Good day, and welcome to the NetEase Fourth Quarter and Full Year 2025 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brandi Piacente. Please go ahead.

Thank you, operator. Please note that today's discussion will contain forward-looking statements relating to the future performance of the company and are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect NetEase's business and financial results is included in certain filings of the company with the Securities and Exchange Commission, including its annual report on Form 20-F and in announcements and filings on the Hong Kong Stock Exchange's website. The company does not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures, which should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the fourth quarter and full year 2025 earnings news release issued earlier today. As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the NetEase corporate website at ir.netease.com. Joining us on the call today from NetEase's senior management are Mr. William Ding, Chief Executive Officer; Mr. Hu Zhipeng, Executive Vice President; and Mr. Bill Pang, Vice President of Corporate Development. And I will now turn the call over to Bill, who will read the prepared remarks on William's behalf.

Thank you, Brandi, and thank you all for joining today's call. Before we start, I'd like to note that all percentages are based on RMB. In 2025, our total annual net revenues reached between RMB 111.2 and RMB 112.6 billion, with RMB 92.1 billion generated from games and value-added services. These figures mark another milestone for our company, demonstrating 23 consecutive years of revenue growth in online games since we launched the business 25 years ago. Throughout our 25 years in the gaming industry, our focus has always been on delivering exceptional player experiences, and we have consistently invested in exploring creativity and pushing technical boundaries. In our early days, our proprietary 2D game engine established Fantasy Westward Journey Online as a leader in its field. Transitioning to mobile in the early 2010s, our flagship in-house engines allowed us to provide low-latency, high-performance experiences on compact screens. This advancement was crucial in realizing the full potential of iconic titles like Knives Out and Diablo Immortal on mobile devices. Currently, as we continue to enhance these engines for AAA quality cross-platform experiences, they have formed a vital foundation for the success of our recent global initiatives such as Where Winds Meet. Alongside the development of our proprietary game engine, we also established our full stack 2 chains, enabling our team to innovate at scale. Drawing on our Internet company background, we continuously adopt new technologies to improve the game development process. We analyze emerging tech trends to determine their potential in enhancing our game development and create proprietary solutions to integrate the most impactful technologies into our production pipeline. This ongoing practice has allowed us to assimilate complex new technologies, significantly improving productivity over the years. Back in 2017, we recognized that artificial intelligence would dramatically transform our industry. Given that AI research aligns more closely with academic science than conventional technology, we established two dedicated research labs: NetEase Fuxi Lab and NetEase Game AI Lab, to explore AI’s real-time applications in gaming. Over the years, these teams have made remarkable progress in both research and implementation, achieving numerous victories in AI algorithm competitions, publishing hundreds of papers, and obtaining hundreds of patents. We have moved far beyond experimentation, fully integrating our AI technology into the game development process, where AI plays a critical role across our portfolio. AIGC has progressed rapidly in recent years, and we are closely monitoring advancements while dedicating substantial efforts to incorporate it into our production pipeline. Importantly, we do not view AI as a replacement for human creativity; instead, we see it as a force multiplier that can bring significant shifts to the game development process when applied responsibly. It can enhance creative work and bring genuine change to how games are developed. As a new technology with fundamentally different core attributes compared to traditional technologies, such as its probabilistic nature, AI poses unique challenges. Understanding how to effectively harness it, integrate it into the intricate game software engineering process, and transform probabilistic AI outcomes into consistent, high-quality components is quite challenging, with few precedents in the gaming industry. Fortunately, our extensive experience in game development has provided us with profound expertise in constructing production tool chains and a data and asset library covering hundreds of games. Most importantly, we have over 10,000 top-tier developers, positioning us well to tackle these