The Zhitong Finance App learned that Huajin Securities released a research report saying that on February 27, the State Press and Publication Administration released approval information for domestic online games for February, and a total of 111 games received version numbers. Among them, many major IP games such as “Black Myths: Goku” and “Infinite Warmth” are highly anticipated by the industry and are extremely influential in the market. Edition distribution is normalized and showing an increasing trend. Breaking 100 in March has established strong confidence in the market and is empowering the development of the game industry. Recommended attention: Perfect World (002624.SZ), Zhongqingbao (300052.SZ), 37 Entertainment (002555.SZ), etc.

Hot events:

On February 27, the State Press and Publication Administration released approval information for domestic online games in February. A total of 111 games received edition numbers. Among them, many major IP games such as “Black Myths: Goku” and “Infinite Warmth” are highly anticipated by the industry and are extremely influential in the market. Up to now, the number of editions has been steadily breaking 100 for three consecutive months, and is showing an increasing trend. The game industry continues to prosper, and AI computing power is being iteratively catalysed; MR devices drive carrier transformation, multi-terminal interoperability or become a trend; and games with high-quality content and gameplay are expected to develop steadily.

▍ The main views of Huajin Securities are as follows:

Over 100 game editions have been released for 3 months in a row, and the number is growing.

In December 2023, 105 domestic games received edition numbers, and the number of approvals in a single month exceeded 100, a record high in a single month in 2023. In January 2024, a total of 115 games received edition numbers. In February, a total of 111 games received edition numbers, including works from famous game companies such as Perfect World, Paper Folding, and Zhongqingbao. Up to now, the number of editions has been steadily breaking 100 for three consecutive months. Game version data showed an upward trend in the beginning of the year, sending an optimistic signal and building confidence in the industry; normalizing version distribution helped accelerate monetization of high-quality content games and enabled the industry to prosper.

The blockbuster game received edition numbers, and the premium game focused on the industry's attention.

Game Science established the “Black Myth” project at the end of 2017, and it became popular all over the world after releasing the first demo video on August 20, 2020. On the official channel of the well-known foreign game media IGN, “Black Myths” surpassed 1.55 million daily broadcasts and was extremely popular. This time, China's first 3A game (high cost, high quality, high volume game) representative work “Black Myth: Goku” was approved for version this month, and the creation of a fine game was further recognized. Furthermore, “Infinite Warmth”, the first open world game for women in China, has also been approved, and “supports three terminals” (mobile, client, console), which is expected to further expand the market for women who already have “strong financial power” attributes.

High-quality IP and gameplay empower games and lay the foundation for user recognition.

The role-playing game “Black Myths: Goku” is based on Chinese mythology. The story is based on “Journey to the West”, and has already attracted great attention at home and abroad through promotional videos. The game has made a huge breakthrough based on incorporating elements of traditional Chinese culture, and is an important reference for other game makers. “Infinite Warmth” is the fifth-generation IP title of the “Warm Warmth Series” under Paper-folding Games. For the first time, the game deeply combines the “Warm and Warm Series” IP core gameplay makeover with open world exploration. Gameplay such as high-quality IP and open world using traditional culture as a carrier is expected to generate strong appeal and be more advantageous in gaining user approval.

Risk warning:

Policy uncertainty, new game performance or demand falling short of expectations, version number uncertainty, etc.