Q1 2026 NetEase Inc Earnings Call

May 21, 2026

Speaker #3: 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 are intended to qualify for the Safe Harbor from Liability.

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: As established by the US 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.

Speaker #2: 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.

Speaker #2: Including its annual report on Form 20F and in announcements and filings on the Hong Kong Stock Exchange's website. The company does not undertake any obligation to update this forward-looking information except as required by law.

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, which should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the Q1 2026 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, Mr. Hu Zhipeng, Executive Vice President, Ms. Aileen Bin Mo, Vice President of Finance, and Mr. Bill Pang, Vice President of Corporate Development.

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, which should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the Q1 2026 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, Mr. Hu Zhipeng, Executive Vice President, Ms. Aileen Mo, Vice President of Finance, and Mr. Bill Pang, Vice President of Corporate Development.

Speaker #2: During today's call, management will also discuss certain non-GAAP financial measures, which should not be used as a substitute for the financial information prepared and presented in accordance with US GAAP.

Speaker #2: For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the first quarter 2026 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; Mr. Hu Zhupeng, Executive Vice President; Ms. Eileen Mo, Vice President of Finance; and Mr. Bill Tong, 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, please go ahead.

Brandi Piacente: I will now turn the call over to Bill, who will read the prepared remarks on William's behalf. Bill, please go ahead.

Speaker #3: Thank you, Brandi, and welcome everyone to 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 welcome everyone to today's call. Before we begin, I would like to remind everyone that all percentages are based on RMB. 2026 is off to a solid start, with total revenue reaching RMB 30.6 billion in Q1, driven by continued momentum in our games business. Our games and related value-add services generated net revenues of RMB 25.7 billion, reflecting our strength in long-term game operations and growing global appeal. Our performance of this quarter was underpinned by continued strength of our game portfolio, both internationally and domestically. Overseas, our titles demonstrated growing cross-market appeal across genres and platforms. At home, our established franchises sustained strong player activity through consistent content delivery and live service innovation. Together, these results reflect the breadth and resilience of what we have built across genres, platforms, and player communities worldwide. Let me walk through some of the highlights.

Speaker #3: 2026 is off to a solid start. With total revenue reaching RMB 30.6 billion in the first quarter, driven by continued momentum in our games business, our games and related value-added services generated net revenues of RMB 25.7 billion, reflecting our strengths in long-term game operations and growing global appeal.

Speaker #3: Our performance this quarter was underpinned by the continued strengths of our game portfolio, both internationally and domestically. Overseas, our titles demonstrated growing cross-market appeal across genres and platforms.

Speaker #3: At home, our established franchises sustained strong player activity through consistent content delivery and live service innovation. Together, these results reflect the breadth and resilience of what we have built across genres, platforms, and player communities worldwide.

Speaker #3: Now, let me walk through some of the highlights. Since its overseas launch in last November, Where We Meet has become a global phenomenon, resonating across cultures and maintaining momentum well beyond the initial launch window.

Bill Pang: Since its overseas launch in last November, Where Winds Meet has become a global phenomenon, resonating across cultures and maintaining momentum well beyond the initial launch window. In March, it launched its first major expansion, Hexi, bringing players to a desert environment with distinctive settings and uniquely designed in-game enemies. More recently, the game introduced the version 1.6, featuring a new region, Xinchuan, alongside a novel wind-based exploration system that further enhanced the immersion and player freedom in the open world experience. The update was well-received by players, propelling the game to number 2 on Steam's global top seller chart. Strong momentum across both overseas and domestic markets, backed by sustained player engagement, translated into another record in quarterly revenue, a result that reflects the compounding value of high-quality content and reinforces our confidence in this title's long-term potential.

Speaker #3: In March, it launched its first major expansion, Hexi, bringing players to a desert environment with distinctive settings and uniquely designed in-game enemies. More recently, the game introduced a version 1.6 featuring a new region, Xinchuan, alongside a novel wind-based exploration system that further enhanced the immersion and player freedom in the open world experience.

Speaker #3: The update was well received by players, propelling the game to number two on Steam's global top-seller chart. Strong momentum across both overseas and domestic markets, backed by sustained player engagement, translated into another record in quarterly revenue—a result that reflects the compounding value of high-quality content and reinforces our confidence in this title's long-term potential.

Speaker #3: Our rivals continue to expand their reach among global hero shooter audiences, supported by a steady cadence of seasonal updates and high-quality content. On April 10, the game introduced new Steam cosmetic content, including a major outfit for Deadpool and Jeff the Landshark.

Bill Pang: Marvel Rivals continue to expand its reach among global hero shooter audiences, supported by a steady cadence of seasonal updates and high-quality content. On 10 April, the game introduced the new themed cosmetic content, including made outfit for Deadpool and Jeff the Land Shark, which generated strong community engagement, driving it to number 2 on Steam's top seller chart in the US. In addition to the content update, Marvel Rivals expanded its PVE experience with the Blood Hunt mode in season 7.5, featuring new boss battles and refreshed mechanics as players engage in intense fights against the Lord of Vampires. It also introduced its Path to Doomsday event, a year-long roadmap featuring new modes and in-game events inspired by the Infinity Saga. This initiative is deepening player engagement while creating natural links to broader Marvel storytelling, leading into the release of Marvel Studios' Avengers: Doomsday in December.

Speaker #3: This generated strong community engagement, driving it to number two on Steam's top seller chart in the US. In addition to the content update, my rivals expanded its PVE experience with the Bloodhound mode in Season 7.5, featuring new boss battles and refreshed mechanics as players engage in intense fights against the Lord of Vampires.

Speaker #3: It also introduced its Path to Doomsday event, a year-long roadmap featuring new modes and in-game events inspired by the Infinity Saga. This initiative is deepening player engagement while creating natural links to broader Marvel storytelling, leading into the release of Marvel Studios' Avenger: Doomsday in December.

Speaker #3: Together, these efforts reinforce my rivals' position as a dynamic, evolving place with strong cross-media resonance. In March, Knives Out launched a crossover with the iconic Tokyo Ghoul franchise.

Bill Pang: Together, these efforts reinforce Marvel Rivals position as a dynamic, evolving place with strong cross-media resonance. In March, Knives Out launched a crossover with the iconic Tokyo Ghoul franchise, integrating its themes into the in-game world and allowing players to engage with its universe. The collaboration sparked strong responses on social media and generated high player engagement. Supported by the IP's reach and well-designed event execution, Knives Out reached number three on Japan's LS top-grossing chart. In the same genre, Blood Strike celebrated the second anniversary of its global mobile launch in March, achieving a record high daily active users, demonstrating the enduring strength of its player community. International expansion, our domestic performance remains solid. We sustained strong engagement and revenue in Q1 across established titles, supported by ongoing content updates and gameplay innovation.

Speaker #3: Integrating its themes into the in-game world and allowing players to engage with its universe. The collaboration sparked strong responses on social media and generated high player engagement.

Speaker #3: Supported by the IP's reach and well-designed event execution, Knives Out reached number three on Japan's LS top grossing chart. In the same genre, Bloodstripe celebrated the second anniversary of its global mobile launch in March.

Speaker #3: Achieving a record high daily active users, demonstrating the enduring strengths of its player community. Alongside international expansion, our domestic performance remained solid. We sustained strong engagement and revenue in the first quarter across established titles, supported by ongoing content updates and gameplay innovation.

Speaker #3: Multiple titles reached highs in player base and activity, demonstrating the enduring appeal of our esteemed franchises. Phoenix Welfare Journey Online, our flagship MMORPG, continues to evolve through new mechanics and content that keep our players engaged.