challenges effectively. Over the past three years, our engineers have worked closely with our designers to explore how to unleash the power of AI while building clear guardrails. At the same time, we focus on how to use AI to take on the tedious repetitive non-creative tasks without getting in the way of human creativity. After many iterations, we believe we have established robust human oversight and feedback loops in place and AI has become a highly effective part of our game development process. Today, we're pleased to report that we have comprehensively integrated AI across our internal workflows, encompassing design, programming, art, and QA. This integration is not limited to a few BD teams; it is broadly accessible to developers at NetEase, driving meaningful efficiency across the board. In programming, our self-developed tool, CodeMaker, has evolved from a single AI-powered code completion tool to providing agent-level services. Our internal data shows a qualitative shift in developer habits. They have moved from using AI to complete a line of software code to leveraging AI to solve a complete development task. In art and animation, AI is easily accelerating the early-stage exploration process with our in-house tools, DreamMaker and Danqing, turning creative ideas into deliverable outputs in minutes. Our AI animation technologies, including multi-camera motion capture, facial motion capture, and generative AI-driven animation tools have significantly reduced the production cost and time required for character movement and expression animation workflows while substantially expanding our animation asset libraries and empowering artists to deliver richer and more expressive virtual characters and worlds. Furthermore, in quality assurance, we utilize AI to model more than 1 million diverse player behaviors to ensure stability in increasingly complex game worlds. This augments traditional time-consuming manual testing with data-driven validation, providing us with greater mathematical confidence in game balance and stability before public launch. But beyond efficiency, the ultimate goal is gameplay innovation. We have unlocked massive new interactive experiences for our players that were previously out of reach, and we still remain at a relatively early stage in exploring all the possibilities. Our exploration of AI-driven interactive characters began early with Sword of Justice, which pioneered one of the industry's earliest commercial implementations of intelligent NPC systems powered by large language models in a live game environment. This laid important technological groundwork for expanding the AI-driven character ecosystem. In Where Winds Meet, we have deployed over 10,000 AI-powered NPCs that engage players with natural language, realistic voices, and the potential for unexpected story outcomes, creating a level of vivid interaction that was previously impossible. Most importantly, these AI-powered NPCs are not static quest givers. They reflect the shadow of real human existence. Some may be struggling with poverty in the village. If a player has the patience to follow them, they could discover sub-stories like the hardship of adult life. These NPCs may not always be brilliant or lucky, but they're living their lives within their own reality, paralleling our own world. This level of detail creates a world that is not just a sandbox but a leading society. This is the essence of the open world we are building, places where every iteration, every interaction feels authentic, unpredictable, and deeply immersive. This not only provides players with more depth in-game experiences, but it has also helped to address the challenge of players consuming content much faster than developers can create it. We're also seeing AI act as a powerful personalized copilot and ecosystem multiplier. In NARAKA: BLADEPOINT mobile game, the voice AI teammate system represents a major inflection point, AI that doesn't just follow; it collaborates. As copilot teammates, AI provides customized interactive assistance to help players learn the rules of the game, making the complex high skill-based gameplay more accessible to a much broader audience and significantly increasing newcomer retention. Meanwhile, The Crew Mode in Sword of Justice empowers players to direct their own short videos with simple AI workflow, attracting millions of players who have created tens of millions of UGC works. Meanwhile, integrating these tools into the Eggy Party toolchain has empowered over 15 million creators to transform a single game into a self-evolving platform driven by the collective creativity of its players. Beyond enhancing our existing portfolio, we're also exploring new frontiers in AI-native gameplay. Moving beyond fixed presale logic, we're trying to utilize AI as a core engine to dynamically construct the in-game world and tailor real-time elements like missions, events, and other content to individual players' unique behaviors, unlocking infinite potential through deep customization. Underpinning this work is our experiment in AI-native production pipelines that leverage integrated toolchains to streamline workflow and significantly accelerate our innovation cycle. 