Kingsoft Games Shows Signs of Fatigue: Revenue Declines, New Games Encounter "Waterloo"

How does AI · Kingsoft Software respond to the gaming business slowdown through strategic adjustments?

Reporters from Zhongjing: Xu Xinyi and Wu Kezhong Shanghai report

On March 25, Kingsoft Software (03888.HK) released its full-year 2025 and Q4 financial reports. The financial report shows that, as one of the main sources of revenue, online games and other businesses became a burden for performance growth in 2025—annual revenue of 3.75B yuan, down 28% year-on-year.

Looking at quarterly data, the downward trend in gaming business continued: Q4 revenue was only 868 million yuan, down 33% year-on-year, and also down 3% quarter-on-quarter. Since the beginning of 2025, this segment’s revenue has declined for several consecutive quarters with no clear signs of recovery.

The failure of “Jie Xian Ji” dragged down Kingsoft’s gaming segment performance and triggered personnel and strategic adjustments at Xishanju. Kingsoft CEO and Xishanju Chairman Zou Tao stated that for some non-strategic game projects, appropriate adjustments and contractions will be made to free up resources for mid- to long-term valuable projects.

Decline in game revenue

The financial report shows that in 2025, Kingsoft’s online games and other business revenue was 3.75B yuan, a 28% decrease year-on-year. This segment contributed half of the total revenue in 2024, but in 2025, its share dropped to 39%.

In 2025, Kingsoft’s gaming revenue continued to decline. From Q1 to Q3, revenue from Kingsoft’s online games and other businesses was 1.04B yuan, 952 million yuan, and 898 million yuan respectively, with decreases both quarter-on-quarter and year-on-year. By Q4, this segment’s revenue was 868 million yuan, down 33% year-on-year and 3% quarter-on-quarter.

Zou Tao said this was mainly due to the high base in the same period last year and the decline in existing game revenues.

Popular games under Kingsoft include “Jian Wang 3” and “Dust White Zone.” On July 2, 2025, the mech-themed shooting game “Jie Xian Ji” was launched. These game businesses are mainly operated by Kingsoft’s studio Xishanju.

In the conference call after the financial report release, Zou Tao said that “Jie Xian Ji” did not meet expectations after launch, and “Jian Wang 3” was affected by external competitive environment, leading to a decline in revenue from older games.

Public information shows that “Jie Xian Ji” was approved in 2014, developed for many years, and faced a “ Waterloo” after launch. Steam DB real-time data shows that as an online multiplayer game, “Jie Xian Ji” had a peak concurrent online count of over 130k players at launch, but the player count then plummeted to several thousand.

In Q3 2025, when “Jie Xian Ji” was launched, Kingsoft’s online games and other business revenue did not increase but decreased, and this game consumed a large amount of marketing expenses. Kingsoft’s Q3 2025 financials show sales and distribution expenses reached 564 million yuan, a 55% increase year-on-year and a 33% increase quarter-on-quarter, mainly due to increased promotion and advertising related to online game business.

Strategic adjustments

The failure of “Jie Xian Ji” also led to personnel adjustments at Xishanju.

On December 1, 2025, an internal letter from Xishanju showed that Guo Weii resigned as CEO but continued as chief producer of Xishanju, with Kingsoft CEO and Xishanju Chairman Zou Tao serving as acting CEO.

Guo Weii joined the “Jian Wang 3” project team in 2004, serving as executive chief planner, chief planner, and executive producer, among other roles. In 2016, he was appointed Vice President of Kingsoft and CEO of Xishanju, and in 2018, promoted to Senior Vice President of Kingsoft. He is also the producer of “Jie Xian Ji.”

After serving as Xishanju CEO for several months, Zou Tao shared his thoughts during the financial report conference call.

He said that the “Jian Wang 3” series, including “Jian Wang 3,” is undoubtedly the foundation of Xishanju’s business, with many loyal players and fans accumulated over the years. Although “Jian Wang 3” has been somewhat affected by external competition, its active user numbers remain very stable.

Regarding “Jian Wang 3” and the “Jian Xia Qing Yuan” IP, Zou Tao believes that continuous investment should be maintained to serve existing users well and provide better game quality and content.

