[中报]吉比特(603444):厦门吉比特网络技术股份有限公司2023年半年度报告摘要（英文版）
原标题:吉比特:厦门吉比特网络技术股份有限公司2023年半年度报告摘要（英文版） G-bits Network Technology (Xiamen) Co., Ltd. 2023 Interim Report (Summary) August 2023 Should there be any discrepancy between the English version and the Chinese version of this Report, the Part I Important Notes 1.1 This interim report summary is derived from the full text of the interim report. In order to have a comprehensive understanding of the Company's operating results, financial condition, and future development plans, investors should carefully read the full text of the interim report, which is available on the website of the Shanghai Stock Exchange (www.sse.com.cn). 1.2 The board of directors (or the “Board”), supervisory board, directors, supervisors, and senior management of the Company guarantee the truthfulness, accuracy, and completeness of the interim report, ensuring that there are no false records, misleading statements, or material omissions. They also bear individual and joint legal responsibilities. 1.3 All directors of the Company attended the board meeting for the review of this report. 1.4 This interim report is unaudited. 1.5 This report includes the profit distribution proposal or capitalization of reserves proposal, which has been approved by the board of directors. In the future implementation of the profit distribution plan for the first half of 2023, the total share capital on the equity registration date will be used as the basis. An amount of RMB 70.00 (including taxes) in cash dividend will be distributed to all shareholders for every 10 shares held. It is hereby clarified that there will be no capitalization of the profit distribution through capital reserve conversion, nor will there be any other form of profit distribution in this instance. The projected profit distribution amount during the reporting period is estimated to be RMB 504 million (calculated based on the total share capital of June 30, 2023). This amount accounts for 74.60% of the net profit attributable to shareholders of the Company during the reporting period. Since the Company's initial public offering in January 2017, the cumulative cash dividends amount to RMB 5.298 billion (including the announced but yet-to-be-implemented dividend amount during the reporting period), which is 5.89 times the net proceeds raised from the initial public offering of stocks. Part II Basic Information of the Company 2.1 Company Profile
Unit: RMB Yuan
1. Business Overview During the Reporting Period （1）Overview of Major Game Revenue A. The operating revenue of Asktao (PC) during the reporting period decreased slightly compared to the same period last year. B. The operating revenue of Asktao (Mobile) during the reporting period decreased compared to the same period last year. C. The operating revenue of Overmortal (Mainland version) during the reporting period decreased compared to the same period last year. D. Aobi Island: Dreamland was launched in July 2022, contributing incremental operating revenue during the reporting period compared to the same period last year. E. The Company's cooperation with the developer of "Mole's World" expired on May 26, 2023, and the Company recognized the deferred revenue balance as operating revenue during the reporting period, as the performance obligations are no longer required. 2）Overseas Game Business During the reporting period, the operating revenue from overseas game business amounted to RMB 119 million, with a year-on-year growth of 5.99%. （2）Overview of Company Personnel 1) The total number of employees at the end of this reporting period was 1,356, an increase of 102 employees compared to the end of the previous year with a growth rate of about 8.13%, mainly due to the increase in the number of employees engaged in game research and development activities. 2) The average monthly number of employees during the reporting period was approximately 1,317, an increase of around 268 employees compared to the same period last year with a growth rate of about 26%. Among them, the number of employees engaged in game research and development activities and overseas operation activities increased by 167 and 33, respectively. The total number of employees increased year-on-year, resulting in corresponding increases in basic compensation and related expenses. However, the accrued bonuses based on business performance decreased year-on-year, leading to a reduction in overall employee compensation and related expenses year-on-year. （3）Overview of Equity Investment Business The company's investment targets mainly consist of upstream and downstream enterprises in the game industry or investment funds in the industry. During the reporting period, the Company made relatively few new equity investments. The income generated from investment activities during the reporting period (including investment income, gains or losses from changes in fair value, assets impairment losses, etc.) increased by RMB 83 million compared to the same period last year. This increase was primarily due to higher share of profits of joint associates compared to the same period last year. （4）Overview of Exchange Rate Changes As of June 30 2023, the central parity rate of the U.S. dollar against the RMB was 7.2258, representing a 3.75% increase from the end of the previous year. As a portion of the Company's business is settled in U.S. dollars and the Company holds a relatively large amount of U.S. dollars (mainly deposited in domestic banks), the foreign exchange gains were RMB 68 million during the reporting period, compared with RMB 104 million in the same period last year, with a decrease of RMB 35 million. 