rivals 的, 在第三个赛季推出之后, 看到 Steam 的收入排名有回升, 但之后又跌出了可能前十名的情况。你怎么去评估现在这个新的策略的有效性? 我们是不是已经看到这个游戏达到了峰值, 然后应该有什么可能游戏在开发中的一些玩法、皮肤或者是角色, 你觉得还是会有机会推动游戏重回发展的轨道? 第二个问题就是想问一下以往之海的, 然后请管理层可以分享一下6月份首次测试的一些反馈吗? 这样, 然后这个产品的商业模式是什么? 管理层如何评估这一类的游戏的目标市场, 还有长期的发展潜力? Thank you, management, for taking my questions. First of all, regarding Marvel Rivals, after the launch of Season 3, we see the Steam revenue ranking rebounded, but then dropped to below top 10 afterwards. How would you evaluate the effectiveness of the new strategy so far? Have we already seen a peak, and what are the new gameplay skins or characters in the backlog that we should watch out for to drive the game to regain its momentum? Secondly, regarding Sea of Remnants, can management share the feedback of the first testing in June, and what would be the monetization model, and how would you evaluate the addressable market and longevity of this genre of games? Thank you.

Speaker #9: 关于长, 呃, 谢谢你们给我提问的机会。呃, 我有两个问题。呃, 第一个问题是关于漫威、中锋的。在第三个赛季推出之后, 呃, 看到Steam的收入排名有回升, 但之后, 呃, 又跌出了可能前十名的情况。呃, 你怎么去评估现在这个新的策略的这个有效性? 呃, 我们是不是已经看到这个游戏达到了峰值, 然后应该有什么, 呃, 可能游戏在开发中的一些玩法、皮肤或者是角色, 啊, 你觉得还是会有机会, 呃, 推动, 呃, 游戏重回发展的轨道? 呃, 第二个问题就是想问一下, 以往之海的, 然后请管理层可以分享一下六月份首次测试的一些反馈吗?

Speaker #9: 这样, 然后这个产品的商业模式是什么? 呃, 管理层如何评估这一类的游戏的目标市场, 还有长期的发展潜力? 嗯, thank you management for taking my questions. so first of all, regarding Marvel Rivals, after the launch of season three received the Steam revenue ranking rebounded, but then dropped to below top ten afterwards.

Speaker #9: So how would you evaluate the effectiveness of the new strategy so far? Have we already seen a peak? And what are the new gameplay skins or characters in the backlog that we should watch out for to drive the game to regain its momentum?

Speaker #9: And secondly, regarding Sea of Remnants, can management share the feedback of the first testing in June? And what would be the monetization model? And how would you evaluate the addressable market and longevity of this genre of games?

Speaker #9: Thank you.

Speaker #6: Management, 在近期推出了S3赛季以及蓝赛事的中期决赛。我们看到无论在收入还DAU都有提升且稳定下来。所以我们认为新的赛季更新内容以及策略都是有效的。接下来我们会基于赛季更新节奏持续推出更多新玩法机制、新英雄以及更多更受欢迎的皮肤。第二个问题是关于遗忘之海。我们非常重视遗忘之海这个产品。我们也有很有信心把它打造成一个成功的顶部的游戏。这个游戏会在明年推出, 所以敬请期待。

William Ding: launched next year, so please stay tuned.

Speaker #5: Okay, so, first regarding your question, on Marvel Rivals, Marvel Rivals recently launched season three, and the mid-season finals of, Marvel Rivals Ignite also concluded.

Bill Pang: First, regarding your question on Marvel Rivals, Marvel Rivals recently launched Season 3, and the mid-season finals of Marvel Rivals Ignite also concluded. We have observed an upward and stabilized trend on both its DAU and revenue, which makes us believe that the new seasonal content update and strategy are effective. Looking forward, we will continue to introduce more new gameplay mechanics, new heroes, new popular costumes based on our new cadence of seasonal update. For your questions regarding Sea of Remnants, Sea of Remnants is a very important product to us, and we have high confidence that we will make this a top-tier successful game, and the game will be launched next year. Regarding the detail of this game, please stay tuned. Thank you.

Speaker #5: We have observed upward and stabilized trend on both its DAU and revenue, which makes us believe that the new seasonal content update and strategy are effective.

