Last night, Tencent Holdings released its Q2 financial results. The company reported quarterly revenue of 184.5 billion yuan, representing a 15% year-over-year increase. Looking specifically at the gaming business, quarterly revenue reached 59.2 billion yuan, equivalent to approximately 650 million yuan in daily earnings.

Notably, Honor of Kings appeared in Tencent's financial report for the 35th time. According to third-party data, Honor of Kings generated nearly 1.2 billion yuan in monthly revenue during the first half of this year.

Pony Ma also highlighted the outstanding performance of this "cash cow." He stated: "Evergreen games like Honor of Kings and PUBG Mobile have evolved toward platformization and increased AI applications... enabling our gaming business to perform excellently in both user engagement and revenue."

On the other hand, Honor of Kings has recently been embroiled in social controversy. Just one day before the financial report release, "China's first gaming algorithm lawsuit" went to trial, with Qingdao lawyer Sun Qianhe suing to demand disclosure of Honor of Kings' matching mechanism. The hearing lasted five hours without a verdict.

Sun Qianhe told the column that "Tencent is concerned that disclosing Honor of Kings' matching algorithm would lead to black market abuse." She expressed that a method should be found to protect players' right to know, though both sides still have significant disagreements on this point.

**Disagreement Between "Black Market Activities" and "Trade Secrets"**

Regarding the trial, Sun Qianhe stated, "They mainly relied on their own evidence, believing they had already fulfilled their algorithm disclosure obligations. Another point is they strongly oppose disclosing technical details, as they believe this would infringe on their legitimate technical secrets and rights, potentially causing negative black market activities and consequences."

Sun Qianhe holds the opposite view, believing that "previous descriptions in version updates or verbal responses from planners were not actually algorithm disclosures, but more like promises."

Previously, Sun Qianhe mentioned that trade secrets should not be used as a shield. "Apps with larger user bases than Honor of Kings have disclosed their various algorithms. If this constitutes a trade secret, then aren't other apps' algorithms trade secrets too?"

She also stated that the case hearing has concluded, and due to the opposing party submitting additional evidence before trial, on-site cross-examination could not be completed. Follow-up will involve submitting written cross-examination opinions to the court, with no additional hearings expected.

She summarized: "I hope both parties can find an appropriate balance, following the principle of minimum necessary disclosure, protecting both their claimed technical secrets and players' rightful right to know."

However, after the trial, numerous users continue to post screenshots of consecutive losses in matchmaking across social media platforms. In July this year, professional player Huahai, who has won seven KPL (Honor of Kings Professional League) championships, achieved a record of 25 losing MVPs in 33 matches during ranked games in Diamond tier, with a win rate below 25%.

The professional player's emotional breakdown during a livestream, crying about being unable to reach King tier and even calling for official intervention, sparked intense player discussions about the fairness of the matching mechanism.

**Monthly Revenue of 1.2 Billion Yuan: An Unshakeable "Cash Cow"**

Despite Tencent launching numerous new games annually, Honor of Kings remains its "cash cow." According to AppMagic estimates, Honor of Kings was the only mobile game to exceed $1 billion in revenue (approximately 7.17 billion yuan) during the first half of this year, dominating the rankings by absolute margin. This indicates Honor of Kings currently maintains monthly revenue capability of 1.195 billion yuan.

Previously, Honor of Kings achieved global revenue "three consecutive championships" from 2022 to 2024. Moreover, Honor of Kings maintained remarkable growth rates, with 2024 revenue increasing 26% year-over-year even without launching new commercial products in December of the previous year.

Additionally, data from the Game Industry Committee's "Q1 2025 China Gaming Industry Quarterly Report" shows increased revenue share for MOBA, shooting, strategy (including SLG), and action game categories, with MOBA category growth primarily driven by Honor of Kings reaching record-high revenue.

According to the latest financial report, Tencent's Q2 revenue reached 184.5 billion yuan, up 15% year-over-year; net profit attributable to shareholders was 55.6 billion yuan, up 17% year-over-year; gross margin improved from 53% in the same period last year to 57%. Gaming business performed brilliantly, with domestic market gaming revenue at 40.4 billion yuan, up 17% year-over-year, and international market gaming revenue at 18.8 billion yuan, up 35% year-over-year, equivalent to monthly revenue of 19.7 billion yuan.

Evergreen games including Honor of Kings, Valorant, and PUBG Mobile also achieved revenue growth. International market gaming revenue increased 35% year-over-year to 18.8 billion yuan, setting new historical highs for four consecutive quarters, with growth rates reaching quarterly records since international market revenue began separate disclosure.

Industry analyst Zhang Shule believes that without similar disruptive innovative competitors or major disruptions in gaming platforms (such as the historical shift from PC to mobile), Honor of Kings will continue maintaining its dominant position as a competitive game category.

**"Blockbusters" and "Decline" Coexist**

Notably, behind the "blockbuster" Honor of Kings IP lies the "disappointment" of multiple derivative works. In November 2022, Tencent simultaneously announced three Honor of Kings derivative games that generated significant player anticipation, including the UE5 open-world "Honor of Kings: World," side-scrolling fighting game "Dawn of Stars," and auto-chess "Honor of Kings: Magic Chess." Honor of Kings: World, with its massive open-world game design, was considered the Honor of Kings version of Genshin Impact, attracting considerable attention.

None of these three games were mentioned in Tencent's Q2 financial report. According to public reports, all three games received publishing licenses between 2023-2025 but none have officially launched to players.

Each game has its own fate:

Honor of Kings: Magic Chess, as an auto-chess game with Honor of Kings IP, attracted massive pre-registrations exceeding 8 million after its November 2022 announcement. However, after releasing developer diaries in March 2023, it entered a year-long "technical silence" and still hasn't launched its official version as of August 2024, fading from many people's attention.

Dawn of Stars initially appeared as "Codename: Dawn," with official website copy hinting at "large world action," ultimately becoming 2.5D side-scrolling fighting + PVE dungeon crawling. However, early demonstrations were criticized for imitating Nintendo's side-scrolling fighting game Super Smash Bros. Subsequently, the game's positioning "flip-flopped," adjusting from "side-scrolling fighting" to "action battle royale," before announcing closure of its advance test servers in December 2024 with full refunds, entering an adjustment period with unclear prospects.

Honor of Kings: World, most likely to launch to players this year, has also experienced a lengthy development cycle. This game received its license in January 2023, conducted GDC closed demonstrations in March 2025, and only opened official website pre-registration in April. Officials confirmed use of UE5, open world + multiplayer combat, but scene density was criticized by players as "mobile game enlargement." Additionally, while officials promised "no pay-to-win mechanics," they haven't provided sustainable business models, leading industry insiders to question its ability to compete with open-world games represented by Genshin Impact.

Industry analyst Zhang Shule believes developing derivative games for Honor of Kings, as Tencent's most profitable major IP, presents significant challenges. He explained: "Honor of Kings is already a top-tier gaming IP. Launching games in other categories that aren't sufficiently brilliant could tarnish the IP, creating substantial pressure for Tencent."

He concluded, "Enormous pressure is an inevitable challenge for Honor of Kings IP derivatives, and it can easily become a losing proposition."