ARCHOSAUR GAMES (09990.HK) disclosed in its interim report on August 22, 2025, that the company achieved operating revenue of RMB 634 million in the first half of the year, representing a 44.4% year-on-year increase and marking the third consecutive interim period of growth.

Despite significant revenue growth, the company has yet to achieve full profitability, recording a loss of RMB 11.7 million during the period. However, this represents a substantial 91.3% reduction compared to the RMB 134 million loss in the same period last year. The adjusted net loss was only RMB 7.7 million, down 93.6% year-on-year.

**Strong Revenue Growth with Significantly Narrowed Losses**

In the first half of 2025, ARCHOSAUR GAMES generated revenue of RMB 634 million, compared to RMB 439 million in the same period of 2024, marking a 44.4% increase. This growth was primarily driven by the domestic launch of two new games, "Dragon Raja: Gates of Cassell" and "Against the Wind," along with the continued stable performance of flagship title "Shining Nikki."

The company maintained a gross profit margin of 71.4%, reflecting industry-high levels and demonstrating efficiency in game development and operations. However, R&D expenses remained high at RMB 265 million, roughly flat compared to the previous year, while sales and marketing expenses increased to RMB 222 million, up 28.7% year-on-year.

Net cash flow from operating activities was negative RMB 36.079 million, which, while still negative, showed significant improvement from negative RMB 68.313 million in the same period last year.

**"Shining Nikki" Becomes Growth Engine**

The female-oriented mobile game "Shining Nikki" has emerged as ARCHOSAUR GAMES' star product. Since its launch, the game has ranked in the top ten of China's iOS game revenue charts more than ten times, achieving its highest monthly profit since launch in January 2025.

As of the earnings announcement date, the game's cumulative global revenue has exceeded RMB 2 billion. In the first half of 2025, its average daily active users (DAU) in mainland China surpassed the average levels of both 2024 and 2023.

During the summer period, "Shining Nikki" achieved peak average DAU for 2025 through updates and promotional activities from July to the earnings announcement date.

**Two New Games Contribute Significant Growth**

"Dragon Raja: Gates of Cassell" is a strategy card mobile game adapted from the popular IP "Dragon Raja" series, launched domestically in September 2024. The game topped the iOS free charts on its first day and maintained the top position for a week, becoming a new growth driver for the company.

During the summer of 2025, the game launched its first UR twin partners 'Chu Zihang & Xia Mi' along with themed activities, successfully driving significant improvements across key metrics. August 1st recorded peak daily DAU and new user acquisition for the year.

Another new title, "Against the Wind," is a Chinese-style cultivation-themed idle RPG mobile game that officially launched in mainland China during the first half of 2025. It topped the iOS free game charts on its pre-download day, with new user acquisition and retention data exceeding expectations.

**Domestic Market Growth, Declining Overseas Proportion**

By region, ARCHOSAUR GAMES generated approximately RMB 512 million from mainland China in the first half of 2025, up 68.3% year-on-year, accounting for 80.7% of total revenue.

In contrast, overseas market revenue was RMB 123 million, down 9.5% year-on-year, with its share declining from 30.8% in the same period last year to 19.3%.

This shift in revenue structure reflects the success of new products in the domestic market while highlighting challenges in overseas expansion. The company plans to launch "Dragon Raja: Gates of Cassell" and "Shining Nikki" in Southeast Asian and Korean markets in the second half of 2025 to seek overseas growth.

**One Step Away from Profitability**

Despite significant revenue growth, ARCHOSAUR GAMES has yet to achieve full profitability. The loss for the first half of 2025 was RMB 11.7 million, with an adjusted loss of RMB 7.7 million.

The company's main challenges include persistently high R&D investments and declining overseas revenue share. Additionally, while the gaming industry's user base has grown to nearly 679 million, reaching historical highs, competition has intensified.

However, policy support continues to strengthen. In April 2025, the National Press and Publication Administration and nine other departments issued the "Network Publishing Technology Innovation Leadership Plan," supporting joint R&D and adaptation between online games and graphics processors, encouraging leading companies to focus on breakthrough core underlying technologies.

With "Shining Nikki" launching in the Korean market in September, "Dragon Raja: Gates of Cassell" continuing overseas expansion, and further optimization of the company's R&D and marketing efficiency, achieving profitability may be realized in the second half of the year.

Gaming industry competition has shifted from scale expansion to quality competition. Whether ARCHOSAUR GAMES' strategy of "premium quality, multi-category, integrated development and operation, and globalization" can lead it out of prolonged losses remains to be seen by the market.