Bill Pang: Multiple titles reached highs in player base and activity, demonstrating the enduring appeal of our esteemed franchises. Fantasy Westward Journey Online, our flagship MMORPG, continues to evolve through new mechanics and content that keeps our players engaged. In Q1, the Unlimited server rolled out a series of updates that enriched gameplay and PVP events, including the family system, which allows players to build in-game social bonds, cultivate combat companions, and experience a refreshed progression arc. The features were well-received by the community, and the Unlimited server continued to serve as an effective entry point for both returning and new players, broadening the active user base while retaining the loyalty of long-standing fans. Peak concurrent users reached a new high of 3.9 million, and the title recorded its highest-ever quarterly revenue, underscoring its continued vitality.

Speaker #3: In the first quarter, the unlimited server rolled out a series of updates that enriched gameplay and PVP events. Including the family system, which allows players to build in-game social bonds, cultivate combat companions, and experience a refreshed progression arc.

Speaker #3: The features were well received by the community, and the unlimited server continued to serve as an effective entry point for both returning and new players.

Speaker #3: Broadening the active user base while retaining the loyalty of long-standing fans. Peak concurrent users reached new highs of 3.9 million. And the title recorded its highest ever quarterly revenue, underscoring its continued vitality.

Speaker #3: Phoenix Welfare Journey Mobile also maintained strong momentum. With its specialized server continuing to refine progression systems and steadily expanding active player base, the game's 11th anniversary event in March was a particular highlight, driving daily active users to its highest level since 2017.

Bill Pang: Fantasy Westward Journey Mobile also maintained strong momentum, with its specialized server continuing to refine progression systems and steadily expanding active player base. The game's 11th anniversary event in March was a particular highlight, driving daily active users to its highest level since 2017. In April, more updates to the in-game economic system continued to strengthen the long-term health and balance of the game's overall ecosystem. Tianxia, a long-running MMO franchise with over 18 years of operations, delivered a record commercial performance in Q1, supported by its loyal community and stable live operations cadence. The game continues to evolve through player co-creation, with ongoing content updates sustaining engagement, while more new features are being explored to enhance personalization and deepen player connections. Ghost Story Mobile, one of NetEase's most enduring MMORPG franchises, recently celebrated its 10th anniversary, a milestone reflecting the strength of our long-term live service capabilities.

Speaker #3: In April, more updates to the in-game economic system continued to strengthen the long-term health and balance of the game's overall ecosystem. 天下, a long-running MMO franchise with over 18 years of operations, delivered a record commercial performance in the first quarter.

Speaker #3: Supported by its loyal community and stable live operations cadence, the game continues to evolve through player co-creation. Ongoing content updates sustain engagement, while more new features are being explored to enhance personalization and deepen player connections.

Speaker #3: Ghoul Story Mobile, one of NetEase's most enduring MMORPG franchises, recently celebrated its 10th anniversary—a milestone reflecting the strengths of our long-term live service capabilities.

Speaker #3: Since its 2016 launch, the title has attracted over 200 million registered users, with its longevity built on the consistent content updates evolving gameplay experiences and a deeply loyal community.

Bill Pang: Since its 2016 launch, the title has attracted over 200 million registered users, with its longevity built on the consistent content updates, evolving gameplay experiences, and a deeply loyal community. As a pioneer of film and television crossovers in gaming, Ghost Story Mobile once again partnered with hit TV drama, Love O2O, and the actors for its 10th anniversary, reuniting players with beloved characters and classic experiences from the series, reaffirming the title's momentum as it enters into its second decade. Eggy Party continues to hold its position as China's leading party game destination. Spring Festival events have become a meaningful annual tradition, bringing players together with friends and family through themed content on Eggy Island, reinforcing the game's identity as a shared social space.

Speaker #3: As a pioneer of film and television crossovers in gaming, Ghoul Story Mobile once again partnered with the TV drama Love 020 and the actors for its 10th anniversary, reuniting players with beloved characters and classic experiences from the series.

Speaker #3: Reaffirming the title's momentum as it enters into its second decade, Anki Party continues to hold its position as China's leading party game destination. Spring Festival events have become a meaningful annual tradition, bringing players together with friends and family through Steam's content on Anki Island.

Speaker #3: Reinforcing the game's identity as a shared social space. Building on the festive atmosphere, in February, the introduction of several beloved IPs, including My Little Pony, drove strong community participation and pushed the game to the top of China's LS crossing chart.

Bill Pang: Building on the festive atmosphere, in February, the introduction of several beloved IPs, including My Little Pony, drove strong community participation and pushed the game to the top of China's iOS grossing chart. Identity V maintained steady engagement and momentum throughout the first quarter with enriched gameplay systems that reinforced its unique position in the asymmetric battle arena genre. During the Spring Festival event, it added more depth by introducing new characters and themed content alongside limited time gameplay experiences within the classic When We Four mode. In March, its eighth anniversary brought new variations to the classic When We Four mode, where the sizes of survivors and hunters shift during matches based on player actions.

Speaker #3: Identity V maintained steady engagement and momentum throughout the first quarter with enriched gameplay systems that reinforced its unique position in the asymmetric battle arena genre.

Speaker #3: During the Spring Festival event, it added more depth by introducing new characters and Steam content, alongside limited-time gameplay experiences within the classic 1v4 mode.

Speaker #3: In March, its 8th anniversary brought new variations to the classic 1v4 mode, with the sizes of survivors and hunters shifted during matches based on player actions.

Speaker #3: It also added more dynamics to the fast-paced 2v8 mode, with new card-based mechanics that influenced real-time battle—an integral part of its broader content and operations strategy. eSports remains a core pillar of the game's long-term engagement.

Bill Pang: It also added more dynamics to the fast-paced 2V8 mode with new card-based mechanics that influence real-time battle progression. As an integral part of its broader content and operation strategy, esports remains a core pillar of the game's long-term engagement. Call of Duty: Duos 9, the game's premier global tournament, reached its climax with the global finals held in Shanghai earlier this month. Elite teams from regions across the globe delivered highly competitive matches that ignited community excitement. Infinite Borders, our signature SLG title, continues to push the genre's boundary with updates like the Bliss addition that streamline time-consuming actions and rebalance battle pacing, enhancing the overall strategic experience. Beyond the base addition, the game continued to enrich its seasonal updates with fresh landscape designs, themed character portraits, and crossovers with popular IPs, all of which were well-received by the players over the past months.

Speaker #3: Core of the Beast 9, the game's premier global tournament, reached its climax with global finals held in Shanghai earlier this month. Elite teams from regions across the globe delivered highly competitive matches that ignited community excitement.

Speaker #3: Infinite Borders, our S-signature SLG title, continues to push the genre's boundaries with updates like the Beast Edition that streamline time-consuming actions and rebalance battle pacing, enhancing the overall strategic experience.

Speaker #3: Beyond the Beast Edition, the game continues to enrich its seasonal updates with fresh landscape designs, Steam's character portraits, and crossovers with popular IPs, all of which were well received by the players over the past months.

Speaker #3: These updates resonated strongly with the community, drove a meaningful improvement in daily active users, and continue to strengthen the game's foundation for long-term operations.

Bill Pang: These updates resonated strongly with the community, drove a meaningful improvement in daily active users, and continued to strengthen the game's foundation for long-term operations. The Naraka: Bladepoint franchise continued to refine its melee-focused combat experience through new heroes, new maps, and updated battle mechanics that keep the fast-paced gameplay fresh. A 2-week crossover event with Overwatch in China helped expand the game's reach, connecting two distinct player communities. Sword of Justice maintained a vibrant player community through rich content and a lively open world that continues to evolve. The title continues to enrich player interaction and creative gameplay experiences, introducing features such as text-to-item generation and in-game narrative creation. These innovations not only deepen the player engagement, but also fostered a thriving ecosystem of user-generated content, strengthening player connections. Innovation is a driving force for the content creation in our existing portfolio, as well as our games under development.