2. Overview of Game Profits During the Reporting Period （1）Domestic Game Business 1) For Asktao (PC), the operating revenue and profits during the reporting period decreased slightly compared to the same period last year. 2) For Asktao (Mobile), during the reporting period, the operating revenue experienced a decrease compared to the same period in the previous year. Furthermore, there was an increase in product-related expenditures such as advertising costs and operational service fees. As a result, the overall profit showed a year-on-year decrease. 3) For Overmortal (Mainland Version), during the reporting period, product-related expenditures including advertising costs and operational service fees demonstrated a year-on-year decrease. However, the game gross billings for the same period experienced a decline compared to the previous year, resulting in a year-on-year reduction in business profit. 4) Aobi Island: Dreamland, launched in July 2022, contributed incremental profits during the period compared to the same period last year. （2）Overseas Game Business During the reporting period, the Company launched products such as Overmortal (Vietnam version), Dungeon Survivor III: Dark Genesis (Hong Kong, Macau and Taiwan, China version), and Funny Fighters: Battle Royale (Southeast Asia version) in overseas markets. As of 30 June 2023, the above products have not yet turned profitable. 3. Overview of Operating Cash Flow from Operating Activities During the Reporting Period (1) The net cash flow generated from operating activities during the reporting period decreased by 19.77% compared to the same period last year. The main reasons for this decrease are as follows: 1) The year-on-year decline in core product gross billings resulted in a reduction in operating cash inflow from sales receipts. 2) The overall operating cash outflow remained relatively stable compared to the same period last year, with the following factors contributing: A. Taxes paid during the reporting period decreased compared to the same period last year. B. Due to an increase in personnel, basic compensation expenses increased compared to the same period last year. (2) The year-on-year decrease in operating revenue during the reporting period, which amounts to a decline of 6.44%, is relatively proportional to the decrease in operating cash inflow, which declined by 6.26%. However, the operating cash outflow remained stable, leading to a larger decrease in net cash flow from operating activities compared to the decline in operating revenue. 4. Overview of Deferred Game Revenue As of June 30, 2023, the Company's unamortized deferred game revenue balance amounts to RMB 479 million, a decrease of RMB 77 million compared to the end of the previous year RMB 556 million. This decrease is primarily due to the expiration of the Company's cooperation with the developer of Mole's World on May 26, 2023, and the Company recognized the deferred revenue balance as operating revenue, as the performance obligations are no longer required. 2.3 Quarterly Key Financial Information Unit: RMB Yuan
1. Changes in operating revenue and net profit attributable to shareholders of the Company for the second quarter of this year compared to the first quarter are as follows: (1) Profits from Game Business 1) For Asktao (PC), the operating revenue and profits for the second quarter of this year decreased compared to the first quarter. 2) For Asktao (Mobile), the operating revenue increased for the second quarter of this year due to the 7th-anniversary celebration event. The product-related expenses such as promotion expenses, the overall profit showed an increase compared to the first quarter. 3) For Overmortal (Mainland version), the product-related expenses such as promotion and operation service fee decreased for the second quarter of this year. However, the game gross billings decreased in the same period, leading to a decrease in business profit compared to the first quarter. 4) For Aobi Island: Dreamland, the operating revenue and profits for the second quarter of this year decreased compared to the first quarter. (2) Exchange Rate Change Gains In the second quarter of this year, gains from exchange rate change amounted to RMB 94 million, with losses of RMB 25 million in the first quarter. This represents a quarter-on-quarter increase in gains of RMB 120 million (an increase of RMB 73 million attributable to shareholders of the Company). 2. The net cash inflow from operating activities for the second quarter of this year increased compared to the first quarter, primarily influenced by the following factors combined: (1) The cash inflow generated from operating activities remained relatively stable quarter-on-quarter. (2) The overall cash outflow from operating activities decreased quarter-on-quarter, with the following contributing factors: A. Annual bonuses for the year 2022 were disbursed in the first quarter of this year; B. Tax payments made in the second quarter of this year increased quarter-on-quarter. 2.4 Table of Top 10 Shareholders Unit: Shares
