Title: Quarterly Quest 4 — Perfect World Hands Its Cash to Someone Else's FundSeries: Gamers With Attitude PODCAST — Quarterly QuestTagline: The business of games, for the people who invest in it.Summary: A red bottom line and a green cash flow, side by side in the same half-year paper. Perfect World — the Shenzhen-listed studio behind Jade Dynasty, Tower of Fantasy and April's global launch of Neverness to Everness — reported a net loss of about 118 million yuan for 2026's first half, while operating cash flow came in around 647 million yuan, up 28.89 percent. Over the same stretch it signed three fund subscription announcements worth roughly 600 million yuan, all as a limited partner, all into "emerging technology," with no voting seat, no consolidation, and not one industrial-synergy clause — while its R&D spend fell from about 2.23 billion yuan in 2024 to about 1.78 billion in 2025 and headcount dropped from 2,575 to 2,116. Tonight's question isn't whether the checks were placed well. It's what it means when a game company trades its product-development clock for a financial-investment one.This episode: Deep Dive ｜ The Playbook (26:59)Hosts: Shawn (publishing vet) & Serevnt (game dev)Chapters:0:00 Opening — a red bottom line, and cash up almost 29 percent3:12 Perfect World, and three fund checks in six weeks6:27 The clash — rent someone else's judgment, or lock seven years10:18 The one deal that fits the business — and has no price on it13:23 Two clocks — accounting timing vs. a business getting smaller16:48 The Scenario Room — efficiency, a hollow pipeline, or a split19:20 The replay — the QQ3 scoreboard stays frozen21:44 The blade — same GP, two game companies, one question25:10 Closing — whose story will the next game be?Scenario Room: Three scenarios, everything if-then, no verdict. Scenario A — the allocation works: the funds find their footing in AI or compute and post a paper gain, the company gets that tech exposure at a lower organisational cost than building it, and the cash from Neverness to Everness lands as recognised revenue over the coming quarters (the company says its contribution begins releasing from Q3 onward). Triggers: observable fair-value moves or investment income on the investment line in later filings; the live product's gross billings stop sliding. Scenario B — the swap's cost shows up: capital is locked through a 2-year investment plus a 5-year exit window, the R&D pipeline goes hollow. Triggers: R&D spend and headcount keep falling year on year; pipeline launches slip. Scenario C — both at once, structurally split: cash keeps flowing outward while the product line goes lightweight, and the company becomes a publisher that happens to hold financial assets. Triggers: investment assets' share of net assets keeps rising as the catalogue shrinks to smaller builds. Shawn leans A; Serevnt leans C, with B as the warning track. Which one do you think? [Vote link placeholder]The sharpest mirror — same GP, two game companies: Perfect World's September subscription went to Tianjin Lisi Xingshen (50 million yuan). Century Huatong's July commitment went to Tianjin Lisi Xingque (150 million yuan, 35.46 percent, its largest LP seat). Different funds, same manager: both run by Tianjin Lisi Mingtang, both under Hainan Lisi Private Equity, same controlling person — Cao Xi (public records: a founding partner of Monolith and a former Sequoia China partner). Within about two months, two listed game companies routed roughly 200 million yuan combined — our arithmetic — into different funds run by the same firm. Two data points, no conspiracy inferred: only the public facts of two announcements and the money each company actually put in. And the contrast that has already cashed in: Century Huatong's indirect stake in Moore Threads added an estimated 640 million yuan to its 2025 fourth-quarter net profit — about 53 percent of its prior-year net income — a realised line, not a promise.Sources (public; attributed with publisher + date):- Perfect World 2026 half-year report (Shenzhen Stock Exchange / Cninfo, 002624.SZ): H1 revenue about 2.75 billion yuan, down 25.47 percent; net loss attributable to shareholders about 118 million yuan (against a profit a year