Speaker #3: The Naraka Baypoint franchise continues to refine its melee-focused combat experience through new heroes, new maps, and updated battle mechanics that keep the fast-paced gameplay fresh.

Speaker #3: A 2v2 crossover event with Overwatch in China helped expand the game's reach, connecting two distinct player communities. Sword of Justice maintained a vibrant player community through rich content and a lively open world that continues to evolve.

Speaker #3: The title continues to enrich player interaction and creative gameplay experiences, introducing features such as text-to-item generation and in-game narrative creation. This innovation not only deepened player engagement but also fostered a thriving ecosystem of user-generated content, strengthening player connections.

Speaker #3: Innovation is a driving force for content creation in our existing portfolio, as well as our games under development. New titles in our pipeline remain on track.

Bill Pang: New titles in our pipeline remain on track, with Sea of Remnants and Ananta making steady progress towards launch. Both titles are designed with a clear intent to deliver all-new player experiences and explore gameplay directions that have the potential to shape future trends. Feedback from Sea of Remnants' latest round of testing was positive, and we're in the final stages of preparation ahead of launch. As for Blizzard titles, their popularity was reinforced through diversified live service operations and localized content in Q1. World of Warcraft launched its Midnight expansion in China on 3 March, alongside the global release, bringing players back to the Elwynn Forest. With the continued deepening of our localized operations in China, we have implemented extensive optimizations and dedicated live ops events tailored to the China market.

Speaker #3: With sea of developments and Ananta, making steady progress towards launch. Both titles are designed with a clear intent: to deliver all new player experiences and explore gameplay directions that have the potential to shape future trends.

Speaker #3: Feedback from Sea of Developments' latest round of testing was positive, and we're in the final stages of preparation ahead of launch. As for Blizzard titles, their popularity was reinforced through diversified live service operations and localized content in the first quarter.

Speaker #3: World of Warcraft launched its midnight expansion in China on March 3rd, alongside the global release. Bringing players back to the Elven Kingdom, with a continued deepening of our localized operations in China we have implemented extensive optimizations and dedicated live ops events tailored to the China market.

Speaker #3: This effort has successfully sustained high-level player retention and engagement, leading to solid year-on-year commercial performance in the first quarter. In April, Diablo IV launched its Lord of Hatred expansion, simultaneously across China and the global market.

Bill Pang: These efforts have successfully sustained a high level of player retention and engagement, leading to a solid year-on-year commercial performance in Q1. In April, Diablo IV launched its Vessel of Hatred expansion simultaneously across China and global markets. Meanwhile, Diablo II: Resurrected, a title with a 20-year legacy, reignited its player base with a new DLC. This update drove a strong increase in monthly active users in Q1, further reflecting its enduring appeal. In February, Overwatch and Naraka: Bladepoint collaborated on two-week crossover events featuring character integration and themed skins. Combined with the Spring Festival themed content, the event generated strong cross-community engagement and elevated player activity. With strong user engagement in Q1, daily active users grew with key builds while showing improved stability. Through strong partnerships and sustained engagement across our growing portfolio, we're well-positioned heading into the rest of the year.

Speaker #3: Meanwhile, Diablo II: Resurrected, a title with a 20-year legacy, reignited its player base with a new DLC. This update drove a strong increase in monthly active users in the first quarter, further demonstrating its enduring appeal.

Speaker #3: In February, Overwatch and Naraka Baypoint collaborated on a 2v crossover event featuring character integration and Steam skins. Combined with the Spring Festival Steam content, the event generated strong cross-community engagement and elevated player activity.

Speaker #3: With strong user engagement in Q1, daily active users grew with key bids, while showing improved stability. Through strong partnerships and sustained engagement across our growing portfolio, we are well-positioned heading into the rest of the year.

Speaker #3: With continued investment in innovation, an unwavering commitment to quality, and deep-rooted operational expertise, we aim to create unique and unforgettable gaming experiences for players in China and around the world.

Bill Pang: With continued investment in innovation, an unwavering commitment to quality, and deep-rooted operational expertise, we aim to create unique and unforgettable gaming experiences for players in China and around the world. Turning to our other businesses. Youdao further advanced its AI-native strategy in Q1 by driving continued iteration on its Confucius large language model and more deeply embedding AI throughout its ecosystem. The learning services segment made steady progress, supported by strong growth in Youdao Lingxi and AI-driven subscription offerings. Youdao also enriched its AI agent matrix, adding two new AI-native applications, LobsterAI, an open-source personal AI desktop assistant, and Youdao Baoku, an AI-native knowledge base designed for complex information synthesis. Online marketing services benefited from increased demand for performance-based advertising as AI-driven tools enhanced the targeting and streamlined content production, while the smart devices segment maintained its physical discipline, prioritizing SKU profitability over volume.

Speaker #3: Turning to our other businesses, without further advance, its AI-native strategy in the first quarter by driving continued iteration on its Confucius Large Language Model and more deeply embedding AI through its ecosystem.

Speaker #3: The learning services segment made steady progress, supported by strong growth in Yuedao Lingxi and AI-driven subscription offerings. Yuedao also enriched its AI agent matrix, adding two new AI-native applications: Lobster AI and Assistant, and Yuedao Baoku, an AI-native knowledge base designed for complex information synthesis.

Speaker #3: Online marketing services benefited from increased demand for performance-based advertising, as AI-driven tools enhance the targeting and streamlined content production. While the smart devices segment maintained its physical discipline, prioritizing SKU profitability over volume.

Speaker #3: Yanxiang celebrated its 10th anniversary this year, marking a decade of dedication to high-quality products. As part of this effort, we continue to build out our pet category, strengthening capabilities across R&D, supply chain, quality control, and membership operations.

Bill Pang: Yanxuan celebrated its 10th anniversary this year, marking a decade of dedication to high-quality products. As part of this effort, we continue to build out our pet category, strengthening capabilities across R&D, supply chain, quality control, and membership operations. Yanxuan maintained a consistent execution across key categories in Q1 with pet food, home scents, and home goods continuing to introduce new products and securing leading positions in their segment across e-commerce platforms. Additionally, sustainable development remains a core focus for NetEase. We believe long-term success of a company is intertwined with the value it creates for users, for communities, and employees. Earlier today, we published our seventh annual ESG report, outlining our latest progress across sustainability, governance, and social impact.

Speaker #3: Yanxiang maintained a consistent execution across key categories in the first quarter, with pet food, home stands, and home goods continuing to introduce new products and securing leading positions in their segments across e-commerce platforms.

Speaker #3: Additionally, sustainable development remains a core focus for NetEase. We believe long-term success of a company is intertwined with the value it creates for users, for communities, and employees.

Speaker #3: Earlier today, we published our seventh annual ESG report, outlining our latest progress across sustainability, governance, and social impact. As our business continues to grow and evolve, we stand steadfast alongside our employees, who share our values and dedication to continuous innovation and a passion in service of our users.

Bill Pang: As our business continues to grow and evolve, we stand steadfast among our employees who share our values and the dedication to continuous innovation and a passion in service of our users. We provide resources and opportunities for them to develop, strive, and keep innovating. By focusing on these kind of initiatives, we have once again been included in the World's Best Employers list published by Forbes, marking 9 consecutive years for our company. We're also mindful of social impact of our technology and strive to integrate corporate social responsibilities into product innovation and business practices, extending the accessibility and inclusiveness of technology. On the environmental side, while our online business by nature has relatively low carbon footprint, we nonetheless actively explore ways to make our operation even greener and cleaner.

Speaker #3: We provide resources and opportunities for them to develop, strive, and keep innovating, by focusing on this kind of initiatives. We have once again been included in the world's best employer list published by Forbes.