?Applicable ?N/A 2.6 Changes in Controlling Shareholder or Ultimate Controlling Party ?Applicable ?N/A 2.7 Outstanding Bond Situation as of the Approval Date of the Semi-Annual Report ?Applicable ?N/A Part III Management Discussion and Analysis 3.1 Overview of Core Business During the Reporting Period 1. Business Profile The company specializes in the development and operation of online games, with a focus on nurturing innovative talent and promoting efficiency. Its mission is to present unique products and enriching entertainment to a global audience. Founded in 2004, the Company has immersed itself in the game industry. Through years of development and technological advancement, the Company has grown significantly, enhancing its technical capabilities and expanding its product portfolio. Rooted in traditional Chinese culture, the Company has developed games such as Asktao (PC), Asktao (Mobile), and Overmortal. Asktao (PC) has been in continuous operation for 17 years since its debut in 2006. Building on its strong user base and IP popularity, the Company launched the mobile version of the MMORPG Asktao in April 2016, which has enjoyed steady popularity for the past 7 years. In February 2021, the Company launched Overmortal, an ink-wash style idle mobile game about the Taoist cultivation of immortality. Since its release, it has attracted over 24 million users. Leiting Games, a platform G-bits operates independently, has robust game management capabilities. The Company has managed a wide range of games such as Asktao (Mobile), Overmortal, Aobi Island: Dreamland, Dragon POW!, World Flipper, Tale of Immortal (PC), Dungeon Survivor II: Dark Tide (Android), Dungeon Survivor III: Dark Genesis, Funny Fighters: Battle Royale, Gumballs, and Abyss Blade, among other successful titles. 2. Business Models The Company specializes in the development and operations of games. Below is a breakdown of the Company’s revenue streams and operating models: (1) Revenue Streams For online games, the Company has three revenue streams: Pay-To-Play (PTP), Free-To-Play (FTP), or In-Game Advertising (IGA). The majority of our revenue comes from FTP, where players can play for free and publishers profit from in-game item sales. FTP is a popular revenue model for the online game industry in China. (2) Operating Models There are three main operating models for the Company’s games: independent operation, licensed operation, and cooperative operation. (1) Independent Operation: The Company publishes games on its platform and handles both publishing and promotion. These games might be developed by the Company or by other organizations. (2) Licensed Operation: The Company licenses games developed by itself to external publishers, who are responsible for managing the game's publishing and promotion. The (3) Cooperative Operation: The Company partners with third-party platforms, such as the App Store and Android application stores, to co-publish and promote its games, whether developed by the Company itself or licensed. The Company’s mobile games mainly follow the independent operation and cooperative operation models. For example, Asktao (PC) is licensed to GY Games, and other PC games from the Company’s mainly follow the cooperative operation model. 3.2 Analysis of Core Competencies During the Reporting Period 1. Strong Independent Research and Development (R&D) Capabilities (1) Overview of the Company’s R&D Performance The Company attached great importance to R&D and talent development. During this reporting period, The Company’s R&D expense amounted to RMB 0.37 billion, accounting for 15.74% of its revenue. This sustained investment has laid the foundation for its innovation. The Company’s R&D team has grown year on year, with the number of employees reaching 530 in 2021, 692 in 2022, and 776 in the first half of 2023, representing 56.08%, 55.18%, and 57.23% of the total workforce respectively. The Company’s experienced core R&D personnel, all possessing excellent game development and management skills, are the foundation for the Company’s ongoing product launches. (2) Boost R&D Performance with the Minimum Viable Product (MVP) Approach Games, as a medium of entertainment, thrive by providing users with compelling and novel experiences. The Company’s commitment to innovation is unwavering. The Company strives to create games that are both unique and commercially viable. By focusing on differentiation, the Company increases its product's competitiveness on the market while also increasing the innovation of their gameplay, concepts, art styles, etc. This also intensifies the challenges of R&D, requiring teams that excel in gameplay design, project management, and data analysis. Through years of experience, the Company has adopted the MVP approach to its R&D process. In applying the MVP approach to the Company’s R&D, at the start of a project, the Company assembles a core team to develop a prototype based on the creative designer's idea. Extensive user testing is then used to validate the feasibility of the core gameplay mechanics. Throughout the development process, the game undergoes numerous iterations and is fine-tuned based on test data. This MVP testing approach, starting from the demo version, allows the Company to keep a