2025 has been a year in which our long-term vision for AI has reached a critical point. We're no longer just talking about the potential of AI. We're seeing the results in the form of enhanced productivity, deeper player engagement, and expanded creative boundaries. We're on the threshold of a paradigm shift, and we believe we are well-positioned to serve as the epicenter of industry-defining innovations. We have built a very solid technological foundation, the proprietary engine, the full stack toolchains, which already internalized artificial intelligence capabilities, including AIGC capabilities, and we have seen early results from AI-powered gameplay. What we have achieved in the first 25 years of our game business was unimaginable when we started. We're at the dawn of a new time in our industry where productivity can be much more enhanced and creativity can be much more amplified. As we look ahead, we believe AI will fundamentally empower our creators to transcend the traditional development limits and reshape how interactive entertainment is created and experienced in the years to come. We think this is going to be the best time of the industry. With that, I would like to walk through several recent operational highlights, starting with our global expansion achievements. Where Winds Meet has gained strong global traction through a staged cross-platform launch, surpassing 80 million cumulative players and marking a meaningful milestone in our global expansion. Rooted in Eastern aesthetics and Wuxian storytelling, the game demonstrates how authentic cultural content can resonate with players worldwide. Following its global launch, it ranked #2 on Steam's global top sellers chart, won PlayStation's November Players' Choice Award, and topped the iOS download chart across more than 60 regions. Ongoing live service updates resulted in sustained strong engagement globally and domestically, with the title delivering its highest monthly revenue and daily active user on record in China in December, reinforcing its long-term momentum. Meanwhile, Sword of Justice successfully expanded internationally in November, introducing its next-generation MMO experience to more audiences, topping download charts in multiple key Asian regions. This title is another example that illustrates how our AI integrated production pipeline now directly elevates gameplay in large-scale online worlds, delivering richer responsiveness, deeper interactivity, and more immersive player experiences globally. Domestically, player engagement remains strong, supported by innovative live events and culturally grounded content that continues to deepen community resonance. Marvel Rivals, our superhero team-based PVP shooter, continues to build strong global momentum. The title earned broad industry recognition, including being named one of Time's Best Video Games of 2025, winning the Grand Award at PlayStation Partner Award of 2025, and ranking in Steam's Platinum tier of Best of 2025. Continued seasonal updates on new character releases have sustained strong player engagement with Season 6 featuring Deadpool, propelling the game to #2 globally and #1 in multiple markets, including the United States and Canada. A rapidly expanding international player community is further reinforcing the long-term durability of this growing franchise. Looking ahead, we continue to strengthen our pipeline to support the next wave of global growth. Sea of Remnants began technical testing across China and selected global markets earlier this month, featuring a distinctive art style and richly imagined open world. This ambitious original title aims to deliver a deeply immersive exploration experience with extensive player freedom where every naval journey feels unique. Development is also progressing steadily on ANANTA, our highly anticipated urban open world title. Building on our available insight from previous testing, the team is diligently refining core systems and content to meet high expectations from our global community. Shifting to our domestic portfolio, our long-standing franchises continue to demonstrate strong vitality supported by continuous content innovation and deeply engaged player communities. These titles remain a testament to our ability to operate a large-scale live service ecosystem over decades. Now in its 23rd year of operation, Fantasy Westward Journey Online delivered record high annual revenue in 2025, driven by historical peak revenue in the fourth quarter. Its ecosystem continues to evolve through innovative content designed to meet diverse player needs while preserving the classic mechanics cherished by long-term fans. The unlimited server, which is streamlined accessible gameplay, has been particularly effective at reigniting player enthusiasm. Fantasy Westward Journey Mobile also