Guotai Haitong has released a research report stating that the essential breakthrough of world models lies in interactivity, with AI interactive film-games serving as the entertainment vanguard, and combined with the recovery of XR devices, this opens a new content cycle. 1) Gaming: the main battlefield for AI interactive film-games, benefiting from both cost reduction and efficiency gains as well as gameplay innovation. 2) Film and television: AI short dramas are the starting point for interactive film-games, with content supply costs dropping significantly. 3) Marketing: AI material generation offers the most direct cost reduction and is the segment with the fastest commercialization realization.

The main views of Guotai Haitong Securities Co., Ltd. are as follows: World models have entered a period of intensive iteration, with investment and financing enthusiasm surging. World models are the underlying technology framework that enables AI to possess environmental cognition, reasoning, and decision-making capabilities, the core of which is allowing AI to imagine consequences and predict the future in its mind before taking action, just like humans. In the second half of 2026, global world models entered a period of intensive iteration, with technology routes diverging into multiple orientations. In terms of investment and financing, world model companies have attracted more favor, with AMILabs and World Labs both raising over $1 billion, mainly in seed and Series A rounds. Domestic world model investment and financing is equally active, with companies such as Zhipingfang, Kuwow Technology, and Shengshu Technology intensively securing large-scale financing from January to July 2026. From the perspective of implementation maturity, 3D generation and spatial intelligence capabilities have achieved productization and are expected to be applied first in the gaming and film-television sectors, and a new cycle for entertainment content may be approaching.

AI interactive film-games are expected to become the vanguard of world model entertainment content. The core of world model-generated entertainment content lies in interactivity, as AIGC implementation in the entertainment field advances from content production and audiovisual presentation toward interactivity, where user choices can change plot direction, scene states, and even character fates in real time. Currently, the AI short drama market has basically matured, with China's AI short drama market size reaching 18.98 billion yuan in 2025 and expected to reach 70.6 billion yuan in 2026, and AI interactive short dramas have subsequently emerged first. At the same time, Douyin and Kuaishou are both ramping up AI interactive content, with the EA version of "Bu Wen Fanchen" estimated to have sold nearly 300,000 copies within three weeks of launching on Steam, and the entry of the leading IP "The Three-Body Problem: Eve of Judgment" pushing AI interactive film-games onto an industry-level channel. Looking toward the endgame, AI interactive film-games will complete a three-stage leap from live-action branching trees to AI-generated imagery and then to world simulation, where interactivity is the reason for payment and the core of experience, game mechanics are the commercial skeleton and long-term operation carrier, and film-style AI generation is a presentation-layer tool. According to Gamma Data forecasts, AI is expected to bring approximately 53.3 billion to 84.6 billion yuan of new market space to China's gaming industry in the future.

XR head-mounted devices are an important carrier, with leading enterprises focusing on building and improving the industrial chain. As an important carrier for world model-generated entertainment content, XR head-mounted display devices are expected to resume growth in 2027 after experiencing a downturn over the past few years. In September-October 2026, Meta completed iterations of VR and smart glasses products at the Connect conference, the world's first split-type XR glasses equipped with Android XR, XREAL AURA, was released, and ByteDance's PICO new device Space Pro may be released on December 2 with its self-developed world model also expected to appear soon. The device renewal period resonates with world model iteration, with world models responsible for generating content and headsets responsible for presenting content, and under supply-demand matching, the virtual 3D world envisioned by the metaverse is expected to gradually materialize.

Risk warnings: World model technology progress falling short of expectations, AI interactive film-game commercialization falling short of expectations, XR head-mounted device shipment recovery falling short of expectations, policy and regulatory risks, and copyright and IP licensing risks.