NetEase Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 14, 2025

Key Takeaways

  • Positive Sentiment: Q2 Financial Strength: NetEase reported a 9.4% year-over-year revenue increase to RMB 27.9 billion and a 22% rise in non-GAAP net income, supported by robust game and VAS growth.
  • Positive Sentiment: New Game Momentum: Titles like “Mystery & Mayhem” and “Frank Punk” quickly climbed to top download charts globally, showcasing strong engagement and international reach.
  • Positive Sentiment: Evergreen Franchise Success: Long-running games such as Fantasy Westward Journey Online hit a record 2.93 million peak concurrent users, while titles like Identity V and Once Human saw revenue rebounds.
  • Neutral Sentiment: Rich Development Pipeline: Upcoming releases—including AAA single-player “Blood Message” and cross-platform RPG “Sea of Venomance”—are in testing or production, positioning NetEase for future growth.
  • Positive Sentiment: Non-Gaming Business Progress: Youdao achieved its first Q2 operating profit with AI-driven offerings, and NetEase Cloud Music saw healthy subscription and monetization gains.
AI Generated. May Contain Errors.
Earnings Conference Call
NetEase Q2 2025
00:00 / 00:00

There are 8 speakers on the call.

Operator

Good day, and welcome to the NetEase Second Quarter twenty twenty five 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

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.

Speaker 1

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 Nendez'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. 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 twenty twenty five second quarter earnings news release issued earlier today.

Speaker 1

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' senior management are Mr. William Ding, Chief Executive Officer and Mr. Bill Peng, Vice President of Corporate Development.

Speaker 1

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

Speaker 2

Thank you, Brandy, 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 RMB. 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.

Speaker 2

Building on our first quarter year on year growth momentum, revenue from our games and related VAS rose 14% in the second quarter compared to the same period 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. 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, Mystery and Mayhem launched on June 25.

Speaker 2

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 1,000,000, 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. The global release of our tactical shooter game, Frank Punk on Xbox and PlayStation quickly gained traction after its April 29 debut. In May, it reached number two spot on PlayStation's North America free to play download chart.

Speaker 2

Originally launched on PC in March, Frank Punk has been winning over players with its groundbreaking shortcut system. Now with the signature blend of strategy and high outtone shooting experience available on console, it continues to build momentum. Our commitment to growing the existing hits has also brought fresh energy to games already resonated with players. Once Human commemorated its annual version two point zero Dreamville, with a major content update and a series of exciting announcements. Players were introduced to Endless Dream, a new nightmare seen in the PVE scenario that takes them through multiple layers of Dreamscapes, offering a fresh take on the apocalyptic world.

Speaker 2

A new class system was also unveiled, featuring three classes, chef, the gardener, and beastmaster at the first play, each bringing unique abilities to support diverse play styles. This two point o 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 30 called Raid Zone, which amplifies the thrill of the game's survival open world experience. With unrestricted comeback, allowing attacks anytime, anywhere. This innovation targets our broader PVP audience through more intense and liberated battles.

Speaker 2

In June, we began testing a new customer server, allowing private servers and the customizable seasonal settings that encourage creativity and diversity, giving players even more autonomy. From our rivals, we launched a Season three on July 11, introducing Phoenix as a new playable hero alongside a slate of exciting events and team ups. Setting Clinton, where now Stock Day spreads, players join forces and unleash unique skills to save the world. With fast paced open comeback and the fan favorite Phoenix joined the rooster, 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. Beyond in game updates, we're also deepening community engagement through more offline events.

Speaker 2

As San Diego Comic Con, an exclusive behind the scene look at the hero creation process generated tremendous excitement among fans. In May, we also kicked off our Marvel Rivals Ignite Esports tournaments with Mi season finals successfully held at our Guangzhou campus recently. Partially 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 Wuxiang themed open world RPG, Where Wings Meet, continue to be impressed by our steady stream of high quality content.

Speaker 2

In the second quarter, we launched a new Suexi themed update, featuring the exotic desert landscape of Zhenghuang. The storyline centered on the unyielding spirit of both generals and ordinary citizens during the period of unrest resonated deeply with players. By restoring Asian fresh coals in game, in collaboration with Sunghua Art Academy, we brought emotional stories to life with stunning visual effect, further feeling player enthusiasm. By the July, ADAS amassed over 40,000,000 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 oversea testing on PC and PlayStation five at the July, placing us firmly on track for its global launch.