tight rein on product direction, avoid wasteful investments, and control R&D costs. frequent testing during development helps the Company to control variables between two successive tests, allowing the Company to analyze user behavior feedback more accurately. As a result, the Company has able to address issues that arise during development in a timely manner, increasing R&D efficiency. As the demo evolves into a final project, the Company continually refines and adapts the MVP approach to ensure seamless integration between gameplay testing and art assets. While the MVP approach is effective in controlling R&D costs, it doesn't imply smaller projects or less overall investment. The scope of the project depends on the experience of the core team, project management skills, technological accumulation, the nature of the project, etc. The Company is committed to nurturing excellent game producers over the long term, and through the MVP approach, the Company filters projects and allocates more resources in the hope of producing more innovative, engaging, and high-quality products. In addition, the MVP approach involves the Company’s operations team working closely with the R&D team on a variety of tests and analyses. This allows the Company to gain a deep understanding of the market and users of its products, so that the Company can tailor its strategies and minimize the risks and costs of release. (3) Middle Platform Construction, A Strong R&D Foundation The Company has prioritized the establishment of solid R&D middle platforms. This includes the Company’s Technical Center, Art Department, Audio Department, and Test Center. These pillars support every aspect of development, from R&D and art design, to soundtrack creation and product testing. This system not only ensures development, efficiency, and high quality output, but also optimizes the allocation of resources across projects, minimizing redundant costs and ensuring a stable R&D process. The Company’s Technical Center specializes in game development, focusing on both conventional and emerging technologies. It provides strong support including performance testing and optimization, effectively tackling technical challenges and improving R&D efficiency. Currently, the Technical Center focuses on developing compilers and auxiliary tools for GS, while building server frameworks and various public services rooted in GS. It's designing PKG and development tool chain is based on the GS environment, so that it can develop universal tools for all R&D teams and provide automated building and deployment solutions. The center conducts in-depth research on Unity, Unreal engine, and 3D rendering technologies. The center standardizes, modularizes, and builds frameworks for projects to provide service tailored to the needs of different teams. As a result, The Technical Center manages to reduce both the resources and time costs of game development, while improving R&D quality. In addition, The Technical Center applies cutting-edge AI technologies across all stages of game development, including planning, development, and testing, improving both the R&D efficiency and the overall gaming experience. The Company’s Art Department focuses on improving the quality and style of game art. The Art Department creates unique art styles that fit the unique vibe of our games, providing a distinctive gaming experience while satisfying diverse aesthetic preferences. Through continuous testing and new iterations, the Art Department strikes a balance between distinctive and mainstream art elements. In its pursuit of artistic excellence, the Art Department has designed detailed art standards and rules for each product, while consistently improving its design capabilities and quality control. The Art Department actively follows the latest technology trends, and promote their application in game art, especially cutting-edge technologies such as AIGC. By using image generation techniques and apps like Stable Diffusion, the Art Department and streamlining our workflows. The Company’s Audio Department is dedicated to creating immersive audio that integrates with the game's narrative and gameplay. It pioneers the use of state-of-the-art audio and AI technology to effectively create audio that enhances the gaming experience and is tailored to player preferences. The Company’s Test Center manages project testing for daily and version updates to ensure that the performance is up to the standard. The center ensures a stable allocation of testing resources, improving both the efficiency and standardization of our testing process. By drawing on past experience, it provides reusable testing methodologies to ensure that our games maintain a stable quality. 