Speaker #5: looking forward, we'll continue to introduce more new gameplay mechanics, new heroes, new popular costumes, based on our new cadence of seasonal updates. for your questions regarding Sea of Remnants, Sea of Remnants is a very, important product to us, and, we have high confidence that we'll make this, top-tier successful game, and the game will be launched next year.

Speaker #5: So regarding the detail of this game, please stay tuned. Thank you.

Speaker #4: You are next question comes from Felix Liu with UABS.

Operator: Your next question comes from Felix Liu with UBS.

Speaker 6: 喂, 哎, 谢谢管理层接受我的提问。呃, 我有两个问题。嗯, 第一个是关于我们公司的常青树游戏。嗯, 我们注意到啊, 国内的这个几款常青树游戏有复苏, 比如 Eggy Party, Fantasy Westward Journey 端游等。呃, 管理层能否分享一下这两个产品的运营状态? 啊, 他们近期复苏的原因是什么? 呃, 从长期来看, 嗯, 管理层会如何看待呃, 在发展现有产品、现有 IP 和从零开始开发新游戏、新 IP 之间的这个资源配置策略? 呃, 我第二个问题是关于我们的另外一个新的作品啊, Annata。呃, 请问管理层, 这款游戏它的 R&D 状态目前是怎么样的? 您预期它呃, 什么时候会上线? 啊, 尤其考虑到竞争对手也有几款同类的产品, 我们应该如何看待 Annata 的竞争格局? Thank you, management, for taking that question. I have two questions. Number one is on your evergreen titles. We noticed recovery in quite a few of your evergreen titles, such as Eggy Party and Fantasy Westward Journey Online. Can management share more color on the status of the Dimension 2 titles? Any reasons for their recent recovery? In the long run, how does management think about resourcing on existing titles and IPs versus developing new games from ground up? My second question is on or another game in your pipeline, which is Annata. What is the R&D status of Annata? When do you expect this game to launch?

Speaker #10: 谢谢管理层接受我的提问。我有两个问题。第一个是关于我们公司的常青树游戏。呃, 我们注意到国内的这个几款常青树游戏有复苏, 比如蛋仔派对、梦幻西游、端游等。呃, 管理层能否分享一下这两个产品的运营状态? 啊, 它们近期复苏的原因是什么? 呃, 从长期来看, 啊, 管理层会如何看待, 呃, 在发展现有产品、现有IP和从零开始开发现有新IP之间的这个资源配置策略? 呃, 我第二个问题是关于我们的另外一个新的作品, 啊, 无限大。呃, 请问管理层这款游戏它的研发状态目前是怎样的? 年预计它, 呃, 什么时候会上线? 呃, 尤其考虑到竞争对手也有几款同类的产品, 我们应该如何看待无限大的竞争格局? 呃, thank you management for taking my question.

Speaker #10: I have two questions. number one is on your, evergreen, titles. we noticed recovery in quite a few of your evergreen titles such as Egg Party and Fantasy Westwood Journey Online.

Speaker #10: the management share more color on the status of the mentioned two titles? Any reasons for their recent recovery? And in the long run, how does management think about resourcing on existing titles and IPs versus developing new games from up?

Speaker #10: my second question is on, another game in your pipeline, which is Anata. what is the R&D status of Anata? When do you expect this game to launch?

Speaker #10: And how should we think about the competition landscape for Anata, considering there are a few new games from your competitors that also fall into this genre?

Speaker 6: How should we think about the competition landscape for Annata, considering there are a few new games from your competitors that also fall into this genre? Thank you.

Speaker #10: Thank you.