Speaker 2

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, 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. Dong City Dynasty also met global players on May 22, where it reached number one on iOS dollar chart in multiple regions and number two in The U. S.

Speaker 2

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 the content updates that stand the test of time. In May, Fantasy Westward Journey Online drew in strong interest from player community, which is How to Train Your Dragon collaboration, bringing the movies iconic costumes and dragon mounts into the game. 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 2,930,000, 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 2

Similarly, Fantasy Westward Journey Mobile launched a new faction, Pan Sidong, 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. The Once With Journey franchise struck an emotional core with players by launching a series of activities seen around the beloved romantic legend by Shizhuang, featuring themed gameplay, costumes and crossovers with the theme song, all tied to the twenty twenty five Year of Sling. Westward Journey Online two continues to fuel excitement through its annual PVP finals and content updates.

Speaker 2

While Westward Journey Mobile saw strong participation from both loyal and returning players through the launch of a new server. NightSouth continues to showcase our long term operational capabilities, maintaining its status as a household game in Japan through dedicated content updates and a culturally resonant collaborations. This quarter's crossover with Jujutsu Kaisen, the hit Japanese manga that captivates global audiences was met with strong player enthusiasm and propelled again to number three on Japan's iOS top grossing chart. Identity V once again broke its quarterly revenue record in the second quarter, 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 scene featuring immersive maps and new costumes.

Speaker 2

The crossover drove the game to number seven on China's iOS top crossing chart. Momentum continued in August, when the crossover was frequent beyond journeys end generated significant enthusiasm and propelled it to number four on China's iOS top crossing chart. For Aggie Party's third anniversary on June 27, we introduced a festive in game updates that transformed Eggie Island with candies, cakes and toys, adding new maps and equipment to deepen strategic gameplay. A wave of anniversary activities along with the highlighted highly anticipated crossover with Dongdong Shift sparked a strong player excitement and lifted Eggie Party to number five on China's iOS top grossing chart on July 11. The Naraka Blade Point franchise also hit another milestone.

Speaker 2

Its PC game entered its fourth year with brand new extraction mode and iconic IP crossovers, including Bruce Lee and the degenerated drawing Jianghu. The mobile game also introduced enhancements to extraction based survival feature with dynamic weather and a new mechanics. The update eagerness the player base and push the title to number six on China's iOS top glossing 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 twentieth anniversary of operation in China, unveiling plans to launch a China exclusive Titan Reforged server in November.

Speaker 2

This announcement reignited enthusiasm among local players and attracted significant attention from broader global community. Meanwhile, Hearthstone launched its latest expansion, the lost city of Angoro on July 9, featuring a brand new pass system. This new adventure invites players to embark on the quest set for the lost city with 145 platform card and a new Keywords Kindred to empower their decks. Shortly after the update, the game climbed to number five on China's iOS top crossing chart. In April, Overwatch launched its new stadium mode, which has been very popular with players.

Speaker 2

And in June, they introduced its seventeenth season, featuring a series of updates to power up the game experiences. At Bilibili World twenty twenty five, its collaboration with Porsche sparked more fun excitements, featuring a special in game skin of the iconic Porsche model. We are also thrilled to announce that Diablo II Resurrected will be returning to China on August 27, with plans for launch of Diablo IV underway. This will enhance the classic franchise for dedicated fan base. Innovation remains at the core of how we build and operate games.

Speaker 2

We bring the same creative ambition and operational rigor to every new titles and the developments. 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. Sea of Venomance, our upcoming cross platform ocean adventure RPG received encouraging feedback from its first testing at the June. The game invites players into an exciting open world exploration, where they uncover the truth behind a forgotten identity through exhilarating naval comebacks and turn based battles.

Speaker 2

Players recruit a crew of allies, build ships and interact with characters, adding strategic depths 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 Uprising as the Nameless Messenger and his young son. With immersive third person gameplay and powered by cutting edge technology, Black Message is designed to deliver an epic blockbuster experience for players worldwide.

Speaker 2

Planet Party Time, our cross platform game, blending social simulation and party gameplay has undergone a series of tests to further refine 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 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 Super Wow, an innovative competitive multiplayer game on PC that provides a unique blend of mobile, battle royale and huge shooter elements.