maintained strong momentum, delivering record high annual revenue in 2025. Diversified server models and ongoing content initiatives reinforce its leadership position within the MMO category. Beyond these legacy franchises, several established titles continue to deliver stable engagement and underscore the breadth of our diversified portfolio. Identity V is strengthening its global e-sports ecosystem through major competitive events and ongoing content updates. Eggy Party maintains strong player engagement, supported by expanding gameplay modes and continued investment in its fast-growing UGC ecosystem. Infinite Borders continues to drive long-term retention through innovative gameplay updates and specialized server models that deepen strategic complexity. NARAKA: BLADEPOINT is expanding its global community and e-sports presence, highlighted by the successful hosting of the J-Cup World Championship and active content roadmap updates designed to sustain long-term player engagement. Beyond the games we developed in-house, we also continue to expand our ecosystem through strategic partnerships. Original titles have driven sustained engagement for the past year, achieving a record high revenue in China and reaffirming our long-term commitment to the market. The launch of World of Warcraft's China-exclusive Titan Reforged server on November 14 sparked strong excitement among domestic players and interest from international influencers. World of Warcraft too once again saw enthusiastic support from Chinese players and set a new record in daily active users in China. Through close collaboration with our partners and shared commitment to putting players first, we remain focused on delivering high-quality experiences while strengthening our long-term global gaming ecosystem. We're also committed to delivering exceptional user experiences across our other business lines. Youdao continued to advance its AI-native strategy in 2025, driving healthy business development and achieving its first-ever net cash inflow from operating activities. Its Learning Services segment delivered robust growth through ongoing iterations of its tutoring features, while online marketing services applied to improve advertisement effectiveness and streamline advertising production. Smart Devices segment was supported by the ongoing popularity of Youdao tutoring pen products. NetEase Cloud Music continued to advance the high-quality development of its ecosystem. The platform enriched its differentiated music catalog through both copyright collaborations and our in-house music production, while introducing new features and experience upgrades that enhance music discovery and listening. In 2025, the platform delivered steady year-over-year growth in both its active user base and overall engagement. Yanxuan continued to strengthen its positioning as a private label brand known for premium quality products across its key categories, supported by an expanded product lineup and enhancements to key products. In closing, the results and operational milestones we have discussed highlight a clear trajectory. NetEase is not merely adapting to the AI era. We are advancing it through industrial application of technologies we have been building for years. Our large-scale integration of AI is a natural extension of our long-standing strategy and leadership in technological innovation. By embedding AI into the core of our production pipelines and product design from the living, breathing world of our games to intelligent productivity tools of Youdao and the personalized discovery algorithm of NetEase Cloud Music, we are exploring and shaping what's possible for future user experiences across a range of scenarios. Looking ahead, we remain focused on advancing technology and creative innovation to drive sustained growth. We view AI not as a replacement but as a powerful amplifier of human ingenuity, enabling us to deliver to our users worldwide what was previously out of reach. By staying at the epicenter of this technical paradigm shift, we're uniquely positioned to unlock unprecedented long-term value for our users, creators, and all of our stakeholders. That concludes William's comments. I will now provide a brief review of our 2025 annual results with a focus on the fourth quarter. Given the limited time on today's call, I will present some financial highlights in a streamlined manner. We encourage you to read through our press release issued earlier today for further details. As a reminder, all amounts are in RMB unless otherwise stated. Our total net revenue for 2025 was RMB 112.6 billion or USD 16.1 billion, representing a 7% increase year-over-year. For the fourth quarter, total revenues were RMB 27.5 billion or USD 3.9 billion. In 2025, net revenues from games and related value-added services reached RMB 92.1 billion, up 10% from 2024. In the fourth quarter, net revenues grew 3% year-over-year to RMB 22 billion. Specifically, net revenues from online games were RMB 89.6 billion for the full