CICC: Tencent's mobile game revenue is expected to grow by 16% in the third quarter, and the high growth in revenue is gradually releasing the driving force

CICC released a research report stating that industry data shows that in September, the total revenue of top domestic mobile games tracked by the bank increased by 2% year-on-year, with further slowdown in growth compared to July and August. This is mainly due to high base numbers of games like "Justice" and "Collapse Iron" and the gradual stabilization of revenue from new games. Among the top ten mobile games in terms of revenue ranking, Tencent/NetEase/Bilibili have 5/2/1 games respectively, with 4 new games launched in 2024. Among them, Tencent's "MDnF" maintains a leading position in revenue, with revenue in September comparable to "Peace Elite". In September, Tencent's mobile game revenue increased by 20% year-on-year, continuing the trend from July and August. The high revenue growth of Tencent is gradually driving income growth, with an expected 16% increase in mobile game revenue in the third quarter, compared to around 10% in the first half of the year. The stable business growth of Tencent is expected to support valuation improvement. NetEase's PC games saw growth recovery driven by the return of "Warcraft" and new games, but the incremental revenue from new mobile games cannot offset the impact of high base numbers like "Justice", and the growth rate of mobile games depends on the schedule for launching new games. Bilibili's "Three Strategies" had a revenue of 400 million yuan in September, better than the bank's previous expectations, which may drive mobile game revenue growth in the third quarter to exceed the bank's/market's expectations of 83%/66%