“Jian Wang 3” was publicly tested in 2009 and has undergone multiple iterations. In an era when online game monetization focused on combat power, “Jian Wang 3” mainly charged for cosmetics, with minimal impact on competitive fairness, thus gaining player recognition.

However, as competition in online gaming intensifies, more MMO games have lowered payment barriers to increase DAU (daily active users), thereby boosting revenue and creating competitive pressure for “Jian Wang 3.”

Kingsoft’s financial report disclosed that in Q4 2025, “Jian Wang 3” once again improved visual performance through technological upgrades; it will further strengthen investment in gameplay and story experience, with the “Jian Xia Qing Yuan” series PC and mobile game “Jian Xia World: Origins” continuing to iterate content and versions.

Regarding “Jie Xian Ji,” Zou Tao admitted its performance was below expectations.

In November 2025, Guo Weii issued a public statement saying that a “Jie Xian Ji” “Unlimit Edition” would be launched around the anniversary, and it would be re-released through more channels including PS5.

As of April 2, “Jie Xian Ji” reached a peak of 1,708 concurrent players on Steam within 20 hours.

Zou Tao said that for some non-strategic game projects, appropriate adjustments and contractions will be made to free up resources for mid- to long-term valuable projects. He said he could not disclose specific adjustments at this time.

Additionally, Zou Tao stated that despite some games underperforming, internally this is seen as a “time to clear out the old and welcome the new.” In the future, the creative organization at Xishanju will change, with roles being de-emphasized and creative value highlighted. With AI assistance, Xishanju’s production efficiency may further improve.

As for the recently indefinitely suspended “Dust White Zone,” Kingsoft has not disclosed further information. The reporter contacted Kingsoft for further interview, but as of press time, no reply has been received.

代理运营爆款

Despite setbacks in self-developed new games and declining old game revenues, Kingsoft quickly ushered in another hit—Steam port game “Goose Goose Duck.”

In early 2026, “Goose Goose Duck,” operated by Kingsoft Shiyou as an agent, was launched on Chinese mobile platforms. According to Zou Tao, on its first day, the game gained over 5 million new users, with total new users surpassing 30 million, and for most of the past two months, it topped the iOS free charts, with DAU (daily active users) stable around 3 million.

Zou Tao revealed that the company has planned a series of updates for “Goose Goose Duck” until summer, “We hope to steadily and continuously grow the user base stage by stage.”

“Goose Goose Duck” was first released in 2021. But in 2023, after Blizzard’s games suddenly exited China, it was popularized by Chinese Blizzard game streamers, with peak concurrent online players once exceeding 700k.

“Goose Goose Duck” is a social deduction game similar to Werewolf. But compared to similar games, it has many innovations. First, it uses cute animal characters, giving players a fresh feeling from the start; second, it features over 40 roles, each with unique attributes, and includes neutral characters like pelicans and storks, making every player have tasks, increasing gameplay diversity; the game also has many quirky features, such as pelicans eating other players, and players eaten can still speak from inside the pelican’s belly, with some even holding concerts inside.

At that time, the large influx of players for “Goose Goose Duck” mainly came from China. On overseas mainstream streaming platform Twitch, even at its peak, viewership was only a few thousand. The sudden influx of Chinese players also caused multiple server crashes.

However, over time, “Goose Goose Duck”’s popularity on Steam has significantly declined. As of April 2, its highest 24-hour concurrent online count was over 10k.

Like most blockbuster buyout PC games, despite a fiery start, it does not have the long-lasting vitality of popular Chinese mobile games. Whether it can further activate its potential and reach more players through Chinese team agency remains to be tested by the market.

Regarding future operations of “Goose Goose Duck,” Zou Tao said that currently, DAU is the top priority, focusing on maintaining version stability and improving service quality, while revenue and monetization are not the main focus.

“Based on retention data, we are confident that through iterative updates, we can further increase the game’s DAU. Given industry performance, there is still great potential for monetization growth,” Zou Tao said. The company also plans to expand “Goose Goose Duck” overseas and has many ideas for IP derivatives, “but the immediate priority is stable operation and breaking new user records.”