2. Exceptional Game Operations (1) Proven Long-term Operational Proficiency Leiting Games, an independently operated platform, is committed to a quality-first approach that prioritizes the user experience. The high-quality, unique, and highly engaging games under Leiting Games' operations have gained significant popularity and earned an excellent reputation. With years of experience, Leiting Games has developed a comprehensive understanding of operating various game genres including MMORPG, Roguelike, idle games, and casual simulation. Leiting Games' operational framework covers everything, such as game version optimization, brand development, media outreach, event planning, cooperative channels, the target market, as well as a sharp insight into player demographics, behaviors, and spending habits, Leiting Games tailor its strategies to deliver precise and effective promotion. (2) Precise and Effective Promotion In recent years, "buying traffic" has become an important promotion method in the game industry. However, its rising cost can negatively impact a game's profitability. Over the years, the Company has consistently prioritized creating unique, high-quality products and tailoring its promotion strategies accordingly. The Company’s promotion plans are based on the game's features, the target market, and our understanding of the player base — their preferred platforms, behaviors, and spending habits. This allows the Company to reach its target audience effectively and precisely, while avoiding over-reliance on "buying traffic". 1) User Relationship Management The Company values user relationship management as it facilitates communication between the Company and its players. It allows the Company to meet the evolving demands of our players by understanding their needs deeply, a strategy that benefits its relationship with the users and enhances the Company’s reputation within the industry. With sincerity towards the players being the core of the Compnay’s operations, game designers, promotions staff, and customer support personnel organized numerous events for players. Some activities for users of Asktao (Mobile) are as follow: Since 2017, Asktao (Mobile) has held a national competition every year, attracting a huge number of participants. The competition includes warm-ups, point-based matches, city matches (offline), knockout stages, and finals (offline), creating an energetic and engaging environment. The Company has also been organizing Designers Talk, an event for game designers to meet players, in various cities since 2016. Additionally, starting in 2018, the Company has held an annual Asktao Conference, which gives players an opportunity to engage in in-depth discussions and participate in fun events, either online or offline. 2) Advertising Throughout game releases, updates, and promotions, the Company’s user platforms to advertise, send KOC (key opinion consumer) recommendations, and livestream games. At the same time, the Company supports UGC (user-generated content) across multiple platforms to spread the product information faster and further. The Company also focuses on user retention with well-designed gameplay and customer service. The Company believes that improving the user experience is the key to higher user retention and long-term product success. During the reporting period, the Company’s games like Asktao (Mobile) and Overmortal have run KOL (key opinion leader) promotional campaigns on short video platforms based on the dates of major version updates and user activities. These targeted promotions ensure a continuous flow of new users. Furthermore, the games have adopted additional promotional plans such as the TikTok publisher program, bidding ad release, and micro-end ad release to reach a wider range of users and increase conversion rates to keep the product consistently popular. The Company’s IP development aims to enrich the game's world, character portrayals, and storylines to deepen players' immersion and emotional connection to the game. Asktao (Mobile), a classic IP that has been in operation for 17 years, represents the Company’s efforts to strengthen the Asktao brand. To build the brand, the Company is enhancing game stories and player immersion through various Asktao IP derivatives, including novels, audiobooks, merchandise, and short films. After the release of its first novel, Asktao: Dashing Spear, the Company invited renowned author Yan Leisheng to write the sequel, Asktao: Tao in the Heart, which was published in 2021 as a printed book and audiobook. Throughout the process, the Company invited dozens of hardcore players to contribute ideas and read the work in advance to ensure that the novel aligned with players' perceptions of the Asktao world. Overmortal is a unique Taoist immortality cultivation-themed IP which is enhanced by music recordings, comics, novels, animations, and more. In 2022, Overmortal launched its animated derivative I'm Carl, which is updated on platforms such as TikTok, Kuaishou, and Bilibili, and boasts nearly 2.4 million fans across all platforms. The IP related releases include the film Ordinary Yet Extraordinary, the mini-drama Mr. White Fox, the audiobook Between Demon and Immortal, and more, maintaining high popularity across all major platforms. In May 2023, the game's theme song, "Beyond Mortal", was released on major music platforms. The song, a unique blend of Chinese traditional elements, rap, and chanting, received acclaim from players and music lovers alike. 4) Collaborations The Company frequently collaborates with products and brands that appeal to its games' target players to increase the Company’s popularity and recognition. The collaboration partners can range from the Company’s games to those of other companies, as well as animated films and web series. The Company held numerous themed collaboration events during the reporting period that attracted a large number of participants. In particular, during the reporting period, Overmortal ran successful collaborations with the West Lake Scenic Area Administration and the classic IP, Shrouding the Heavens. In April 2023, Asktao (Mobile) teamed up with the China Academy of Art, creating the "the seventh anniversary fashion" that blended traditional Chinese colors and patterns. 