Speaker 2

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. The development for Anata, 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 keeps 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.

Speaker 2

As we continue rising the bar of the engagement and the 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, continued to drive product innovation with our proprietary LLM Confucius, while we continue to iterate other AI applications such as Mr. P, AI tutor.

Speaker 2

Gaining increasing user traction. The online marketing services, our newly launched AI advertisement placement optimizer, and end to end AI driven agentic solution covering demand analysts, strategy formation, data analytic 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 remain 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 2

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 Man. 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 Light Player, which is designed to recreate the immersive feel of a live concert. It has the with landscape orientation support received widespread acclaim from music lovers. We're constantly advancing our music centric monetization and further expanding our subscriber base, resulting in healthy growth in subscription based membership revenues.

Speaker 2

Turning to Yanchuan, we continue to maintain our leading position in key categories. For example, Yanxue HomeSense, such as bathroom frequency and car refreshers has been widely recognized by consumers, securing a solid market position with leading sales. Other iconic products such as pet food also maintained 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 users and stakeholders. 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.

Speaker 2

That concludes William's comments. I will now provide a brief review of our twenty twenty five second quarter 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. As a reminder, all amounts are in RMB unless otherwise stated.

Speaker 2

Total net revenue for the second quarter were RMB27.9 billion or US3.9 billion dollars representing a 9.4% increase year over year. Total net revenue from our games and related VAS were billion, up 14% year over year. Specifically, net revenues from online games were RMB22.1 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 Whirlwinds Meets and Marvel rivals, as well as established games like Identity V. The results net revenue were RMB1.4 billion, up 7% year over year and 9% quarter over quarter.

Speaker 2

This growth was primarily driven by the enhanced utilization of AI technology to boost our learning services and online marketing services. NetEase Cloud Music net revenue were RMB 2,000,000,000, up 6% from previous quarter, while declining 4% from same period last year. Notably, revenues from online music services maintained healthy development both quarter over quarter and year over year. Net revenue from innovative businesses and others were billion, up 5% from previous quarter, while declining 18% year over year. The quarter over quarter growth was primarily driven by Yanchuan, while the year over year decline was mainly due to decreased net revenue from Yanchuan advertising services and certain other businesses in this segment.

Speaker 2

Gross profit for the 2025 was RMB18.1 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 BS compared with 70% in the same period last year and 68.8% in the last quarter.

Speaker 2

The quarter over quarter improvement was mainly from higher proportion of net revenues from our self developed game, which carry a higher margin than licensed game. Our gross profit margin for Yundao was 43% 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 margin. Gross profit margin for Nineti 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 strong monetization of our core online music business and ongoing cost of optimization.

Speaker 2

For our innovative business and others, gross profit margin was 42.3 compared with 34% in the 2024. Total operating expenses for the second quarter were RMB9 billion or 32% 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 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 and 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 invest into content creation and product development.

Speaker 2

The effective tax rate was 14.7% for the second quarter. As a reminder, the effective tax rate is presented on accrual basis, depending on approval policies and our operations. Our non GAAP net income attributable to shareholders for the second quarter totaled RMB 9,500,000,000.0 or US1.3 billion dollars up 22% year over year. Non GAAP basic earnings per ADS for the quarter was US2.08 dollars or US0.42 dollars per share. Additionally, our cash position remains robust with net cash of approximately RMB142.1 billion as of 06/30/2025, compared with RMB137 billion at the end of last quarter.

Speaker 2

In accordance with our dividend policy, we are pleased to report that our Board of Directors has approved a dividend of US0.11.4 dollars per share or US0.57 dollars per ADS. Lastly, under our current US5 billion dollars share repurchase program, which started in 2023, we had repurchased approximately 22,100,000.0 ADS as of 06/30/2025 for a total cost of approximately US2 billion dollars Thank you for your attention. We would now like to open the call to your questions. Operator, please.

Operator

Thank you. 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 2

Let me translate my questions. My first question is regarding the where we meet in terms of monetization in management's view. Is it as early success? Or is it meeting expectation? Or it's already fully ramped up?

Speaker 2

And my second question is regarding Once Human. What's driving the grossing rebound for this title? Does it have the good potential to become evergreen game? And what is user or revenue split in China and overseas? Thank you.