year, up 11% from 2024. In the fourth quarter, online game net revenues increased 4% year-over-year to RMB 21.3 billion. The quarter-over-quarter decrease in online games net revenue reflected the fact that the previous quarter benefited from the seasonal trends of more events triggering the summer holidays. The year-over-year growth in the fourth quarter was attributable to higher net revenues from self-developed games such as Fantasy Westward Journey Online and the newly launched games like Where Winds Meet and Marvel Rivals. Youdao's net revenues from 2025 increased approximately 5% year-over-year to RMB 5.9 billion. In the fourth quarter, net revenues rose 17% year-over-year to RMB 1.6 billion and were broadly stable quarter-over-quarter. The year-over-year increase in the fourth quarter was due to increased net revenues from Youdao's online marketing services and learning services. NetEase Cloud Music's net revenue decreased 2% year-over-year to RMB 7.8 billion for the full year. In the fourth quarter, net revenues were RMB 2 billion, representing a 5% year-over-year increase and remaining broadly stable quarter-over-quarter. The year-over-year growth in the fourth quarter was driven by continued healthy growth in membership subscriptions. Revenue from social entertainment services and others, however, remained lower compared with the same period of last year. Net revenues from innovative business and others totaled RMB 6.8 billion for the full year. In the fourth quarter, net revenues were RMB 2 billion, representing a 10% decrease year-over-year, while increasing 42% quarter-over-quarter. The year-over-year decrease reflected an increase in certain intersegment transaction eliminations. The quarter-over-quarter increase was led by increased net revenues from Yanxuan advertising services and several other businesses included within that segment. For the year, our total gross profit margin was 64.3%. In the fourth quarter, our gross profit margin increased year-over-year to 64.2% from 60.8% in the year before. Looking ahead at the fourth quarter margins in more detail, the gross profit margin was RMB 17.5 billion for our games and related VAS compared with 66.7% in the same period of last year. The improvement reflects changes in product mix, including a lower proportion of net revenues from licensed games, which generally have lower margins than our self-developed titles. Our gross profit margin for Youdao was 45.1% compared with 47.8% in the same period of last year. The decrease was primarily driven by higher net revenue contribution from online marketing services, which has a lower gross profit margin. Gross profit margin for NetEase Cloud Music was 34.7% in the fourth quarter versus 31.9% in the same period a year ago, primarily driven by steady growth in its core online music business. For innovative business and others, gross profit margin was 39.6% compared with 37.8% in the fourth quarter of 2024. The improvement was primarily driven by margin expansion in certain innovative businesses within the segment, along with the impact of certain intersegment elimination. Our total operating expenses for the fourth quarter were RMB 9.4 billion or 34% of our net revenues. Taking a closer look at our cost composition, our selling and marketing expenses accounted for 14.1% of the total net revenue in the fourth quarter. For the full year 2025, the ratio was 13%, remaining broadly in line with prior years. Our R&D expenses remained stable at 16.1% of total net revenues in the fourth quarter. For the full year 2025, the ratio was 15.7%, broadly in line with 2024, reflecting our continued and consistent investment into content creation and product development. The effective tax rate was 14.8% for the full year and 16.4% for the fourth quarter. As a reminder, the effective tax rate is presented on an accrual basis and the tax credit varies across each of our entities at different time periods depending on applicable policies and our operations. Our non-GAAP net income attributable to shareholders for the fourth quarter totaled RMB 7.1 billion or USD 1 billion, down 27% year-over-year. Non-GAAP basic earnings per ADS for the quarter was USD 1.58 or USD 0.32 per share. For the full year, non-GAAP net income attributable to shareholders was up 11% to RMB 37.3 billion or USD 5.3 billion, which is USD 8.38 per ADS or USD 1.68 per share. Additionally, our cash position remains strong. As of year-end, our net cash position was about RMB 163.5 billion compared with RMB 131.5 billion at the end of 2024. In accordance with our dividend policy, we are pleased to report that our Board of Directors has approved a dividend of USD 0.232 per share or USD 1.16 per ADS. Lastly, under our current USD 5 billion share repurchase program, we have repurchased approximately 22.1 million ADS at the end of December 31, 2025, for a total cost of approximately USD 2 billion. Thank you for your attention. We would now like to open the call to your questions. Operator, please.