5) Charts & Recommendations The Company’s high-quality, unique, and intriguing games have earned the recognition from leading platforms such as the App Store and TapTap. The Company is regularly featured in its charts, attracting a significant number of downloads and earning widespread attention. In addition, players' ratings and discussions on these platforms have further increased its games' popularity. During the reporting period, several of the Company’s games, including Asktao (Mobile), Overmortal, Aobi Island: Dreamland, World Flipper, Dungeon Survivor III: Dark Genesis, and Elona, were featured on popular platforms such as the App Store. 6) Word-of-Mouth Marketing The Company leverags its excellent product quality to drive word-of-mouth marketing through various third-party gaming platforms, recommendations from KOCs (key opinion consumers), WeChat accounts, QQ groups, and its official channels. The Company’s approach includes user selection, expectation management, feature communication, and user feedback tracking to refine and improve its operations. (3) Player-Centric Approach The Company long-standing commitment to a player-centric design and operation philosophy enables it to create and share enjoyable experiences. As part of this philosophy, the Company encourages its producers to adopt the MVP (minimum viable product) approach. This means prototyping and testing core gameplay as early as possible so that the Company can incorporate player feedback to refine its games and ultimately make high-quality, original content that its players love. The Company invests in its customer service team through competitive salaries and comprehensive business and technical training, ensuring they provide professional, efficient, and satisfying service. With the philosophy of “being an official friend of players and a guide to great experiences”, the Company provide in-depth support through various channels such as in-game CS (customer service) button, a 24-hour hotline, WeChat account, forums, and email. The Company maintains a dedicated team to monitor service quality daily and employs AI technology to enhance its support capabilities, significantly improving the players’ experience. Additionally, The Company organizes online and offline events to directly engage with its players, facilitating open dialogue about game events and updates. For instance, for Asktao (Mobile), the Company holds annual the Designers Talk and Asktao Conference to discuss with players the future updates and promotion plans and collect feedback from KOLs and players to help them "customize" their games. 3.3 Analysis of Core Competencies During the Reporting Period 1. Major Product Performance (1) Status of Launched Products Overview of Launched Products: consumers), WeChat accounts, QQ groups, and its official channels. The Company’s approach includes user selection, expectation management, feature communication, and user feedback tracking to refine and improve its operations. (3) Player-Centric Approach The Company long-standing commitment to a player-centric design and operation philosophy enables it to create and share enjoyable experiences. As part of this philosophy, the Company encourages its producers to adopt the MVP (minimum viable product) approach. This means prototyping and testing core gameplay as early as possible so that the Company can incorporate player feedback to refine its games and ultimately make high-quality, original content that its players love. The Company invests in its customer service team through competitive salaries and comprehensive business and technical training, ensuring they provide professional, efficient, and satisfying service. With the philosophy of “being an official friend of players and a guide to great experiences”, the Company provide in-depth support through various channels such as in-game CS (customer service) button, a 24-hour hotline, WeChat account, forums, and email. The Company maintains a dedicated team to monitor service quality daily and employs AI technology to enhance its support capabilities, significantly improving the players’ experience. Additionally, The Company organizes online and offline events to directly engage with its players, facilitating open dialogue about game events and updates. For instance, for Asktao (Mobile), the Company holds annual the Designers Talk and Asktao Conference to discuss with players the future updates and promotion plans and collect feedback from KOLs and players to help them "customize" their games. 