earlier); non-recurring-adjusted net loss about 211 million yuan; operating cash flow net about 647 million yuan, up 28.89 percent; cash and equivalents about 3.52 billion yuan, roughly a third of total assets; games revenue about 2.64 billion yuan, down 9.19 percent, about 96 percent of the total; games-segment net loss about 88.79 million yuan; selling expenses about 1.03 billion yuan, up 213.05 percent; R&D spend about 756 million yuan, down 19.80 percent; film-and-TV revenue about 103 million yuan, down 86.56 percent- Perfect World 2025 annual report: revenue about 6.66 billion yuan; net profit about 731 million yuan; operating cash flow net about 1.09 billion yuan; year-end cash about 3.55 billion yuan (about 33.88 percent of total assets). Company-disclosed data show R&D falling from about 2.23 billion yuan in 2024 (about 39.98 percent of revenue) to about 1.78 billion in 2025 (about 26.75 percent), with R&D headcount down from 2,575 to 2,116- Three fund subscription announcements (company filings): about 500 million yuan into Jizhi Dengyue II, a 14.2857 percent commitment to a fund with a provisional 3.5-billion-yuan target size and a 2-year investment plus 5-year exit period; about 50 million yuan into Lisi Xingshen; about 50.4 million yuan into Fuzhou Huizhu — roughly 600 million yuan total, all paid directly by the listed parent, all with a stated direction of "emerging technology," all with no voting seat, no consolidation, and no industrial-synergy clauses- VAST / Sanqi Wanwu: reported B and B-plus rounds totalling about 3 billion yuan, led by Matrix Partners China, with Perfect World listed among strategic investors — its ticket size not disclosed (company has not stated an amount)- Dividend: 3.30 yuan per 10 shares, about 640 million yuan total, about 87.59 percent of 2025 net profit — company filings. Dividend plus external subscriptions ≈ 1.24 billion yuan of cash out in one direction (our arithmetic)- Same-GP finding: Perfect World × Tianjin Lisi Xingshen and Century Huatong subsidiary × Tianjin Lisi Xingque — both managed by Tianjin Lisi Mingtang under Hainan Lisi Private Equity, controlled by Cao Xi — company announcements (Perfect World; Century Huatong) and public records; the roughly 200 million yuan combined total is our arithmetic- Century Huatong: indirect interest in Moore Threads of about 4.17 percent via Guosheng Capital; estimated impact on 2025 Q4 net profit of about 640 million yuan, about 53 percent of its 2024 attributable net income — company filings and Chinese financial media- Comparison set (as limited partners): Century Huatong — 150 million yuan into Lisi Xingque, 35.46 percent, largest LP; Giant Network — 150 million yuan into a Yunfeng vehicle (target size about 3 billion yuan), passive; miHoYo — 50 million yuan (about 9.76 percent) into an AI-and-metaverse fund and 100 million earlier; 37 Interactive — 50 million yuan (9 percent) into the same earlier fund, plus more than 30 direct hard-tech bets — Chinese financial media- Industry context: game approvals hit a seven-year high in 2025 (about 1,771, up about 25.07 percent) — which is why approvals are not the explanation for the R&D pullback; Tencent's 2025 R&D ran about 85.75 billion yuan, up about 21.18 percent, against Perfect World's two-year fall — industry tallies drawn from annual reports- Overseas reference: Sony's 250 million US dollar strategic investment in Epic (July 2020); Japanese game companies more often build their own CVC than hand money to a third-party fund ("more common," never "never") — public coverage- QQ3 Replay: the Kaiying–Wemade transaction still had no close or termination announcement as of September 17, 2026; approvals from the development regulator, commerce authority and foreign-exchange authority remain pending, with the company flagging timing as uncertain; Korean media reported a planned October 30 close (reported, not confirmed)Cross-promo: If you enjoy this podcast, check out the original Chinese version, 游戏人有态度.Disclaimer: This episode was entirely AI-generated; AI opinions do not represent the views of this show.Disclaimer (finance): Nothing in this episode is investment advice. We only discuss publicly available information. Always do your own research.