Your first question comes from Jialong Shi with Nomura.

I will translate my question. Management has mentioned the AI topic in your opening remarks. I would like to dive deeper into the impact of AI on the online gaming industry. We noticed Google's recent Project Genie, which some media describe as a significant moment. Some believe that AI tools like those from Google could transform game development and speed up the entry of new game developers. What is the impact of AI on the competitive landscape for the online industry? My follow-up question is regarding the increase in investments by many Chinese internet companies in AI foundational models and computing power. Where is NetEase primarily focusing its AI investments?

Project Genie has been referred to by some in the media as a significant moment for DeepSeek. Many believe that AI tools, such as those from Google, will revolutionize game development and facilitate the entry of new developers in the field. What do you see as the impact of AI on the competitive landscape of the online industry? Additionally, I've noticed that numerous Chinese internet companies are increasing their investments in both AI foundational models and computing capabilities. I'm curious about where NetEase is primarily directing its AI investments.

Thank you, William. I will assist with the translation. Regarding your question about Genie and its potential impact of AI on the competitive landscape in our industry, we believe the market has largely misunderstood Genie’s influence on gaming. While it has lowered barriers, we can draw parallels with other industries, such as the transition from handheld cameras to smartphones, where the ease of video production has increased, yet the complexity of creating Hollywood-level films has grown. Although AI does make game development more accessible, it has simultaneously raised the bar for creating top-tier games. The widespread use of AI tools is likely to spur a surge in creative content, but now, the challenge for achieving a successful blockbuster has shifted from production to the capability for integration—especially in merging AI with intricate numeric systems, long-term game economies, and engaging social ecosystems. This requires significant design skills and operational experience, forming a substantial barrier for new entrants. In this AI era, while production costs are decreasing, the value of soft skills has escalated, especially judgment in gameplay design, understanding player needs, and refined artistic taste. Furthermore, we see greater potential in the Wan model to innovate a new kind of entertainment that diverges from traditional gaming. Currently, these models are not yet ready for practical use. Traditional games rely on certainty and strict logic, whereas Wan models operate probabilistically, offering greater creative freedom but also presenting higher uncertainty and control challenges, making them ill-suited for conventional games. They also struggle with issues such as significant latencies and high costs. Still, we are witnessing rapid advancements in these models, which marks just the beginning. We perceive this as a real opportunity for action teams, and NetEase will actively adopt these cutting-edge technologies to explore entirely new interactive experiences. Regarding the focus on investment, we don't bluntly pursue general large language models. Instead, we aim at building AI expertise who understand the game best and achieve highly efficient AI applications through comprehensive and deep integration. In vertical areas, high-quality private data is more important than computing power with application scenarios more important than parameter scales. In terms of differentiated competitive advantages, data and proprietary vertical models are very important. Vertical models trained on our years of gaming data can improve our internal industrialization efficiency more accurately than general ones. We're focusing on user experiences and commercialization. We focus on how AI translates into player experience. Currently, AI-native gameplay intelligence such as intelligent NPCs and UGC tools implemented in several titles have effectively improved user retention, proving our capability to translate technology into commercial value. And we also have a group of versatile talents who are highly skilled in our industry. They're not only proficient in algorithms and graphic engines, but also they have a deep understanding of game design. This cross-disciplinary capability is the key to ensuring AI technology truly leads, truly lands, and generates funds. We believe that the explosion of AI technology will accelerate the industry's integration process of the so-called survivor of the fittest process. We'll continue to maintain high-intensity investments in vertical models on AI-native gameplay and talent nurturing processes, leveraging AI technology to further expand our advantages in high-quality game development and long-term operations.

Your next question comes from Alicia Yap with Citigroup.

My question is about Where Winds Meet. The game has recently received very positive feedback from overseas users. Could management provide the retention rate for these users? Additionally, what are the key factors contributing to the game's strong performance internationally? Also, what unique gameplay mechanics or content have particularly resonated with and attracted players from around the world?

My question is related to Where Winds Meet. The game has recently received very positive feedback among overseas users. Could management share the retention rate of these overseas users? Additionally, what are the key factors contributing to the game's strong performance abroad? Furthermore, what unique gameplay mechanics or content have particularly resonated with and attracted international players?

