CMGE (00302) announced that the group expects to record a net loss of no more than RMB 650 million for the six months ended June 30, 2025. The group reported a net loss of RMB 241 million for the six months ended June 30, 2024.

According to the announcement, the performance decline was primarily attributed to the following factors:

(1) Despite overseas business revenue showing significant growth compared to the same period in 2024, the group's self-developed flagship game "The Legend of Sword and Fairy World" launched in February 2025 failed to meet expectations. Additionally, revenue generated from mainland China for the six months ended June 30, 2025, declined compared to the same period in 2024, resulting in approximately 40% decrease in total revenue for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

(2) Non-operating other expenses for the six months ended June 30, 2025, increased compared to the six months ended June 30, 2024, mainly due to write-offs of prepaid copyright fees for certain games that had not yet been launched during the six months ended June 30, 2025, and increased fair value losses on financial assets measured at fair value through profit or loss.

(3) Sales and distribution expenses for the six months ended June 30, 2025, increased significantly, primarily due to large-scale marketing and promotional activities for "The Legend of Sword and Fairy World" and substantial promotional expenses incurred for launching new games such as "Age of Wushu Dynasty."