China Galaxy Securities: Summer box office closes with a slight increase year-on-year, gaming industry remains highly prosperous.

China Galaxy Securities released a research report stating that with the continuous iteration of the underlying large model capabilities, the current AI applications have initially laid the technological groundwork for development. The exploration of AI in various industries is continuously expanding, and the practical application of AI will bring revolutionary effects to most industries. The commercial progress in the B-end is accelerating, particularly evident in the media sector, where overseas AI technology started early and commercial applications have matured relatively. In addition, the game market has maintained high prosperity since the summer of 2024, with major game companies' new game launches performing impressively. Considering the deferred revenue effect of later game revenue and the expectation of the excellent performance of new game launches to continue, the firm believes that the performance of these companies is expected to achieve sustained growth by 2025. The main points of China Galaxy Securities are as follows: - The summer box office season ended with a year-on-year increase in box office revenue. - According to Lighthouse Pro Edition, in August 2025, the total national box office revenue reached 5.991 billion yuan (including service fees), an increase of 48.59% year-on-year and 47.27% month-on-month. Specific film performances included "Nanjing Photography Studio" and "The Little Monster of Langlang Mountain," which contributed 1.984 and 1.44 billion yuan respectively, accounting for 33.1% and 24% of the monthly box office. Many films in the second half of the summer season made efforts, resulting in a slight recovery in the overall box office, with a total box office of 11.96 billion yuan (including service fees) during the summer season, a 2.7% increase year-on-year. - The game market continues to grow steadily, with a noticeable acceleration in the scale of PC games. - According to Gamma Data: In July 2025, the actual sales revenue of the domestic game market was 29.084 billion yuan, an 8.14% year-on-year increase and a 4.62% month-on-month increase. The scale of the PC game market saw a significant increase in growth, at 5.866 and 6.637 billion yuan in June and July, respectively, year-on-year increases of 0.81% and 13.14%. Self-developed games' actual sales revenue in the overseas market was USD 1.693 billion, an 8.18% year-on-year increase. Among products, "Delta Force" once again topped the list, with new games "Doulou Continent: Soul Hunting World" and "Paper Wedding Dress 8000 Blossom Trees" entering the top 10. - Marketing expenditure remains stable and positive, with trends in segmented categories diverging. - Overall advertising expenditure in various industries in July 2025 increased by 1.5% year-on-year. In July, advertising expenditure increased by 6.8% year-on-year and 5.7% month-on-month, maintaining a stable and positive trend. The entertainment and leisure, telecommunications, and personal goods industries saw significant increases in advertising expenditure in January-July 2025, with year-on-year increases of 53.1%, 45%, and 30.8% respectively. - Multiple large model updates in August, continuous advancement of AI applications. - On the overseas front, on August 5th, Google DeepMind released the Genie3 world model; on August 8th, OpenAI released the G.P.T-5 integrated large model. On the domestic front, in August, Alibaba's Qwen3 was updated, and new features of Qwen-image will be launched; on August 21st, Deepseek-V3.1 was released. The firm believes that the continuous updating of large models will accelerate the iteration of many underlying technologies on the technical side, laying the foundation for AI applications, agent constructions, etc.; related deep applications are expected to possess autonomous decision-making and task execution capabilities, which can improve work efficiency, optimize resource allocation, deeply integrate personalized services, intelligent decision-making, and other scenarios, becoming a key carrier driving the transformation of social production efficiency. Risk warning: - Risks of AI technology development progress being lower than expected; - Content regulation risks; - Risks of industry competition and technology application falling short of expectations.