Thank you, William. I will do the translation. Where Winds Meet, the overseas version launched on November 15. After its global launch, it quickly gained overwhelming popularity and positive review rates across multiple markets. With continuous operation, it topped various global charts multiple times and demonstrated outstanding performance in various operational metrics, including the retention rate. Where Winds Meet has received widespread acclaim from global players for its immersive high-quality Wuxian open-world experience, characterized by low-pressure, high-freedom gameplay achieved by separating single-player and multiplayer modes, with an operational focus on free-to-play, high-frequency updates, and customized monetization. The cross-platform availability accommodates modern players' diverse habits and meets the varied needs of different types of players. The game features Chinese Wuxian elements that create a vivid and dynamic Jianghu experience through various narrative and exploration dimensions. The blend of Eastern Wuxian martial arts, particularly in its skill system, and open-world experiences provide players with a new, deeply immersive experience. The combination of single-player and multiplayer modes ensures that both those who enjoy immersive exploration and those who appreciate social cooperation can find engaging content. The continuous updates of new maps, dungeons, and competitive gameplay, along with the expansion of casual gameplay, cater to a wide range of player preferences, including single-player, multiplayer combat, and casual experiences. Thank you.

Your next question comes from Alex Liu with Bank of America.

Given the recent success of FWJ PC Unlimited server, can management discuss whether this business model will be replicated across other legacy titles? If so, how should we think about the pace of rolling out that gameplay?

Given the recent success of the FWJ PC Unlimited server, can the management discuss whether this business model will be replicated across other legacy titles? And if that's the case, how should we think about the pace of rolling out that gameplay?

Thank you, William. I will provide the translation. In summary, Fantasy Westward Journey Online's unlimited server has achieved three main objectives: First, it has restored the most classic gameplay experience while also offering a unique gameplay experience. Second, it has restructured the economic system while ensuring that free trading remains a priority. Third, it has fully optimized the gaming process specifically for the unlimited servers. The classic experience reduces the entry barrier for players, and the unique experience allows the overall player base to grow. This approach's viability has been confirmed in the unlimited server. Our product team consistently engages with the player community and pays attention to their feedback. We believe we will continue to roll out updates across more titles, delivering richer and smoother experiences while rebuilding trust.

The next question comes from Yang Liu with Morgan Stanley.

Let me translate my question. My question is about Sea of Remnants, this new game. Could management update us on the current development status and the feedback from recent testing? What will be the commercialization method? What is the expected timing for the game's launch? Is it possible to launch it in the summer this year, and will it be a cross-platform global launch?

Let me translate my question. My question is about Sea of Remnants, this new game. Could management update us on the current development status and the feedback from the recent testing? What will be the commercialization method? What is the expected timing for the game's launch, and is it possible to launch it in the summer of this year? Will it be a cross-platform global launch?

Yes. Currently, development is fully on track, and our plan is to launch that officially in Q3. In the current round of technical tests that started on February 5, we are pleased to see active participation from players. Our second promotional video has garnered over 10 million views on Bilibili. Based on the initial feedback, we're glad to hear positive responses regarding product quality and reputation from various parties. We're still observing and collecting player feedback, and we'll implement targeted improvements and optimizations to further enhance the gaming experience and prepare for the official launch later this year. Thank you.

Your next question comes from Ritchie Sun with HSBC.

First of all, could you provide an update on the testing feedback? How many months do you estimate are left before the launch? Are there plans to introduce it in various markets and different forms? Secondly, regarding the upcoming Auto Chess titles, there are two in testing with game licenses. Considering there are already significant competitors in this genre, what is the strategic reasoning for entering this market? How does NetEase's product stand out against these established competitors?

How many months are left before the launch? Are there plans to launch in additional markets? Additionally, regarding the launch of Auto Chess titles, we currently have two titles in testing phases. Considering the strong competition in this genre, what is the strategy for entering this market, and how does NetEase's product stand out from the established competitors?

Yes. The data and feedback from the closed test in January both met our expectations. The retention rate and player feedback on the content have shown that our current product direction is sufficiently innovative and appealing. We are currently refining the product to ensure a higher level of completion and more enriching content when we launch in the market as scheduled. We are aiming for a simultaneous global launch across all platforms, including PC, mobile, and console. Thank you. William will address the next question regarding Auto Chess.

