37 Interactive H1 Revenue Down 14.28%, Net Profit Up 26.14%, Overseas Share at 41.53%

On August 25, 2026, 37 Interactive Entertainment disclosed its 2026 semi-annual report. During the period, the company achieved revenue of RMB 7.275 billion, down 14.28% year-on-year; net profit attributable to shareholders was RMB 1.766 billion, up 26.14%; net profit excluding non-recurring items was RMB 1.016 billion. Net cash flow from operating activities was RMB 1.089 billion, down 37.89% year-on-year. Investment income reached RMB 1.016 billion, accounting for 45.22% of total profit, compared with RMB 61.93 million in the same period of 2025, of which investment income from associates and joint ventures was RMB 969 million.

By main business, domestic revenue in H1 was RMB 4.254 billion, down 26.18% year-on-year. Long-term operating titles such as "Xun Dao Da Qian" entered a natural decline phase, while new products including "Survival 33 Days", "RO Ragnarok Online: World Journey", and "LastAsylum: Plague" were still in the introduction period, with revenue contributions not yet stable. Overseas revenue was RMB 3.021 billion, up 10.9% year-on-year, and its share of total revenue rose to 41.53% from 32.1% in the same period of 2025. Selling expenses were RMB 3.764 billion, down 14.64% year-on-year, mainly due to adjusted advertising strategies for long-term games and reduced traffic purchases; operating costs fell 17.1% year-on-year, and the gross margin for online game business was 77.70%, up 0.45 percentage points year-on-year.

The concentrated realization of investment income mainly came from the listing of Beijing Zhipu Huazhang Technology Co. , Ltd. , an associate investment. Zhipu listed on the Hong Kong Stock Exchange in January 2026, and the share price movement led to an increase in fair value change gains of the associate, resulting in a corresponding increase in investment income recognized under the equity method. The company has invested, directly or indirectly, in more than ten AI and hard-tech companies including Zhipu, Moonshot AI, Baichuan Intelligent, Aish Technology, and Qingwei Intelligent, exploring the application of investee technologies in game R&D and operations.

In terms of industry, in the first half of 2026, the actual sales revenue of the domestic game market was RMB 188.45 billion, up 12.17% year-on-year; the mini-program game market revenue was RMB 31.657 billion, up 36.01% year-on-year. 37 Interactive's R&D investment was RMB 391 million, up 15.88% year-on-year. The company's AI-assisted generated 2D art assets accounted for over 80% of total, with more than 500,000 assets produced per quarter; AI deeply participated in generating over 70% of advertising material videos; AI automated delivery accounted for over 50%; AI localization translation covered all overseas games and 18 languages, with a maximum accuracy rate of 95%; intelligent customer service has been integrated into all games, with a resolution accuracy rate of 80%.

In overseas business, "LastAsylum: Plague" has covered 137 countries and regions globally, with a cumulative user base exceeding 15 million, ranking 16th on Sensor Tower's June China mobile game overseas revenue list; "Puzzles & Survival" has cumulative revenue exceeding RMB 16.8 billion, with over 75 million global cumulative users. The company's product pipeline includes more than 20 new titles such as "Code MLRPG", "Douluo Dalu: Zero", and "Dream Back to Zhen Huan", covering MMORPG, simulation, card, business simulation, and casual genres.