Speaker #6: Okay. 这个问题由我来回答。我是, 呃, 我是这个网易的副总裁丁峰。啊, 呃, 经过一年的持续的体验优化, 梦幻西游的电脑版更像数据呢, 已经恢复到, 啊, 之前的情况, 并且持续在提升。呃, 同时我们在七月份呢, 这个也推出了, 呃, 这个畅玩服, 新的一种, 啊, 新的服务器, 啊, 这个广受玩家的欢迎。我们很高兴地宣布呢, 这个, 啊, 梦幻西游电脑版呢, 在八月三号呢, 创造了两百九十三万的同时在线的一个最高的记录, 新高的一个记录。啊, 这个, 嗯, 我们相信梦幻西游的电脑版会持续的, 啊, 通过不断的创新, 持续这个增长。啊, 呃, 蛋仔派对是网易, 呃, 这个首创的UGC的一种游戏内容形式, 经过过去三年的运营, 我们已经探索出成功的, 啊, 游戏运营的这个方法。所以在未来的蛋仔派对发展过程当中, 我们还会持续重视内高质量内容的开发和加大营销推广的投入。我们很有信心把蛋仔派对打造成全民热爱的, 一款合家欢游戏。无限大是吧?

Speaker 7: the core game experience and reserving long-term content for future launch. We will reveal new content for Next Destiny around the Tokyo Game Show. Please stay tuned. Thank you.

Speaker #8: 对, 还是。

Speaker #6: 呃, 无限大目前正处于顺利的量产阶段, 产品正在持续强化游戏的核心体验以及储备未来上线以后的长线内容。我们会在东京电玩展前后曝光无限大新的内容。请大家关注, 谢谢。

Speaker #5: Okay, so, yeah, let me translate this answers in different parts. So first, regarding your question, first part, Mr. Yin Feng Ding answered about the Fantasy West Journey.

Bill Pang: OK, so let me translate these answers in different parts. First, regarding your question, let the first part, Mr. Yin Feng, answer about the Fantasy Westward Journey PC version. After a year of continuous experience optimization, various metrics of Fantasy Westward Journey online have observed recovery and stable improvements. Also, as we mentioned, the newly launched unlimited server has been well received by players, and we are super excited to announce that the number of peak concurrent users set a new record in early August at the 2.93 million PCU number. We have been running this game for so many years, and we are confident that with continuous innovation, Fantasy Westward Journey PC will continue growing in the future that we can foresee. The next question is regarding Eggy Party. Eggy Party, as you know, is a one-of-a-kind UGC game, a UGC platform kind of game.

Speaker #5: PC version. So, after years after a year of continuous experience optimization, various metrics of Fantasy Westwood Journey Online has observed recovery and stable improvements.

Speaker #5: And also as we mentioned, the newly launched unlimited server, has been well received by players. And we're super excited to, to, to announce that the number of peak concurrent users, you know, set a new record, on early August, at the, two point ninety-three million, PC user number.

Speaker #5: And, we have been running this game for so many years, and, we, we are confident that, with continuous innovation, Fantasy Westwood Journey PC will be continuing growing in the futures.

Speaker #5: In the future that we can foresee. And the next question is regarding Eggie Party. Eggie Party, as you know, is a one-of-a-kind UGC game, UGC platform kind of game.

Speaker #5: And after three years of exploration, we have mastered the methodology of operating this type of game. And in the future, we're going to keep investing into the game, keep encouraging high-quality UGC content, to prosper the ecosystem, and also we're going to keep investing into the marketing to keep promoting the game to make it the, you know, household game for everyone, in China and, have everyone in China understand that it's the, associated game with this, the whole family party game kind of, concept.

Bill Pang: After three years of exploration, we have mastered the methodology of operating this type of game. In the future, we are going to keep investing into the game, keep encouraging high-quality UGC content to prosper the ecosystem. Also, we are going to keep investing into the marketing to keep promoting the game, to make it the household game for everyone in China and have everyone in China understand that it is the associated game with this whole family party game kind of concept. That is for the Eggy Party. For your question regarding Annata, Annata is now well underway in the mass production stage with ongoing efforts to strengthen the core experience and prepare for the long-term content pipeline as well. In the face of competitors, we are more focused on whether we are able to create superior gaming quality that differentiates us from existing market offerings.

Speaker #5: So that's for the Eggie Party. And for your question regarding Anata, Anata is now well underway in the mass production stage, with ongoing efforts to strengthen the core experience and prepare for the long-term content pipeline as well.

Speaker #5: in the face of competitors, we're more focused on whether we are able to create superior gaming, quality that differentiates us from existing market offerings.

Speaker #5: And also, we are looking forward. We anticipate that new content and progress will be revealed around the Tokyo Game Show in late September. Please stay tuned for our product news.