Speaker #3: Marking nine consecutive years for our companies. We're also mindful of social impact of our technology and strive to integrate corporate social responsibilities into product innovation and business practices.

Speaker #3: Extending the accessibility and inclusiveness of technology, on the environmental side, while our online business by nature has relatively low carbon footprint, we nonetheless actively explore ways to make our operation even greener and cleaner.

Speaker #3: For example, we have improved energy efficiencies across our data centers and campuses, helping reduce greenhouse gas emissions by 12% year over year. On the governance side, we continue to improve our board and management oversight on material issues.

Bill Pang: For example, we have improved energy efficiencies across our data centers and campuses, helping reduce greenhouse gas emission by 12% year over year. On the governance side, we continue to improve our board and management oversight on material issues. External recognition continues to reflect this progress. MSCI upgraded us to a AAA ranking, positioning us as a leader among over 200 companies in the global media and entertainment industry. While Sustainalytics maintained our low risk rating with improved profile, placing us among the top companies in our industry. In closing, across our businesses, our operations, and our development pipeline, we're seeing results from our long-held commitment to creativity, innovation, and the evolving technologies that power it. We see this momentum building as established titles continue to set new record, new titles advance towards launch with clear ambition, and our international footprint continues to grow.

Speaker #3: External recognition continues to reflect this progress. MSCI upgraded us to a AAA ranking, positioning us as a leader among over 200 companies in the global media and entertainment industry.

Speaker #3: While sustained analytics maintained our low risk rating, with improved profile, placing us among the top companies in our industry. In closing, across our businesses, our operations, and our development pipeline, we're seeing results from our long-held commitment to creativity, innovation, and the evolving technologies that power it.

Speaker #3: We see this momentum building as established titles continue to set new records, new titles advance towards launch with clear ambition, and our international footprint continues to grow.

Speaker #3: Woven through all of it is our ongoing effort to build an environment where our developers are free to push creative boundaries and deliver experiences that renaissance with players' communities around the world.

Bill Pang: Woven through all of it is our ongoing effort to build an environment where our developers are free to push creative boundaries and deliver experiences that resonates with players' communities around the world. We believe we're still in the early stages of what this can deliver for our players, our communities, and shareholders alike. That concludes William's comments. I will turn the call over to Aileen for more detailed discussion of our financial results. Thank you.

Speaker #3: We believe we're still in the early stages of what this can deliver for our players, our communities, and shareholders alike. That concludes William's comments, and I will turn the call over to Eileen for more detailed discussions of our financial results.

Speaker #3: Thank you.

Aileen Bin Mo: 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. Hello. Thank you, Bill. I will now provide a brief review of our 2026 Q1 results. Given the limited time of today's call, I will present some 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. Our total net revenue for Q1 were RMB 30.6 billion or USD 4.4 billion, representing a 6% increase year-over-year. Total net revenue from our games and related virtual asset services were RMB 25.7 billion, up 7% year-over-year. Specifically, net revenue from online games were RMB 25.1 billion, up 18% quarter-over-quarter and 7% year-over-year.

Aileen Mo: 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. Hello. Thank you, Bill. I will now provide a brief review of our 2026 Q1 results. Given the limited time of today's call, I will present some 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. Our total net revenue for Q1 were RMB 30.6 billion or USD 4.4 billion, representing a 6% increase year-over-year. Total net revenue from our games and related virtual asset services were RMB 25.7 billion, up 7% year-over-year. Specifically, net revenue from online games were RMB 25.1 billion, up 18% quarter-over-quarter and 7% year-over-year.

Speaker #1: Financial highlights. We encourage you to listen to our past release issued earlier today for further details. As a reminder, all amounts are in R&D unless otherwise stated.

Speaker #2: Yeah, just do that.

Speaker #1: Hello. Thank you, Bill. I will now provide a brief review of our 2026 first quarter results. Given the limited time of today's call, I will present some abbreviated financial highlights.

Speaker #1: We encourage you to listen to our past release issued earlier today for further details. As a reminder, all amounts are in R&D unless otherwise stated.

Speaker #1: Our total net revenue for the first quarter was R&D $30.6 billion, or USD $4.4 billion. Representing a 6% increase year over year. Total net revenue from our games and related value asset services was R&D $25.7 billion, up 7% year over year.

Speaker #1: Specifically, net revenue from online games was R&D $25.1 billion, up 18% quarter over quarter, and 7% year over year. The quarter over quarter and year over year increase in online game net revenue was attributable to higher net revenue from self-developed games such as Fantasy Retro General Franchise and Rare Witness.

Aileen Bin Mo: The quarter over quarter and year over year increase in online game net revenue were attributable to higher net revenue from self-developed games such as Fantasy Westward Journey and Where Winds Meet. Youdao's net revenue increased 4% year over year to RMB 1.3 billion, primarily driven by increased net revenue from Youdao's online marketing services. Its net revenue was down 14% quarter over quarter due to decreased net revenue from Youdao's lending services and the smart devices. NetEase Cloud Music net revenue was RMB 2 billion, representing a 7% year-over-year increase and remaining broadly stable quarter over quarter. Net revenue from innovative business and others were RMB 1.5 billion, decreasing 5% year over year and 24% quarter over quarter. The quarter over quarter decrease was mainly driven by declines across e-commerce and the advertising services.

Aileen Mo: The quarter over quarter and year over year increase in online game net revenue were attributable to higher net revenue from self-developed games such as Fantasy Westward Journey and Where Winds Meet. Youdao's net revenue increased 4% year over year to RMB 1.3 billion, primarily driven by increased net revenue from Youdao's online marketing services. Its net revenue was down 14% quarter over quarter due to decreased net revenue from Youdao's lending services and the smart devices. NetEase Cloud Music net revenue was RMB 2 billion, representing a 7% year-over-year increase and remaining broadly stable quarter over quarter. Net revenue from innovative business and others were RMB 1.5 billion, decreasing 5% year over year and 24% quarter over quarter. The quarter over quarter decrease was mainly driven by declines across e-commerce and the advertising services.

Speaker #1: 有这个 net revenue increase 4% year over year to R&D $1.3 billion. Primarily driven by increased net revenue from 有这个 online marketing services. Its net revenue was done 14% quarter over quarter due to decreased net revenue from 有这个 learning services and the smart devices.

Speaker #1: NetEase Cloud Music net revenue was R&D $2 billion, representing a 7% year over year increase and remaining broadly stable quarter over quarter. Net revenue from innovative business and others was R&D $1.5 billion, decreasing 5% year over year and 24% quarter over quarter.

Speaker #1: The quarter-over-quarter decrease was mainly driven by declines across e-commerce and the advertising services. Our gross profit margin increased year-over-year to 69.4% from 64.1% in the prior year period.

Aileen Bin Mo: Our gross profit margin increased year over year to 69.4% from 64.1% in the prior year period. Looking at our Q1 margin in more detail. Gross profit margin was 74.8% for our games and related value-added services, compared with 68.8% in the same period of last year. The improvement was primarily driven by lower revenue sharing costs related to the platform. Our gross profit margin for Youdao was 44.7%, compared with 47.3% in the same period of last year. The decrease was mainly due to the decline in smart devices gross margin. Gross profit margin for NetEase Cloud Music was 37.1%, compared with 36.7% in the same period of last year, remaining generally stable year over year. For our innovative business and others, gross profit margin was 42%, compared with 38.8% in Q1 2025.

Aileen Mo: Our gross profit margin increased year over year to 69.4% from 64.1% in the prior year period. Looking at our Q1 margin in more detail. Gross profit margin was 74.8% for our games and related value-added services, compared with 68.8% in the same period of last year. The improvement was primarily driven by lower revenue sharing costs related to the platform. Our gross profit margin for Youdao was 44.7%, compared with 47.3% in the same period of last year. The decrease was mainly due to the decline in smart devices gross margin. Gross profit margin for NetEase Cloud Music was 37.1%, compared with 36.7% in the same period of last year, remaining generally stable year over year. For our innovative business and others, gross profit margin was 42%, compared with 38.8% in Q1 2025.

