In the development of the gaming industry in China, it has only taken shape in the past thirty years. However, with the increasing exposure to various media platforms, players' ability to discern good games has greatly improved. Compared to decades ago, it has become increasingly difficult for a game to gain a foothold in the market if it lacks attractive content, innovative mechanics, or a certain level of quality.
As a listed company focused on gaming, IDREAMSKY (01119) has been expanding its self-developed projects while building on the foundation of popular games such as puzzle, parkour, and RPG. One of the company's most important games in the short term, &#34;Karapicho,&#34; has also made new progress.
According to Chen Xiangyu, the founder and CEO of IDREAMSKY, the success of &#34;Karapicho&#34; in the future will represent a new level of research and development capabilities for IDREAMSKY. On February 1st, this highly anticipated new game for IDREAMSKY officially entered the public beta, marking a significant milestone for the company.
<h2>Integration + Innovation, Focusing on the Long-lasting Shooting Genre</h2>
Among the most popular game genres, action-adventure, shooting, and battle royale games are undoubtedly the top contenders.
Among them, the shooting genre is an important and growing segment in the gaming industry, both domestically and internationally.
Industry insiders have analyzed the reasons behind the continuous emergence of new products in the shooting genre. They have identified several driving forces, including continuous gameplay innovation, new cultural and thematic packaging, gameplay integration, and mechanical innovation. These factors collectively propel the development of the shooting genre to new heights.
Furthermore, successful shooting games often have an exceptionally long lifecycle, which is also a characteristic of PC and console games. Many popular shooting games have maintained their popularity on PC and consoles for over a decade.
From a global perspective, top shooting products have demonstrated this characteristic. For example, &#34;Counter-Strike&#34; has been in operation for 25 years, and &#34;Counter-Strike: Global Offensive&#34; has been running for 12 years. In addition, recent shooting games such as Overwatch, PUBG, and Valorant have showcased the new trend of hero-based shooting.
Regarding this trend, Wang Xi, Vice President and Head of Investor Relations at IDREAMSKY, stated, &#34;We recognized this trend from the beginning. In our view, the hero-based shooting market in China is just beginning, and the two-dimensional shooting genre is currently a blue ocean, providing us with a great opportunity.&#34;
According to Zhitong App, the most prominent features of &#34;Karapicho&#34; are shooting and two-dimensional art style. On one hand, it focuses on the shooting sub-genre, and on the other hand, it combines the art style and effects of the two-dimensional world. This fusion fills a gap in the current market, making &#34;Karapicho&#34; the world's first two-dimensional competitive shooting game with no competitors currently on the market.
Unique positioning has also shaped several characteristics of &#34;Karabichu&#34; that are different from traditional shooting games. For example, in the past, the gameplay of domestic players focused on guns, while &#34;Karabichu&#34; is centered around characters and incorporates more skills and features.
In Wang Xi's view, the excitement of shooting games comes from marksmanship. Players with good marksmanship can achieve quadruple or quintuple kills. In this process, different characters have different skills and features, providing deep strategic space for things like counter-killing with guns and explosive damage. This extends the lifespan of the game for individuals.
This is also why competitive games are like sports games, because they both require a long time of practice. Once mastered, this ability becomes a personal skill. Players have invested so much time in developing this skill, so there is a cost to transferring it, according to Wang Xi.
It is understood that under the positioning centered around characters, the core of &#34;Karabichu&#34; is character development. Compared to traditional shooting games, it has a strong emphasis on character development, including nurturing and growth companionship, as well as a more youthful theme packaging. Currently, &#34;Karabichu&#34; has 14 characters, and more will be added in the future. Under this innovation, characters and guns will be linked, and character and firearm designs will be made according to the theme, creating new commercial opportunities.
For example, in terms of character development, &#34;Karabichu&#34; pays special attention to cultural elements. The character &#34;Lavi&#34; is based on the characteristics of Tang Dynasty clothing in Chinese culture, and its construction and color scheme draw inspiration from the style of the Jin Yi Wei. In the recent upgrade of the red skin, elements of Chinese landscapes were also incorporated into the graphics and patterns. Recently, &#34;Karabichu&#34; also launched dragon-themed firearms and limited edition dragon-themed skins for the Spring Festival.
It is worth mentioning that in order to enhance the fun of shooting games, &#34;Karabichu&#34; has also introduced a new gameplay feature called &#34;stringification,&#34; which transforms the game's 3D characters into 2D. Through various levels of integration and innovation, &#34;Karabichu&#34; has achieved impressive performance in terms of data, from closed beta testing to open beta testing.
Since its release, &#34;Karabichu&#34; has been hailed as a &#34;stock with potential&#34; and has appeared on the hot search list of Bilibili multiple times, according to market information.
In terms of performance on the WeGame platform, &#34;Karabichu&#34; has shown excellent click-through rates and conversion rates, consistently ranking in the top three of the popular new product list, with very impressive user retention. Currently, the operation of &#34;Karabichu&#34; as a whole is in the stage of climbing.