3.3 Analysis of Core Competencies During the Reporting Period 1. Major Product Performance (1) Status of Launched Products Overview of Launched Products: Asktao (PC) In-house Developed Turn-Based MMORPG April, 2006 Asktao (Mobile) In-house Developed Turn-Based MMORPG April, 2016 Idle Taoist Immortality Overmortal In-house Developed February, 2021 Cultivation Game Aobi Island: Dreamland Licensed Casual Simulation July, 2022 Licensed, in Charge World Flipper of Localization RPG with Pinball Element October, 2021 Development Dungeon Survivor III: Licensed Dungeon RPG October, 2021 Dark Genesis Funny Fighters: Battle In-house Developed Casual Competitive RPG July, 2019 Royale Fantasy Roguelike Shooting Dragon POW! Licensed August, 2023 Game Please note: All the games are mobile games except Asktao (PC). (2) Major Product Performance 1) Asktao (PC) The Company’s first product, Asktao (PC), an online game that the Company developed independently, was launched in April 2006 and quickly became a favorite among gamers, even reaching a peak of nearly one million concurrent users. The game's excellence was awarded with the Best Design for Digital Balance and the Best 2D (characters/scenes) Art Design (Art Design) awards at the 5th annual CGDA (China Game Developers Awards). It was also nominated as one of the Top 10 Outstanding PC Games in 2022 by CADPA (China Audio-Video and Digital Publishing Association). Since its release in 2006, Asktao (PC) has won players' hearts with its high-quality gameplay and fair pricing. To prolong the game's life cycle and increase its IP value, the Company adapts to market trends and player feedback to update the game consistently. Every year, the Company release four major updates, the new year, annual, mid-year, and zodiac updates, to keep the game fresh and maintain its profitability. 2) Asktao (Mobile) In April 2016, the Company launched Asktao (Mobile), an in-house developed MMORPG. It retains the narrative and world setting of Asktao (PC). Harnessing the loyal user base and IP value the PC version built over the past decade, and with extensive user research, it was deeply optimized to adapt its core gameplay to the mobile platform. The Company also incorporates user feedback into regular updates to ensure the game meets player expectations. To extend the game's life cycle, the Company persistently work on enhancing the Asktao brand and its IP value. Due to its exceptional performance, Asktao (Mobile) has gained industry recognition, and was chosen as the 6th game to win the China Excellent Publication Award (Audio-Visual Electronic Game Publication) from the CADPA. It also won several other awards as well, including Best Original Mobile Game at the 2016 Golden Plume Awards, and Best Game Music Design at the 9th CGDA. It was voted one of the Top Ten Most Popular Original Mobile Online Games of 2016. During the reporting period, Asktao (Mobile) maintained an average ranking of 29th on the App Store's bestselling game list, with a peak ranking of 10th. 3) Overmortal Overmortal is an in-house developed, idle Taoist immortality cultivation mobile game with a traditional Chinese ink wash art style. The game depicts a Taoist realm inhabited by humans, immortals, monsters, and demons. It faithfully recreates the stages and mechanisms of Taoist spiritual cultivation, as well as displaying abilities and techniques from similar novels of the genre. Accompanied by dynamic lighting and sound effects, players will enjoy an immersive and engaging gaming experience. Thanks to its excellent production and operational performance, Overmortal has received high industry recognition, winning awards such as the Best Concept Art Design award at the 12th CGDA, the Best Creativity for Mobile Games award at the 14th CGDA, and nominations for the Top 10 Outstanding Creative Games and Top 10 Emerging Games by the CADPA in 2021. During the reporting period, Overmortal maintained an average ranking of 27th on the App Store's best-selling game list, with a peak ranking of 7th. 4) Aobi Island: Dreamland Aobi Island: Dreamland is a casual mobile game based off an existing IP launched on July 12, 2022. The game retains many iconic elements from its web-based predecessor, while introducing various social interaction features and integrating fashion trends such as modernized Chinese traditional styles. Players can engage in various in-game features such as character development, management simulation, and outfit changing. The game has been updated at a rapid pace since its release, providing players with a fresh and varied gaming experience. 5) Dragon POW! Launched on August 11, 2023, Dragon POW! is a top down shoot 'em up mobile game with a unique gameplay mechanic of counterattacking by devouring bullets. Players take on the role of a dragon knight who travels through various kingdoms with a small black dragon to retrieve incoming bullets to unleash powerful counterattacks, resulting in a thrilling gameplay experience. 2. Major Product Performance Overview of Products in Development: Status of Estimated Products Developed Planned Regions Game Genre Release Date In-House for Release Licensing Second Half of Equip Master (Code License Western Fantasy Idle Worldwide 2023 (Mainland Name: BUG) Obtained Game China) Hong Kong, Macao, Not Yet First-Person Shooting First Quarter of Outpost: Infinity Siege Taiwan, and Applied PC Game 2024 Overseas Second Half of Alchemy Family (Code License Family Management Worldwide 2023 (Mainland Name: M66) Obtained Idle Game China) Project Super Meow License Customized 3D Cat First Half of - Star Obtained Card Game 2024 License Fortress Battle Tower Defense SLG Worldwide TBD Obtained Not Yet Western Fantasy Idle 2024 Origin (Code Name) Worldwide Applied Card Game (Overseas) （未完）  |