Speaker #1: Looking at our first quarter margin in more detail, profit margin was 17.8% for our games and related value-added services. Compared with 68.8% in the same period of last year, the improvement was primarily driven by lower revenue sharing costs related to the platforms.

Speaker #1: Our gross profit margin for 有这个 was 44.7% compared with 47.3% in the same period of last year. The decrease was mainly due to the decline in smart devices gross margin.

Speaker #1: Gross profit margin for NetEase Cloud Music was 37.1%, compared with 36.7% in the same period of last year, remaining generally stable year over year.

Speaker #1: For our innovative business and others, gross profit margin was 42% compared with 38.8% in the first quarter of 2025. The improvement was primarily driven by margin extension in certain innovative business within the segment.

Aileen Bin Mo: The improvement was primarily driven by margin expansion in certain innovative business within the segment. Total operating expenses for Q1 were RMB 8.6 billion, representing 28% of our net revenue. Taking a closer look at our cost composition. Our selling and marketing expenses accounted for 11.2% of total net revenues in Q1, compared with 9.4% in the same period last year, primarily due to the increased marketing expenses related to games and the related VAS. Our G&A expenses accounted for 2.1% of the total net revenue in Q1, compared with the 3.3% in the same period last year. Our R&D expense remained stable at 14.7% of total net revenue in Q1, compared with 15.2% in the same period last year, reflecting our consistent investment in innovation and content development. The effective tax rate was 18.9% for Q1.

Aileen Mo: The improvement was primarily driven by margin expansion in certain innovative business within the segment. Total operating expenses for Q1 were RMB 8.6 billion, representing 28% of our net revenue. Taking a closer look at our cost composition. Our selling and marketing expenses accounted for 11.2% of total net revenues in Q1, compared with 9.4% in the same period last year, primarily due to the increased marketing expenses related to games and the related VAS. Our G&A expenses accounted for 2.1% of the total net revenue in Q1, compared with the 3.3% in the same period last year. Our R&D expense remained stable at 14.7% of total net revenue in Q1, compared with 15.2% in the same period last year, reflecting our consistent investment in innovation and content development. The effective tax rate was 18.9% for Q1.

Speaker #1: Total operating expenses for the first quarter were R&D $8.6 billion, representing 28% of our net revenue. Taking a closer look at our cost composition, our selling and marketing expenses accounted for $11.2% of total net revenues in the first quarter, compared with $9.4% in the same period last year.

Speaker #1: Primarily due to the increased marketing expenses related to games and related VAS. Our G&A expenses accounted for $2.1% of the total net revenue in the first quarter, compared with the $3.3% in the same period last year.

Speaker #1: Our R&D expense remained stable at $14.7% of total net revenue in the first quarter. Compared with $15.2% in the same period last year, reflecting our consistent investment in innovation and content development.

Speaker #1: The effective tax rate was 18.9% for the first quarter. As a reminder, the effective tax rate is presented on an accrual basis. And the tax credit varies across each hour entity at different time periods.

Aileen Bin Mo: As a reminder, the effective tax rate is presented on an accrual basis, and the tax practice vary across each of our entities at different time periods, depending on applicable policies and our operations. Our non-GAAP net income attributable to the shareholder for Q1 totaled RMB 11.3 billion, or USD 1.6 billion, broadly stable year-over-year. Non-GAAP basic earnings per ADS for the quarter was $2.56 or $0.51 per share. Additionally, our cash position remains strong. As of 31 March 2026, our net cash position was RMB 167.5 billion, compared with RMB 163.5 billion at the end of 2025. In accordance with our dividend policy, we are pleased to report that our board of directors has approved a dividend of $0.144 per share or $720 per ADS for Q1.

Aileen Mo: As a reminder, the effective tax rate is presented on an accrual basis, and the tax practice vary across each of our entities at different time periods, depending on applicable policies and our operations. Our non-GAAP net income attributable to the shareholder for Q1 totaled RMB 11.3 billion, or USD 1.6 billion, broadly stable year-over-year. Non-GAAP basic earnings per ADS for the quarter was $2.56 or $0.51 per share. Additionally, our cash position remains strong. As of 31 March 2026, our net cash position was RMB 167.5 billion, compared with RMB 163.5 billion at the end of 2025. In accordance with our dividend policy, we are pleased to report that our board of directors has approved a dividend of $0.144 per share or $720 per ADS for Q1.

Speaker #1: Depending on ethical policies and our operations. Our non-gap net income attributable to the shareholder for the first quarter totaled R&D $11.3 billion, or USD $1.6 billion.

Speaker #1: Broadly stable year over year. Non-GAAP basic earnings per ADS for the quarter was $2.56, or $51 per share. Additionally, our cash position remained strong.

Speaker #1: As of March 31, 2026, our net cash position was RMB 167.5 billion, compared with RMB 163.5 billion at the end of 2025. In accordance with our dividend policy, we are pleased to report that our board of directors has approved a dividend of USD $14.4 per share, or USD $720 per ADS for the first quarter.

Speaker #1: Lastly, under our current USD $5 billion share repurchase program, we had repurchased approximately 23.2 million ADS as of March 31, 2026, for a total cost of approximately $2.1 billion.

Aileen Bin Mo: Lastly, under our current USD 5 billion share repurchase program, we have repurchased approximately 23.2 million ADS as of 31 March 2026, for a total cost of approximately USD 3.1 billion. Thank you for your attention. We would now like to open the call to your questions.

Aileen Mo: Lastly, under our current USD 5 billion share repurchase program, we have repurchased approximately 23.2 million ADS as of 31 March 2026, for a total cost of approximately USD 3.1 billion. Thank you for your attention. We would now like to open the call to your questions.

Speaker #1: Thank you for your attention. We would now like to open the call to your questions.

Speaker #3: 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 speakerphone, please pick up the handset to ask your question. Your first question comes from Lincoln Kong with Goldman Sachs.

Speaker #3: If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Lincoln Kong with Goldman Sachs.

Speaker #4: 谢谢关雨辰接受我的提问。那也非常恭喜咱们一季度取得很强劲的业绩。我的问题可能是两个关于新游戏方面。第一个就关于遗忘之海。可不可以请关雨辰再给我们分享一下遗忘之海最新的一个进度和目前的一些用户的反馈？这个产品在无论是玩法、商业化设计和付费模式上，最新有没有一些新的变化？全球或者是跨端的整体的上线的计划目前是如何的？第二个问题是关于无限大这边。其实是主要想知道咱们在这种开放世界的赛道上的一些竞争策略。尤其是这种偏二次元和生活模拟品类。其实今年同业也是有一些上线几款可能相对有点类似的新游以及后续年底也有GTA的大作。所以想请关雨辰再分享一下我们如何确保无限大能够顺利突围并去获取增量的一些用户。我自己翻译一下。 Thank you management for taking my question. Congrats on the very solid first quarter result. I have two questions related to the new games pipeline.

Lincoln Kong: 谢谢管理层接受我的提问。那也非常恭喜咱们一季度取得了很强劲的业绩。我的问题可能是两个，关于这个新游戏方面。第一个就关于《遗忘之海》，那可不可以请管理层再跟我们分享一下《遗忘之海》最新的进度和目前的一些用户的反馈，这个产品无论是玩法、商业化设计和付费模式上，最新有没有一些新的变化？那全球或者是跨端的整体的上线计划目前是如何的？第二个问题是关于《无限大》这边，主要是想知道咱们在开放世界这种赛道上的一些竞争策略，尤其是这种虚拟二次元和生活模拟品类。那其实今年同业也是有一些上线几款可能相对有点类似的这个新游，以及后续年底也有GTA的这个大作。所以想请管理层再分享一下，我们如何确保《无限大》能够顺利突围，并且获取增长的一些用户。我自己翻译一下。Thank you very much for taking my question.