Speaker 2

Yeah. Thanks for the answer and I will do the translation. So first question is regarding World Wings Meet. World Wings Meet has delivered a solid performance as we have explained and exceeded our initial expectation before launch in both in terms of active players and monetization. And more notably, the long term, we believe the long term performance has been quite stable, demonstrating a promising potential for the sustainable success.

Speaker 2

Wherewithmeet uniquely adopt 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. Where Wings Meets, we believe Where Wings Meets has potential for healthy and lasting monetization cycle. And 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. And the second question is regarding Once Human.

Speaker 2

Behind the bonds of performance of Once Human, we actually, we launched a welcomed significant updates, which we call the annual two point zero version in early July. The new scenario, and the screen and the new class system has been well, both well received by players. The two point zero version gained massive popularity. That's why the game was pushed on to 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 Rezone by the July on July 30, offering players what we call that rule free combat experience that enhance the intensity of the game's PVP game place.

Speaker 2

Look back, the success of the new scenario demonstrate that the seasonal scenario mode has great potential and we'll continue to launch new scenarios to meet players' seasonal demands. In the meanwhile, we have also introduced a private server called CustomServer, you're trying to call that Server B, which allow players to customize their own setting. Looking forward with ongoing updates of the scenario experiences and a healthy ecosystem built around the customer servers, the product has potential for long term sustainability. Regarding question on the user distribution between China and international, the user distribution is about fifty-fifty between China and the rest of world. And the revenue distribution is about two to three compared with China versus the rest of world.

Speaker 2

Hope that answers your question. Thank you.

Operator

Your next question comes from Alicia Yap with Citigroup.

Speaker 3

Hi, thank you. Can management share additional color on the overall Blizzard team's performance on the sequential basis? Do you think you have targeted all the potential old and new gamers? Or do you think they are still untapped user for Blizzard's title? Will the future growth of Blizzard titles may need to be driven by content updates and promotional activities on the monetization upside?

Speaker 3

Or is it will also come from the new user growth? Thank you.

Speaker 2

Thank you for your question. First of all, these are 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 operations in China markets via various magnets, with the online and offline rich market activities. The game metrics has surpassed the level prior to the shutting down of the servers. And thanks for our dedication of the operation for both online and offline.

Speaker 2

As we continue to deepen our cooperation with Blizzard developing team, our mutual trust and the coordination is increasing. Looking to the future, long as we implement more improvement that align with the local taste and habits of local Chinese players, we believe there's a good opportunity that we can attract even more new players, as well as engaging those who haven't returned yet. Long story short, we believe there's big potential for Blizzard games in China market. Thank you.

Operator

Your next question comes from Yang Bei with CICC.

Speaker 3

Thank you management. The company has a number of shooting games set to launch in the 2025, including PC and mobile games, as well as self developed and licensed products. What is your perspectives on the overall competitive landscape of your current shooting game sector?

Speaker 2

Yeah. Thank you for your question. Yeah. The shooting game genre is a is a very big genre and also a very big red open kind of a market print as well. And the players have very high expectation on the quality of games.

Speaker 2

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'll keep investing to this genre and we believe in the future we can continue to come out with a competitive market in this big genre. Thank you.

Speaker 3

Thank you.

Operator

Your next question comes from Richie Sun with HSBC.

Speaker 4

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 10 afterwards. 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 4

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 the games? Thank you.

Speaker 2

Okay. So first regarding your question on Marvel Rivals. Mall Rivals recently launched season three and the mid season finals of Mall Rivals Ignite also concluded. We have observed upward and stabilized trend on both DAU and revenue, which make us believe that the new seasonal content updates and strategy are effective. Looking forward, we'll continue to introduce more new gameplay mechanics, new heroes, new popular costumes based on our new cadence of seasonal updates.

Speaker 2

For your questions regarding Sea of Reignments, Sea of Reignments is a very important product to us. And we have high confidence that we'll make this a top tier successful game and the game will be launched next year. So regarding the detail of this game, please stay tuned. Thank you.

Operator

Your next question comes from Felix Liu with UBS.

Speaker 5

Thank you, management, for taking my 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 Westwood Journey Online. The management share more color on the status of the mentioned two titles.

Speaker 5

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 ground up? My second question is on another game in your pipeline, which is Anatom. What is the R and D status of Anatom? When do you expect this game to launch?

Speaker 5

And how should we think about the competition landscape for Anatom considering there are a few new games from your competitors that also fall into this genre? Thank you.