The retention rate and player feedback on the content have shown that our current product direction is innovative and appealing. Our product is still being refined to provide a greater level of completeness and richer content for its market launch, which is planned to happen simultaneously across all platforms, including PC, mobile, and console. Thank you. William will now address the Auto Chess question.

The Auto Chess category is well-established, and we are focusing on elevating and differentiating our presence within this recognized genre. We are incorporating elements from Chinese Demon and Ghost culture to make our game unique. This choice brings strong narrative and aesthetic qualities. Our goal is to create a high-quality Auto Chess game tailored for domestic players while leveraging our historical strengths in delivering top-notch development.

Your next question comes from Yang Bai with CICC.

I will translate by myself. The company has made notable strides in game globalization over the past few years with early successes like NARAKA and Marvel Rivals, followed by titles such as Where Winds Meet. I would like to ask the management about the overseas expansion strategies. Has the company developed a replicable path to success? Regarding game render expansion, how does the company plan its product pipeline for high-potential markets like the U.S. and Europe? Also, what is the company's global team structure and future talent strategy?

In light of the company's recent expansions with early successes like NARAKA and Marvel Rivals, followed by titles such as Where Winds Meet, I would like to ask the management about their overseas expansion strategies. Has the company established a replicable path to success? Additionally, regarding game render expansion, how does the company plan its product pipeline for high-potential markets like the U.S. and Europe? Lastly, what is the company's global team structure and future talent strategy?

Yes, our expansion into developed markets began in 2018 with success in Japan. Currently, we have titles like NARAKA, Marvel Rivals, and Where Winds Meet that have performed well in the Western market. This success required significant effort, showcasing our robust R&D capabilities. We are beginning to understand the key factors for success in overseas markets, particularly in Japan and the West, and we are confident in our ability to launch more successful titles in these regions moving forward. Regarding talent, we believe China has the richest talent pool in game development, and we are dedicated to nurturing top creative minds to create premium games that appeal globally.

Your next question comes from Lincoln Kong with Goldman Sachs.

So the first question is about Marvel Rivals. Now that it has been live for a year, how is the team assessing its future lifecycle? What strategies are in place to maintain its momentum and encourage ongoing product innovation? My second question is a follow-up on AI. Currently, AI applications in the gaming industry mainly focus on R&D assistance and NPC interaction. As these capabilities advance, how does management see the potential for AI in gameplay design, content generation, and long-term live service? Do we anticipate AI-driven core gameplay becoming the next major growth engine for the industry? Are there any planned products where AI is integrated as a core gameplay element? Additionally, how should we approach personalized or service-oriented monetization models based on AI?

As our capabilities evolve, how does management perceive the potential for AI in gameplay design, content generation, and long-term live services? Is there a chance that AI-driven core gameplay could become a significant growth engine for the industry? Are there any upcoming products that incorporate AI as a central gameplay element? Furthermore, how should we consider personalized or service-oriented monetization models influenced by AI?

Yes. First, we addressed the Marvel Rivals question. Marvel Rivals has remained stable one year after its launch, and our team continues to provide innovative content and gameplay. Our recently launched Season 6, featuring the first triple-row hero, has been well received by players. We believe that outstanding content with innovative experiences is essential for sustaining player engagement. Therefore, while we will continue our regular updates, we will also explore new experiences driven by new heroes, new gameplay modes, and social interactions. As for the question on AI, we have fully integrated AI into our production workflow, making it an essential asset that notably enhances art programming and QA. We are confident in AI's potential to deliver transformative player experiences, and we believe it will happen. NetEase is positioned as a pioneer in this area and is well-placed to explore this opportunity, which we will pursue aggressively. We have developed a strong pipeline of R&D resources for this next generation of AI-driven gameplay.

And that concludes the question-and-answer session. I would like to turn the conference back over to Brandi Piacente for any additional or closing comments.

Thank you once again for joining us today. If you have any further questions, please feel free to contact us directly. Have a great day. And for those listening from China, we wish you a Happy New Year. Thank you, everyone.