China Great Wall: By 2025, the scale and number of users in our country's gaming industry will reach a new high, while ARPU will maintain an upward trend.

China Great Wall released a research report stating that compared to the payment situation of foreign game users, there is still a high growth potential for the average payment per game user in China. According to Gamelook, it is estimated that by 2025, the annual game expenditure per paying player in the United States will reach $324.9; while in Japan, the average game consumption per player in 2024 will be 2144 RMB. Looking ahead, the ARPU of game users in China is expected to benefit mainly from (1) policies encouraging the improvement of the quality of games, driving the increase in the payment rate and willingness of game users; (2) with the increase in the issuance of game licenses, the improvement in game supply will continue to boost demand in the game industry; (3) with the continuous recovery of the macro economy, games as optional consumption will benefit from the growth in per capita disposable income. The main points of China Great Wall are as follows: Policy improvements support the supply side of the game industry, encouraging games to go global. After the fluctuations in the game industry policies from 2021-2023, China's game policies have improved marginally. In 2025, the State Administration of Press and Publication has issued a total of 1771 game licenses (including 95 import game licenses and 1676 domestic game licenses), a 25% increase compared to 2024 and a significant 65% increase compared to 2023. The bank believes that this indicates that the domestic game policy environment has entered a new stage of stable support. The game industry is expected to continue to benefit from the expansion of licenses, driving stable and high-quality growth in the supply side, and the continued validation of the industry's stable upward fundamentals also demonstrates the potential of policy-friendly periods to unleash content. In addition, China's support for cultural globalization has developed into a systematic, multi-level national strategy to cultivate the industry's international competitiveness and influence. The bank believes that games are expected to become one of the key focuses of cultural globalization. As a result, in 2025, the actual sales revenue of self-developed games in overseas markets in China reached $20.455 billion, an increase of 10.23% year-on-year. Mini-program games maintain high-speed growth, with multiple policy catalysts driving the track upwards. In 2025, the domestic mini-program game market revenue reached 53.535 billion yuan, a year-on-year increase of 34.39%, maintaining high-speed growth on the basis of a high base. Apple and Tencent reached an agreement in November 2025 that Apple's commission for payments within WeChat mini-games and mini-programs will be 15%. The standardization of payment in mini-program games is expected to increase. Previously, the payment process for mini-program games on the Apple side was longer, leading many Apple users to choose the App side, where the 30% share of Apple in App is higher than the 15% in the mini-program. The bank believes that with a smooth payment process, the number of iOS mini-program users is expected to increase, boosting the profitability of related companies. In addition, WeChat mini-games further enhance incentives for new games, formally upgrading the IAP (in-app purchases) policy for mini-games from January 1, 2026. For games released during the initial period, after reaching a certain scale of revenue, the platform and developers' profit-sharing ratio will be optimized from the original 3:7 to 2:8, further tilting towards developers, supporting them to focus on content creation and user experience optimization, achieving a positive business cycle. AI empowers the entire process of game production, reshaping game interactive experiences. AI reconstructs the entire cycle of game development, promotion, and operation, reshaping game interactive experiences: (1) Development: With the help of AI, the character animation production cycle of Tencent's Photon Studio has been shortened by 40%, and the validation time of character skills prototypes in some project teams has been compressed from 2 weeks to 3 days; (2) AI can generate corresponding marketing materials (images, videos, etc.), and accurately carry out advertising plans; for example, 37 Interactive Entertainment Network Technology Group has reached a proportion of 50% of total advertisements through AI, helping to improve the efficiency of advertising by 70%; (3) Operation: In the operation process, AI can act as an intelligent customer service role, providing players with more efficient and intelligent service experiences; it can also provide a more intelligent material risk detection and solution for external copyright infringement, improving material review efficiency; (4) AI gameplay reshapes game interactive experiences: AI-assisted gameplay and AI-native games have continued to be implemented, such as Giant Network Group's collaboration with the top three modeling companies in China to introduce "Endgame Showdown" and other AI-native gameplay; Kingnet Network launched the AI-native application "EVE" that integrates Vibe for emotional conversation and Echo for memory, achieving a comprehensive personalized immersive experience in language, vision, and emotion. Relevant targets: TENCENT, NTES-S, XD INC, Giant Network Group, 37 Interactive Entertainment Network Technology Group, Zhejiang Century Huatong Group, G-bits Network Technology, Kingnet Network, NEWBORNTOWN, etc. Risk warnings: Industry policy risks; intensification of industry competition; economic recovery falling short of expectations; new product launch progress falling short of expectations.