Lincoln Kong: [Foreign language]

Lincoln Kong: Thank you very much for taking my question. Congrats on the very solid Q1 result. I have two questions related to the new games pipeline. It's on the Sea of Remnants. Could management share more detailed updates in terms of the latest progress of the game, especially along with how is the product's monetization design, gameplay, and user feedback has been changed over the past few months? What is the latest rollout schedule for global and across platforms? My second question is about Ananta. I wonder what's our competitive strategy in this sort of open-world type of genre. Specifically, we have seen a few of our peers has recently released some new titles a bit similar to Ananta, along with they're going to be a potential heavyweight blockbuster like GTA before the year-end. How does a company ensure our Ananta game can successfully break through the competition and capture incremental user growth?

Lincoln Kong: Congrats on the very solid Q1 result. I have two questions related to the new games pipeline. It's on the Sea of Remnants. Could management share more detailed updates in terms of the latest progress of the game, especially along with how is the product's monetization design, gameplay, and user feedback has been changed over the past few months? What is the latest rollout schedule for global and across platforms? My second question is about Ananta. I wonder what's our competitive strategy in this sort of open-world type of genre. Specifically, we have seen a few of our peers has recently released some new titles a bit similar to Ananta, along with they're going to be a potential heavyweight blockbuster like GTA before the year-end. How does a company ensure our Ananta game can successfully break through the competition and capture incremental user growth?

Speaker #4: First was on the Sea of Remnant. Could management share a more detailed update in terms of the latest progress of the game? Especially along with how is the product monetization design, gameplay, and user feedback has been changed over the past few months?

Speaker #4: And what is the latest rollout schedule for global and across platforms? My second question is about Enata. I wonder what's our competitor strategy in this sort of open world type of genre?

Speaker #4: Specifically, we have seen a few of our peers have recently released some new titles a bit similar to Enata. Along with they're going to be a potential heavyweights blockbuster like GTA before the year end.

Speaker #4: How does a company ensure or Enata game can successfully break through the competition and capture incremental user growth? 谢谢。

Lincoln Kong: 谢谢。

Speaker #5: 我来回答第一个问题。在过去两个月的遗忘之海技术测试中，我们收获了很多玩家的宝贵意见。目前项目组正在积极筹备即将到来的破小号测试。在这一轮的测试中，我们会展现更为全面的游戏世界以及更多玩法细节。以便充分为推进Q3的产品上线计划。商业化方面，我们会结合游戏整体玩法进行设计，围绕角色以及外观付费为核心，实现内容丰富而低负担的游戏体验。更多细节欢迎持续关注我们后面的测试和宣发详情。

Hu Zhipeng: 我来回答第一个问题。在过去两个月的《遗忘之海》技术测试中，我们收获了很多玩家的宝贵意见。目前项目组正在积极筹备即将到来的破晓号测试。在这一轮的测试中，我们会展现更为全面的游戏世界以及更多玩法细节，以便充分为推进Q3的产品上线做好准备。商业化方面，我们会结合游戏整体玩法进行设计，围绕角色以及外观付费为核心，实现内容丰富而低负担的游戏体验。更多细节欢迎持续关注我们后面的测试和宣发详情。

Zhipeng Hu: 我来回答第一个问题。在过去两个月的《遗忘之海》技术测试中，我们收获了很多玩家的宝贵意见。目前项目组正在积极筹备即将到来的破晓号测试。在这一轮的测试中，我们会展现更为全面的游戏世界以及更多玩法细节，以便充分为推进Q3的产品上线做好准备。商业化方面，我们会结合游戏整体玩法进行设计，围绕角色以及外观付费为核心，实现内容丰富而低负担的游戏体验。更多细节欢迎持续关注我们后面的测试和宣发详情。

Speaker #4: OK, I will translate the answer of the first question first. Thank you for question regarding Sea of Remnant. Following the technical test in February in the past months, we received valuable feedback from players.

Bill Pang: Okay, I will translate the answer of first question first. Thank you for your question regarding Sea of Remnants. Following the technical test in February, in the past months, we received valuable feedback from players, and our team is now actively preparing for the upcoming Dawnbreaker test. In this next round, we'll showcase a bigger picture of the in-game world and richer gameplay details as we work towards our targeted Q3 launch window. In terms of monetization, we're designing it as a natural extension of the overall gameplay, with characters at the heart of the experience and cosmetics customization as the core of our monetization design, keeping the experience rich but without too much burden. Please stay tuned for more details in our upcoming test and future announcements. Thank you.

Speaker #4: And our team is now actively preparing for the upcoming Dawnbreaker test. In this next round, we'll showcase a bigger picture of the in-game world and richer gameplay details, as we work towards our targeted Q3 launch window.

Speaker #4: In terms of monetization, we're designing it as a natural extension of the overall gameplay. With characters at the heart of the experience and cosmetics customization, as the core of our monetization design.

Speaker #4: Keeping the experience rich but without too much burden. Please stay tuned for more details in our upcoming test and future announcements. Thank you.

Speaker #5: 我来回答一下第二个问题关于无限大。首先是我们几个团队来讲这个问题。首先是关于竞争格局。我们一定竞争，那我们会更加关注于差异化。

Hu Zhipeng: 好，我来回答一下第二个问题，关于《无限大》。那么首先是我们几层在想这个问题，首先是关于竞争格局。那么关于竞争，我们会更加关注于差异化。2022年的开放世界赛道是非常拥挤，我们用户的选择经验也丰富。在换位角度来看，这恰恰说明了这个品类天花板是存在的，用户需求是真实的。竞争不是一个洪水猛兽，好的产品会把市场做大，而不是在固定饼上面去厮杀。其实我们要看《无限大》的定位。《无限大》选择的是都市开放世界的方向，这个IP塑造、叙事结构和都市生活玩法层面，与传统的开放世界RPG或二次元的动作游戏是有本质区别的。我们做的不是换皮，而是以一个现代都市为舞台，以生活体验为核心驱动的开放世界产品。这个方向的竞争点也不在于地图大小，或者是战斗的还原程度，而在于是否能让玩家真正生活在这个世界里。逛街、社交、探索、经营等都市感极强的体验的设计是我们的核心差异化。目前团队正在专注于打磨产品的内容质量，我们认为用户对创新且高质量的产品始终有强烈的渴望，最终决定产品成败的不是一些或者是仅有，而是产品是否能够提供独特且足够好的体验。那么我们宁可多花时间在品质上做到位，不敢当时交易不平衡的点。最后也是最重要的一点是我们无法把《无限大》定义为传统意义上的二次元游戏，希望在开放都市世界里的框架下面做出体验，突破现有对虚拟都市生活的自由生活的想象。这些年我们的美术风格、叙事调性、玩法设计都在面向更广泛的受众打开，而不是把位置框在一个固定的标签里面。总体来说，独特的都市开放世界定位，对内容品质的极致追求。