Bill Pang: Also, we are looking forward, we anticipate that new content and progress will be revealed around the Tokyo Game Show time late September. Please stay tuned for product news. Thank you.

Speaker #5: Thank you.

Speaker #4: You are next question comes from Miranda Zhong with Bank of America.

Operator: Your next question comes from Miranda Zhuang with Bank of America.

Speaker #7: 晚上好, 感谢管理层接受我的提问。呃, 我的问题是关于这个游戏的营销和运营的策略。那想请教一下公司对于老游戏和新游戏的营销和运营的策略是怎么样的? 今年有哪些侧重点和变化吗? 然后有看到什么样的一些效果? 那我们接下来对于, 呃, 营销销售费用有什么样的一个预期? 谢谢。呃, 那我发现下我的问题。呃, 可以 management share, 呃, your marketing and operational strategies for your old game and also new game?

Speaker 5: 晚上好, 感谢管理层接受我的提问。我的问题是关于这个游戏的营销和运营策略。那想请教一下公司对于老游戏和新游戏的营销和运营的策略是怎么样的? 今年有哪些侧重点和变化吗? 然后有看到什么样的一些效果? 那我们接下来对于营销销售费用有什么样的一个预期? 谢谢。那我翻一下我的问题。Can management share your marketing and operational strategies for your old game and also new game? What are your key focuses and if any changes that you would like to highlight this year? What kind of results are you seeing? What is your expectation for the sales and marketing expenses? Thank you.

Speaker #7: 呃, what are your key focuses and if any changes that you would like to highlight this year? And what kind of results are you seeing?

Speaker #7: what's your expectation, for the sales and marketing expenses? Thank you.

Speaker #6: 呃, 网易在新老游戏之间的运营, 我们是有一套非常成熟的这个策略的。啊, 我们有一套标准的这个操作流程。我们也非常清楚地知道自己该如何去做好营销。尤其要积极利用好自媒体和 AI 工具。啊, 呃, 在营销费用方面, 我们, 呃, 是会做到合情合理该花钱的地方花钱, 该省的地方省。呃, 我想在未来的几个季度里面都会看到, 啊, 我们的营销的花费是, 啊, 精准, 啊, 有效。谢谢。

William Ding: few quarters, you will see that our marketing spending is precise and effective. Thank you.

Speaker #5: Yeah, so, we have been doing this business for twenty-something years. For new games and old games, how to operate, how to market, you know, we have developed a, you know, mature methodology and standard operation procedures.

Bill Pang: Yeah, so we have been doing this business for 20-something years. For new games and old games, how to operate, how to market, we have developed a mature methodology and standard operation procedures. We know how to invest into marketing and when to invest into marketing. Of course, now we are embracing new methods like social media, like the power of AI, everything. We believe we know when to spend, where to spend precisely, and when and where not to spend as well. In the future, you will see our marketing is going to be more precise and more effective. Thank you.

Speaker #5: We know how to invest into marketing and when to invest into marketing. And, of course, you know, this now we're embracing, new, new, new method like the, social media, like, you know, the power of AI, everything.

Speaker #5: So, we believe we know when to spend, where to spend precisely, and when to, and where not to spend as well. So, in the future, you will see, our marketing is going to be, precise, more precise, and more effective in the future.

Speaker #5: Thank you.

Speaker #4: You are next question comes from Lincoln Kong with Goldman Sachs.

Operator: Your next question comes from Lincoln Kung with Goldman Sachs.

Speaker #9: 嘿, 谢谢YCJ和我提问。我有两个问题。第一个是关于AI的。因为这几个月其实也看到这个AI的这个多模态模型, 呃, 有一些飞速的进展。那公司现在就是能不能看到这个AI对于游戏赋能这边的一个加速。啊, 呃, 还有哪些可能存在的这个瓶颈呢? 呃, 呃, 网易就自身在这个AI的这个应用上对现有的这个游戏, 呃, 有没有一些已经有的这个应用和规划? 那什么时候我们可以看到一些这种AI native的这个游戏? 呃, 那第二个问题是关于咱们这个海外市场。呃, 其实, 呃, 公司最近几款这个游戏都是我们自己全球去做发行了。那就是往后看我们的这个海外扩张的这个策略, 呃, 是怎么想的? 那尤其是说就是哪些游戏类型是我们可能后面重点要去发力的方向? 那我自己翻译一下。啊, thank you management for taking my questions.