Speaker 2

Okay. So, yeah, let me translate this answers in different parts. So first, regarding your question, first part, Mr. Ying Fengping answered about the financial well-thirty PC version. So after a year of continuous experience optimization, various metrics of Financial Officer journey online has observed recovery and stable improvements.

Speaker 2

And also, as we mentioned, the newly launched unlimited server has been well received by players. And we're super excited to announce that the number of peak concurrent users, set a new record on early August at the 2,930,000 PCU number. And we have been running this game for so many years and we are confident that with continuous innovation Fantasy Westward Journey PC will be continuing growing in the future that we can foresee. And the next question is regarding Aggie Party. Aggie Party, as you know, is one of its kind UGC platform kind of game.

Speaker 2

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 to the game, keep encouraging high quality UGC content to prosper the ecosystem. And also we're going to keep investing to the marketing to keep promoting the game to make it a household game for everyone in China and have everyone in China understand that is the associated game with this whole family party game kind of a concept. So that's for the Eggie Party. And for your question regarding Anata, Anata is now well underway in the mass production stage and with ongoing effort to strengthen the core experience and prepare for the long term content pipeline as well.

Speaker 2

In the face of competitors, we're more focused on whether we are able to create superior gaming quality that differentiate us from existing market offerings. And also, looking forward, we anticipate that new content and progress will be reviewed around Tokyo Game Show time late September. Please stay tuned for product news. Thank you.

Operator

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

Speaker 3

Can management share your marketing and operational strategies for your old game and also new games? 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? What's your expectation for the sales and marketing expenses?

Speaker 3

Thank you.

Speaker 2

Yes. So we have been doing this business for twenty something years. For new games, 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 marketing.

Speaker 2

And of course, now we're embracing new method like the social media, like the power of AI, So we believe we know when to spend, where to spend precisely and where not to spend as well. So in the future, you will see our marketing is going to be more precise and more effective in the future. Thank you.

Operator

Your next question comes from Lincoln Kwong with Goldman Sachs.

Speaker 6

Thank you, management, for taking my questions. 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 company seen any acceleration in game empowered through AI?

Speaker 6

So what are the existing bottlenecks that still remain? And what are our plans to for AI adoption in our existing games? And when can we expect some truly AI native games? My second question is on overseas market. Company actually recent games has been globally published by ourselves.

Speaker 6

So what are the important directions or game genres we are focused on for future overseas expansion? Thank you.

Speaker 3

Okay.

Speaker 2

Yes. So regarding your first question about AI, there's a joke saying that every lifespan of every big model is only three months. Basically every new model comes out every couple of months. Have been investing a lot of resources to embrace AIs, to leverage AI in our developments, in our operations, how to embrace AI in our tool chain everything. So looking to the future, AI is going to play more and more important roles.

Speaker 2

And we are looking into the future that someday there might be games designed by AI, could be fun game that's a future we're looking forward to. And regarding your next question for the overseas publishing. Yes, this is a critically important capability of us to be able to publish game globally in different geos. The global market is kind of geo based, in North America, in South America, in Japan, every market has its own attribute. We have learned through a bunch of global game operation from Marvel rivals, Once Human and also in West market and identify and lifestyle in Japan market.

Speaker 2

We have learned tremendous amount of firsthand hands on experiences from the operation. And looking forward in next couple of years, you will see our global operation will keep growing, fueled by our more important new games. And we do believe growing globally 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.

Operator

Thank you. Your last question comes from Jialong Shi with Nomura.

Speaker 7

So I just have one question. Can management share the performance of Mobo Mistake Mayhem in overseas market so far? In addition, are there any updates on the expected launch launch time for the domestic version? What are the company's expectation or specific targets for this game going forward? Thank you.

Speaker 2

Okay. So as you know, Marvel, Mystery and Mayhem was officially launched in the overseas market on June 26. Which is unique art style and innovative game design. The game has received multiple features from Google and App Store and also editor interview as well. And the update was fantastic for released at the July has been well received by players as well.

Speaker 2

In the meantime, we do face some long term growth challenges for the game. And we're in the process of figuring out how should we grow the game and keep the game in the long run. Thank you.

Operator

And that concludes the question and answer session. I would like to turn the conference back to Brandi Piacenti for any additional or closing remarks.

Speaker 1

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 evening.

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