Zhipeng Hu: 好，我来回答一下第二个问题，关于《无限大》。那么首先是我们几层在想这个问题，首先是关于竞争格局。那么关于竞争，我们会更加关注于差异化。2022年的开放世界赛道是非常拥挤，我们用户的选择经验也丰富。在换位角度来看，这恰恰说明了这个品类天花板是存在的，用户需求是真实的。竞争不是一个洪水猛兽，好的产品会把市场做大，而不是在固定饼上面去厮杀。其实我们要看《无限大》的定位。《无限大》选择的是都市开放世界的方向，这个IP塑造、叙事结构和都市生活玩法层面，与传统的开放世界RPG或二次元的动作游戏是有本质区别的。我们做的不是换皮，而是以一个现代都市为舞台，以生活体验为核心驱动的开放世界产品。这个方向的竞争点也不在于地图大小，或者是战斗的还原程度，而在于是否能让玩家真正生活在这个世界里。逛街、社交、探索、经营等都市感极强的体验的设计是我们的核心差异化。目前团队正在专注于打磨产品的内容质量，我们认为用户对创新且高质量的产品始终有强烈的渴望，最终决定产品成败的不是一些或者是仅有，而是产品是否能够提供独特且足够好的体验。那么我们宁可多花时间在品质上做到位，不敢当时交易不平衡的点。最后也是最重要的一点是我们无法把《无限大》定义为传统意义上的二次元游戏，希望在开放都市世界里的框架下面做出体验，突破现有对虚拟都市生活的自由生活的想象。这些年我们的美术风格、叙事调性、玩法设计都在面向更广泛的受众打开，而不是把位置框在一个固定的标签里面。总体来说，独特的都市开放世界定位，对内容品质的极致追求。

Speaker #4: 2020年的开放世界赛道是非常拥挤，用户的选择空间也很丰富。但换个角度来看，这恰恰说明了这个品类的天花板是比较高的，用户需求是很强的。竞争模型和博弈，好的产品不打成做大，不是在固定一份去厮杀。其次我们是要看无限大的独特定位。无限大选择的是都市开放世界这个方向。这个IP塑造、叙事结构和都市生活玩法层面与传统的开放世界RPG或二次元的动作游戏是有本质区别的。我们做的不是换皮，而是以一个现代都市为舞台，以生活体验为核心驱动的开放世界产品。这个方向的竞争壁垒不在于地图大小或者是战斗的华丽程度，而在于是否能让玩家真正生活在这个世界里，逛街、社交、探索、经营等都市感极强的体验的设计是我们的核心差异化。目前团队正在专注于打磨产品的内容质量。我们认为用户对创新且高质量的产品始终有强烈的渴望，最终决定产品成败的不是商机或者是竞争力度，而是产品是否能够提供独特且足够好的体验。我们宁可多花时间在品质上做到位，也不敢放弃交易评论的作用。最后也是最重要的一点是我们无法把无限大定义为传统意义上的二次元游戏。希望在开放都市世界的框架上做出品类突破，吸引所有对虚拟都市生活、自由生活感兴趣的玩家。这就意味着我们的美术风格、叙事调性、玩法设计都在面向更广泛的受众玩家，而不是把自己框在一个固定的标签里面。总结来说，独特的都市开放世界定位，对内容品质的极致追求，不设限的用户视野，这是无限大的突围之道。竞争是相当激烈的，但是我们对我们的方向是有信心的。OK, let me translate this answer. First of all, thank you for your question. We addressed your question from several angles. First, regarding the competitive landscape, we do not shy away from competition, but our focus is more on differentiation.

Hu Zhipeng: 不设限的用户视野，这是无限大的。可以知道竞争是相当激烈，但是我们对我们的方向是清晰。

Zhipeng Hu: 不设限的用户视野，这是无限大的。可以知道竞争是相当激烈，但是我们对我们的方向是清晰。

Bill Pang: Okay, let me translate this answer. First of all, thank you for your question. We address your question from several angles. First, regarding the competitive landscape. We do not shy away from competition, but our focus is more on differentiation. Yes, open world category is crowded in 2026, and players have more choices than ever. From another angle, it also means that the genre has a high ceiling and strong user demand. Competition in our industry is not a zero-sum game. Great products expand the overall market, rather than just fighting over fixed market share. Secondly, what makes Ananta different? Ananta is built around an urban open world concept, which is fundamentally different from traditional open world RPGs or anime style action games. Whether you look at the IP building, the narrative structure, or gameplay design, we're not following existing formulas. What we are building is an open world set in modern city, driven by immersive daily living experiences. The competitive edge here is not about map size or flashy combat, it's about whether players can truly feel like they are living in the world. For example, shopping, social interactions, exploration, running businesses. These activities with their strong sense of urban life are where our differentiation really lies. Right now, the team is focused on refining the game's content quality. We believe players always have strong appetite for innovative and polished experiences. What decides whether products succeed is not the launch window or how many competitors are out there. It is whether or not the experience is distinctive enough and good enough to the players. We'd rather take the time to get it right than ship something average in a rush. Lastly, but importantly, we do not think Ananta is a traditional anime style game. Our goal is to achieve a genre breakthrough within the urban open world space, reaching players who are interested in the idea of freely living in the virtual city. This means that our art direction, our narrative tone, our gameplay design, are all being shaped to appeal to a broader audience, rather than putting ourselves in a fixed box. In summary, distinctive urban open world positioning, a relentless pursuit for content quality, and a broad, unconstrained vision for who this game is for. That's how Ananta stands out. The competition is real, but we are confident in the direction that we have chosen. Thank you. Next question, please.

Speaker #4: Yes, open world category is crowded in 2026, and players have more choices than ever. But from another angle, it also means that the genre has a high ceiling and strong user demand.

Speaker #4: Competition in our industry is not a zero-sum game. Great products expand the overall market rather than just fighting over fixed market share. Secondly, what Enata is built around an urban open world concept, which is fundamentally different from traditional open world RPGs or anime-style action games.

Speaker #4: Whether you look at the IP building, the narrative structure, or gameplay design, we're not following existing formulas. What we're building is an open world set in modern city driven by immersive daily living experiences.

Speaker #4: The competitive edge here is not about map size or flashy combat, it's about whether players can truly feel like they are living in the world.

Speaker #4: Shopping, for example, shopping social interactions, exploration, running businesses, these activities with their strong sense of urban life are where our differentiation really lies. Right now, the team is focused on refining the game's content quality.

Speaker #4: We believe players always have a strong appetite for innovative and polished experiences. What decides whether products succeed is not the launch window or how many competitors are out there.

Speaker #4: It is whether or not the experience is distinctive enough and good enough to the players. We'd rather take the time to get it right than ship something average in a rush.

Speaker #4: Lastly, but importantly, we do not think Enata is a traditional anime-style game. Our goal is to achieve a genre breakthrough within the urban open world space, reaching players who are interested in the idea of freely living in the virtual city.

Speaker #4: This means that our art direction, our narrative tone, our gameplay design are all being shaped to appeal to a broader audience rather than putting ourselves in a fixed box.

Speaker #4: In summary, distinctive urban open-world positioning, a relentless pursuit of content quality, and a broad, unconstrained vision for who this game is for—that's how Enata stands out.

Speaker #4: The competition is real, but we are confident in the direction that we have chosen. Thank you. Next question, please.

Speaker #1: Your next question comes from Zhu Qingzheng with CICC.

Operator: Your next question comes from Xueqing Zhang with CICC.

Speaker #2: 感谢管理层接受我提问。恭喜这个季度抢进的业绩。我的问题是关于全球化的。管理层如何展望公司游戏全球化的一个进展，尤其是如何看待1046深出海突破的空间，以及MMO游戏品类在海外的发展潜力。谢谢。Thanks management for taking my question and congratulations on the strong quarter. My question about globalization. While the management views the progress in global expansion and in particular, how do you assess the overseas growth potential of where winds meet?

Xueqing Zhang: 感谢管理层接受我提问，恭喜这个季度强劲的业绩。我的问题是关于全球化的，那管理层如何展望公司游戏全球化的进展？尤其是如何看待《燕云 16 声》出海突破的空间，以及 MMO 游戏品类在海外的发展潜力？谢谢。Thanks management for taking my question and congratulations on the strong quarter. My question about globalization. How does management feel the progress in global expansion? In particular, how to assess the overseas growth potential of Where Winds Meet, as well as the opportunities for the MMO genre in international markets. Thank you.