Speaker 6: 谢谢管理层接受我的提问。我有两个问题。第一个是关于AI的, 因为这几个月其实也看到这个AI的这个多模态模型有一些飞速的进展。那公司现在就是能不能看到这个AI对于游戏赋能这边的一个加速, 还有哪些可能存在的这个瓶颈呢? 网易就是怎么在这个AI的这个应用上对现有的这个游戏有没有一些已经有的这个应用和规划? 什么时候我们可以看到一些这种AI native的游戏? 第二个问题是关于咱们这个海外市场。其实公司最近几款这个游戏都是我们自己全球去做发行。就是往后看, 我们的这个海外扩张的这个策略是怎么想的? 尤其是说就是哪些游戏类型是我们可能后面重点要去发力的方向。我自己翻译一下。Thank you, management, for taking my questions. I have two questions. The first one is on AI. In recent months, the rapid development of AI multi-model has been quite notable. Has the company seen any acceleration in being empowered through AI? What are the existing bottlenecks that still remain? What are our plans for AI adoption in our existing games? When can we expect some truly AI native games? My second question is on the overseas market. Company actually recent games has been globally published by ourselves. What are the important directions or game genres we are focused on for future overseas expansions? Thank you.

Speaker #9: I have two questions. the first one is on AI. So in recent months, the, rapid development of AI multi-model, has been quite notable. so has companies seen any acceleration in game, in powered, through AI?

Speaker #9: So, what are the existing bottlenecks that still remain? And what are our plans for AI adoption in our existing games? And when can we expect to see some truly AI-native games?

Speaker #9: So my second question is on the overseas market. company actually recent games has been globally published our, by ourself. So what are the important, directions or game genres, we are focused on for future overseas expansion?

Speaker #9: Thank you.

Speaker #6: Okay. AI 的确日新月异, 呃, 有一句话说任何一个大模型, 这个, 这个有效期只有三个月。啊, 总之三个月都不到。就是每隔三个月或者两个月就会出来一个新的模型。呃, 网易积极地投入大量的资源在这个适应, 啊, 利用好, 啊, 这个AI的这个工具。啊, 目前AI在我们的产品开发和产品运营上, 啊, 带来的效果是很明显的。啊, 我也相信, 啊, 在不久的将来, 啊, 可以, 啊, 有专门利用AI的自适应性做出来的更加生动有趣的, 啊, 游戏。谢谢。第二个问题是, 啊, 网易的游戏, 啊, 在海外, 啊, 我们是自己发行的。我想这是我们网易非常重要的一种能力。海外的市场在欧美、日韩、东南亚、南美等等都是对我们来说是非常有吸引力的。啊, 我们在海外的游戏通过漫威争锋和 Once Human 这些产品, 还有在日本, 啊, 第五人格以及, 啊, 荒野行动, 都取得了不错的成绩。啊, 我相信在未来的两到三年, 啊, 海外的游戏, 网易还会持续不停地挣扎, 而且有更加多成功的产品来适应海外的用户的需要。谢谢。

William Ding: will continue to grow, and there will be more successful products to meet the needs of overseas users. Thank you.

Speaker #5: Yeah, so, regarding your first question about the AI, you know, there's a joke saying that every the lifespan of every big model is only three months.

Bill Pang: Yeah, so regarding your first question about AI, there is a joke saying that the lifespan of every big model is only three months. Basically, every new model comes out every couple of months. We have been invested a lot of resources to embrace AI, to leverage AI in our development, in our operations, and how to embrace AI in order to train everything. So looking to the future, AI is going to play more and more important roles. We are looking into the future that someday there might be games designed by AI. It could be a fun game. That is a future we are looking forward to. Regarding your next question for the overseas publishing, yes, this is a critically important capability of us to be able to publish games globally in different geos. The global market is kind of geo-based.

Speaker #5: Basically, every new model comes out every couple of months. We have invested a lot of resources to embrace AI, to leverage AI in our developments, in our operations, you know, how to embrace AI in our toolchain, everything.