<h2>Expanding overseas and building a multi-platform global R&amp;D technology pipeline</h2>
In the current industry trend, the gaming industry has entered the &#34;Age of Exploration&#34; for going global, and globalization and multi-platform development have become very important growth points for the gaming industry.
According to Wang Xi, Vice President and Head of Investor Relations at IDREAMSKY, looking at the current global gaming player landscape, 40% play console games, 38% play PC games, and 79% play mobile games. If a company wants to develop globally and across platforms, the choice of the right track is crucial and determines whether the game has opportunities.
Looking at the entire shooting game market, the overseas shooting game market differs significantly from the domestic market. The proportion of shooting games in the overseas PC gaming market is significantly higher than that in the mobile gaming market. Among them, the largest revenue from PC gaming is in North America, accounting for 36%, followed by Western Europe and East Asia.
In the entire shooting game track, the revenue share of global PC and console games accounts for as much as 70%, significantly higher than that of mobile games.
In the overall landscape of the track, PC and console games have shown great market opportunities in the global market, which is also an important reason for &#34;Karabichu&#34; to choose to expand into overseas markets, according to Wang Xi.
According to Zhitong App, at the beginning of the product development, &#34;platform-wide and global&#34; has been one of the long-term goals of the &#34;Karabichu&#34; product team. To target such a huge market and multiple completely different platforms, the complex management of version branches becomes a problem.
To address this, IDREAMSKY is also building a new research and development technology pipeline based on multi-platform globalization, which includes grading art assets, applying different rendering technologies based on the differences in rendering on various platforms, and finally grading the entire project. For example, PC and console players can run all effects from L1 to L5, while other platforms can run from L1 to L3. In the future, this technology will also be applied to the development of other games by the company.
From the planning and pace of &#34;Karabichu&#34; this year, Zhitong App has learned that the entire product will be launched domestically and overseas. Among them, the domestic market is cooperating with Tencent, and the PC version has started public testing, while the mobile version will also start testing gradually this year. The overseas market will be distributed by IDREAMSKY itself, and preparations are currently underway for overseas PC and console testing, with the goal of starting public testing by 2024. Among them, overseas will become a major battlefield for the PC version.
Currently, the &#34;Karabichu&#34; team also attaches great importance to increasing production capacity, adjusting the update frequency from one version every three months in the past to one new character, one new map, and one new lounge every two months. New gameplay will also be introduced during public testing. In addition, the &#34;Karabichu&#34; team also encourages players to create gameplay and will further enhance custom rooms, allowing players to have more and more customization options and continuously enrich the gameplay.
In addition, to make the balance more transparent, &#34;Karabichu&#34; will also launch a big data system, allowing users to conveniently understand map attack and defense win rates, hero win rates, and other information.
According to IDREAMSKY management, for the company, last year was a turning point, and in the future, including &#34;Karabichu,&#34; products that have been invested in research and development for many years will be launched one after another. Entering 2024 will be the company's first year of harvest.
Regarding the performance of &#34;Karabichu&#34; after its launch, Dongwu Securities believes that the product content of &#34;Karabichu&#34; is excellent and the gameplay is innovative, and it is optimistic about its ability to accumulate core users through content operations before and after the launch, expand the user base, and perform well in revenue and long-term lifecycle operations after the product is launched. At the same time, Pu Yin International also expects that with the gradual improvement of IDREAMSKY's new game products, the company's cash flow will be greatly improved in 2024.
Looking at the entire gaming track, manufacturers that can achieve success in shooting games are usually able to squeeze into the top position in the track. International giants or domestic leading manufacturers almost all have flagship shooting games, as they represent companies that can enter the top of the entire development pipeline.
For IDREAMSKY, &#34;Karapetyan&#34; holds a special significance. Currently, &#34;Karapetyan&#34; is still in the stage of climbing the slope, iterating content and updating gameplay. If it can successfully follow the trajectory of a hit game in the future, it will undoubtedly be a powerful booster for IDREAMSKY in terms of industry status and market value.

01119

IDREAMSKY is gradually entering a period of harvest with the launch of the world's first 2D competitive shooting game "Karapichu". According to Pu Yin International, the improvement of IDREAMSKY's new game products will significantly enhance the company's cash flow in 2024. The success of this game will represent a new level of IDREAMSKY's research and development capabilities. As an undeniable major track, shooting games have maintained a growing trend in the market year after year. Successful shooting products have a long lifecycle and can continue to operate for more than a decade on PCs and consoles. Global leading shooting products such as "Counter-Strike" and "Counter-Strike: Global Offensive" have also demonstrated this characteristic.

The world's first 2D competitive shooting game "Karapichu" is now online, and IDREAMSKY is gradually entering the harvest period.