Speaker #2: As well as the opportunities for the MMO genre in international markets. Thank you.

Speaker #3: 燕云十六生出海展现出持续且强劲的生命力。从上线到目前已经有17个月了。上线半年Steam好评率稳定在87%，多次版本更新登上全球畅销搒前二。包含惯性认知武侠难以撬动欧美的市场，彻底打破了武侠品味出海记录。这充分说明海外玩家不仅认可燕云高度沉浸的武侠世界，也对免费高品质no play to win的商业化模块接受度极高。这也再次验证了燕云带来的是独一无二的游戏体验。在全球范围内都是硬通货。接下来我们会进一步释放燕云在海外的增长潜力。继续挖掘多端适配和全球发行的能力，推进更多的平台上架以及市场本地化。很快大家就会看到相关的消息。总之，我们会持续投入大量资源，把燕云十六生打造成网易布局海外的又一块金字招牌。追求全球范围的基业长青。谢谢。

Hu Zhipeng: 《燕云16声》出海展现出持续且强劲的生命力，从上线到目前已经有17个月了。上线半年Steam好评率稳定在87%，多次版本更新登上全球畅销榜前二。包含惯性认知武侠难以撬动欧美的市场，彻底打破了武侠品类出海记录。这充分说明海外玩家不仅认可《燕云》，高度沉浸在武侠世界，也对免费高品质no play to win的商业化模块接受度极高。这也再次验证了《燕云》带来的是独一无二的游戏体验，在全球范围内都是硬通货。接下来我们会进一步释放《燕云》在海外的增长潜力，继续挖掘多端适配和全球发行的能力，推进更多的平台上线以及市场本地化。很快大家就会看到相关的消息。总之，我们会持续投入大量资源，把《燕云16声》打造成网易布局海外的又一块金字招牌，追求全球范围的基业长青。谢谢。

Zhipeng Hu: 《燕云16声》出海展现出持续且强劲的生命力，从上线到目前已经有17个月了。上线半年Steam好评率稳定在87%，多次版本更新登上全球畅销榜前二。包含惯性认知武侠难以撬动欧美的市场，彻底打破了武侠品类出海记录。这充分说明海外玩家不仅认可《燕云》，高度沉浸在武侠世界，也对免费高品质no play to win的商业化模块接受度极高。这也再次验证了《燕云》带来的是独一无二的游戏体验，在全球范围内都是硬通货。接下来我们会进一步释放《燕云》在海外的增长潜力，继续挖掘多端适配和全球发行的能力，推进更多的平台上线以及市场本地化。很快大家就会看到相关的消息。总之，我们会持续投入大量资源，把《燕云16声》打造成网易布局海外的又一块金字招牌，追求全球范围的基业长青。谢谢。

Speaker #4: OK, let me translate this answer. Where winds meet has demonstrated very strong and sustained momentum in this global expansion. Within six months of launch, it has held very high scores like 78% positive rating on Steam and has repetitively ranked among top two on Steam's global top seller chart when we have major updates.

Bill Pang: Okay, let me translate this answer. Where Winds Meet has demonstrated very strong and sustained momentum in this global expansion. Within 6 months of launch, it has held very high scores like 78% positive rating on Steam, and has repetitively ranked among top 2 on Steam's global top seller chart when we have a major update, including West market that have traditionally been difficult for Chinese Wuxia game to penetrate. This has set a new benchmark for this genre overseas. This clearly shows that overseas players not only appreciate the game's high immersive Wuxia world, but also are highly receptive to the free-to-play, high quality, and no pay-to-win model. Once again, it reinforces that the unique experiences delivered by Where Winds Meet is something that resonates globally. Going forward, we'll continue to unlock the game's overseas growth potential by enhancing cross-device compatibilities, strengthening global publishing capabilities, expanding onto more platforms, and deepening localization efforts.

Speaker #4: Including Western market that have traditionally been difficult for Chinese wuxia games to penetrate. This has set a new benchmark for this genre overseas. This clearly shows that overseas players not only appreciate the game's high immersive wuxia world, but also highly receptive to the free-to-play high-quality and no pay-to-win model.

Speaker #4: Once again, it reinforces that the unique experiences delivered by Where Winds Meet is something that resonates globally. Going forward, we'll continue to unlock the potential— the overseas growth potential— by enhancing cross-device capabilities, strengthening global publishing capabilities, expanding onto more platforms, and deepening localization efforts.

Speaker #4: More updates on this will be shared soon. In short, we'll continue to invest resources into Where Winds Meet, making it another flagship title in our global portfolio.

Bill Pang: More updates on this will be shared soon. In short, we'll continue to invest resources into Where Winds Meet, making it another flagship title in our global portfolio, with the goal of achieving long-term sustainable success worldwide. Thank you. Next question, please.

Speaker #4: With the goal of achieving long-term sustainable success worldwide. Thank you. Next question, please.

Speaker #1: Your next question comes from Richie Sun with HSBC.

Operator: Your next question comes from Ritchie Sun with HSBC.

Speaker #5: Hi. 感谢管理层接受我的提问。也恭喜咱们非常强劲的业绩。我想问一下梦幻西游的情况。自从PC版推出畅玩服以来，已经接近一年的时间。管理层能否分享一下这个产品最新的近况？未来下一步将如何维持，甚至是进一步扩大改版之后带来的成功？ Thank you, management, for taking my question. Congrats on a very good set of results. I want to ask about FWJ PC. The PC version has launched the unlimited server close to one year now.

Ritchie Sun: Thank you, management, for taking my question. Congrats on a very good set of results. I want to ask about FWJ PC. The PC version has launched Unlimited server close to 1 year now. Can management share the latest update on this game and how do you plan to further sustain or even expand the successful response from this game going forward?

Speaker #5: Can management share the latest update on this game, and how do you plan to further sustain, or even expand, the successful response from this game going forward?

Speaker #3: 梦幻西游电脑版在Q1刷新了390万的同时在线记录，已经可以说明畅玩服的推出是有效的拓展了用户的规模。除了畅玩服本身取得成功外，时间服的用户规模也在稳定提升。得益于开发团队多年的长线运营经验，目前整个游戏生态系统稳定且各项数据向好。我们始终坚持长线运营思路，同时探索更多的可能性。谢谢。

Speaker #4: Yeah, thanks a lot. Journey Online hit another record of peak concurrent users at 3.9 million in Q1, which clearly shows that the Unlimited server has successfully expanded the player base.

Bill Pang: Fantasy Westward Journey Online hit another record of peak concurrent user as 3.9 million in Q1, which clearly shows that the Unlimited server has successfully expanded the player base. Beyond the strong performance of the Unlimited server, the time-based classic server has also been growing steadily. With the development team's years of experience in long-term live operations, the overall game ecosystem is in good shape, with all key metrics trending in the right direction. We remain committed to the long-term operation strategy and keep exploring new opportunities along the way. Thank you.

Speaker #4: Beyond the strong performance of the unlimited server, the time-based classic server has also been growing steadily. With the development team's years of experience in long-term live operations, the overall game ecosystem is in good shape.

Speaker #4: With all key metrics trending in the right direction, we remain committed to the long-term operation strategy and keep exploring new opportunities along the way.

Speaker #4: Thank you.

Speaker #1: And that concludes the question and answer session. I would like to turn the conference back over to Brandi Piacenti for any closing additional comments.

Operator: That concludes the question and answer session. I would like to turn the conference back over to Brandi Piacente for any closing additional comments.

Brandi Piacente: Thank you once again for joining us today. If you have any further questions, please feel free to contact us directly. Have a wonderful day. Thank you.