Speaker #5: so looking to the future, you know, AI is going to play more and more important roles, and we, we look into the, the, the future that someday there might be, games designed, by AI, you know, could be fun games that, that the future we, we're, we're looking forward to.

Speaker #5: And regarding your next question for the overseas publishing, yes, this is a critically important, capability of, of us to be able to, to publish game globally in different geos.

Speaker #5: you know, the, the global market is, is, is, is kind of geo-based, you know, in North America and South, South America, in Japan, every market has its own, attribute.

Bill Pang: In North America, in South America, in Japan, every market has its own attribute. We have learned through a bunch of global game operations from Marvel Rivals, Once Human, and also in the West market and identified and maxed out in the Japan market. We have learned a tremendous amount of firsthand, hands-on experiences from the operation. Looking forward in the next couple of years, you will see our global operation will keep growing, fueled by our more important new games. We do believe growing globally is going to be a very important task for us. Thank you for your question. Operator, let us go with one last question, please.

Speaker #5: And we have learned, through a bunch of, global game operation from Marvel Rivals, Once Human, and also, in Westmarket and, and identified and maxed out in Japan market, we have learned tremendous amount of firsthand, hands-on experiences from, from the operation.

Speaker #5: And looking forward, in the next couple of years, you will see our global operation will keep growing, fueled by our more important new games.

Speaker #5: And, we do believe, growing globally is, is going to be a very important task for us. thank you for your question, and operator, let's go with one last question, please.

Speaker #4: Thank you. Your last question comes from Jia Long Shi with Nomura.

Operator: Thank you. Your last question comes from Jia Longshi with Nomura.

Speaker #8: hi, 管理层晚上好, 非常感谢接受我的提问。我就问一个很快的问题。呃, 我想, 呃, 请问一下就是管理层能不能分享一下漫威立法狂潮在这个海外市场的表现? 呃, 另外的话就是对于, 呃, 这款游戏管理版本的话, 它的这个预计的发布时间有没有更新? 公司对这款游戏未来的这个期望还有具体的这个目标是什么? 我自己翻译一下。 So, I just have one question. Can management share the performance of Marvel Mystic Mayhem in overseas markets so far?

Speaker 6: 好的，管理层晚上好，非常感谢接受我的提问。我就问一个很快的问题。我想请问一下，就是管理层能不能分享一下《Marvel: Mystery Mayhem》在这个海外市场的表现？另外的话，就是对于这款游戏国内版本的话，它的这个预计的发布时间有没有更新？公司对这款游戏未来的这个期望，还有具体的这个目标是什么？So I just have one question. Can management share the performance of Marvel: Mystery Mayhem in a word?

Operator: market so far. In addition, are there any updates on the expected launch time for the domestic version? What are the company's expectations or specific targets for this game, going forward? Thank you.

Speaker #8: in addition, are there any updates on the expected launch, launch time for the domestic version? What are the company's expectations or specific targets for this game, going forward?

Speaker #8: Thank you.

Brandi Piacente: 好的，那《Marvel: Mystery Mayhem》呢，是由6月26日正式上线海外的游戏呢，凭借其独特的美术风格和创新的玩法设计呢，分别获得了苹果、谷歌等商店的多次的推荐和BD的采访。在7月底发布的新版本呢，《神奇四侠》得到用户的肯定。未来呢，我们会加快新玩法和新内容的更新迭代，提供优质的游戏体验。当然我们也面临这个，也遇到这个长线耐玩性的挑战，我们应该解决这个问题。同时呢，在国内版本方面呢，我们也准备在Q4的时候呢，推出这个国内的版本。大概情况就这样，谢谢。

Bill Pang: As you know, Marvel: Mystery Mayhem was officially launched overseas, in the overseas market, on June 26. With its unique art style and innovative game design, the game has received multiple features from Google and App Store, and also editor interviews as well. The update was fantastic for release at the end of July. It has been well received by players as well. In the meantime, we do face some long-term growth challenges for the game, and we are in the process of figuring out how we should grow the game and keep the game in the long run. Thank you.

William Ding: That concludes the question and answer session. I would like to turn the conference back to Brandi Piacente for any additional or closing remarks.

Speaker 5: Thank you once again for joining us today. If you have any further questions, please feel free to contact us directly. Have a great day and good.