CMGE H1 Loss Narrows from 639M to 90M, Slashes Marketing and R&D; Xiao Jian: No More Large-Scale Game Projects

Summary

CMGE (China Mobile Games) released its 2026 interim results, posting total revenue of RMB 355 million, down 53.5% year-on-year, while net loss attributable to shareholders narrowed dramatically from RMB 639 million to RMB 90 million, a reduction of 86%. This achievement was driven by extreme cost control: selling and distribution expenses plunged 91.8% from RMB 373 million to RMB 31 million, and R&D costs were cut by 75.5%. As the industry emphasizes efficiency, CMGE has compressed losses through ruthless cost-cutting, but at the expense of halved revenue. At the results conference, Chairman Xiao Jian stated that the company will no longer initiate large-scale game projects, instead adopting a 'small-cost trial-and-error' approach focusing on three core tracks. Investors are more concerned about how CMGE will rebuild its growth curve beyond cost reduction. This shift reflects the industry's transition from expansive growth to refined operations, though it raises questions about long-term innovation. CMGE's transformation success depends on whether new tracks can generate sustainable revenue and product breakthroughs, offering lessons for smaller game companies.