Kingsoft Games Shows Signs of Fatigue: Cash Flow Revenue Slips and New Games Face a “Waterloo”

@E1@ Shanghai report

On March 25, 金山软件 (03888.HK) released its 2025 full-year and fourth-quarter financial reports. The reports show that among its network games and other businesses—one of its revenue pillars—2025 became a drag on performance growth. Full-year revenue was RMB 3.75B, down 28% year over year.

By quarter, the decline in its game business continued: in the fourth quarter, revenue was only RMB 868 million, down 33% year over year, and also down 3% quarter over quarter. Since the beginning of 2025, the revenue from this segment has fallen for multiple consecutive quarters, with no obvious signs of recovery.

The failure of 《解限机》 not only dragged down 金山软件’s game segment performance, but also triggered personnel and strategy adjustments at 西山居. 金山软件 CEO and 西山居 CEO 邹涛 said that for some game projects that do not have strategic value, the company would appropriately adjust and scale them back, freeing up effort for mid- to long-term valuable projects.

Game revenue declines

The financial report shows that in 2025, 金山软件’s revenue from network games and other businesses was RMB 3.75B, down 28% year over year. In 2024, this segment contributed “half of the revenue” overall, but in 2025 its revenue share fell to 39%.

In 2025, 金山软件’s game business revenue continued to decline. From the first quarter to the third quarter, 金山软件’s revenue from network games and other businesses was RMB 1.04B, RMB 952 million, and RMB 898 million respectively; both quarter-over-quarter and year-over-year declines were seen. In the fourth quarter, the segment’s revenue was RMB 868 million, down 33% year over year, and down 3% quarter over quarter.

邹涛 said this was mainly due to the relatively high comparison base from the same period last year and the current decline in game revenue.

热门 games under 金山软件 include 《剑网3》 and 《尘白禁区》, among others. On July 2, 2025, the mech-themed shooter 《解限机》 launched. These game businesses are mainly operated by 西山居, a studio under 金山软件.

During the telephone conference after the financial report was released, 邹涛 said that after 《解限机》 launched, performance failed to meet expectations, and 《剑网3》 was affected by the external competitive environment, causing revenue from older games to decline somewhat.

Public information shows that 《解限机》 was approved for development in 2014. After years of development and finally launching, it hit a “market failure.” Steam DB real-time data shows that as an online multiplayer game, when 《解限机》 launched its peak concurrent players exceeded 130k; afterward, the number of players fell sharply to only a few thousand.

In the third quarter of 2025 when 《解限机》 launched, 金山软件’s revenue from network games and other businesses did not increase but declined instead, and the game burned a large amount of marketing expenses. 金山软件’s third-quarter 2025 financial report shows that sales and distribution expenses reached RMB 564 million, up 55% year over year and up 33% quarter over quarter. The reason was an increase in promotions and advertising spending related to the network games business.

Strategic adjustments

The failure of 《解限机》 also led to personnel changes at 西山居.

On December 1, 2025, an internal letter from 西山居 showed that 郭炜炜 stepped down as CEO but would continue to serve as 西山居’s Chief Producer. 金山软件 CEO and 西山居 Chairman 邹涛 would serve as acting CEO of 西山居.

郭炜炜 joined the 《剑网3》 project team in 2004. He held roles such as executive chief planner, chief planner, and executive producer. In 2016, he became 金山软件’s Vice President and CEO of 西山居. In 2018, he was promoted to Senior Vice President of 金山软件. He is also the producer of 《解限机》.

After serving as 西山居 CEO concurrently for several months, 邹涛 shared his thoughts during the telephone conference after the financial report.

He said that including the “Sword Heroes” series represented by 《剑网3》, there is no doubt that it is the business foundation of 西山居. Over so many years, it has accumulated many players and fans loyal to this IP. Although 《剑网3》 has been slightly affected by the external competitive environment, its number of active users remains very stable.

For the 《剑网3》 and “Sword Hero Legend” IP, 邹涛 believes investment should continue—to serve existing users well and provide better game quality and content.

《剑网3》 entered public beta in 2009, and after multiple iterations and updates. In an era when in online games, the focus of monetization was concentrated on combat power, 《剑网3》 mainly charges for appearances. The impact of paying on competitive fairness is negligible, and thus it has been recognized by players.

However, today, competition in online games is becoming more intense. More MMO games lower the payment barrier, thereby expanding DAU (daily active users) and increasing game revenue, which creates competitive pressure on 《剑网3》.

The 金山软件 financial report discloses that in the fourth quarter of 2025, 《剑网3》 once again improved its visual performance through a technical upgrade. It will further strengthen investment in gameplay and story experience. The “Sword Heroes” PC and mobile titles, 《剑侠世界：起源》, will continue iterating content and versions.

Regarding 《解限机》, 邹涛 admitted that its performance did not meet expectations.

In November 2025, 郭炜炜 previously released a public letter saying that around the anniversary, the company planned to bring out a brand-new 《解限机》 “解限 Edition,” and “strike again” through more channels including logging in via PS5.

As of April 2, 《解限机》’s peak concurrent players within 20 hours on Steam were 1,708.

邹涛 said that for some non-strategic game projects, the company will appropriately adjust and scale them back, freeing up effort for mid- to long-term valuable projects. Regarding the specific adjustments, he said it is not convenient to disclose at present.

In addition, 邹涛 also said that although some games have not performed as hoped, internally they see this as the time for “getting rid of the old and welcoming the new.” In the future, 西山居’s creative organization structure will change: job functions will be weakened, while creative value will be highlighted. With AI assistance, 西山居’s production efficiency may further improve.

As for 《尘白禁区》, which has been suspended indefinitely in the near term, 金山软件 has not disclosed additional information. A reporter reached out to 金山软件 for further interviews; as of the time of publication, no response was received.

Proxy operations yield a breakout hit

Despite the failure of newly developed games and the decline in revenue from older games, 金山软件 quickly welcomed another breakout hit—Steam-ported game 《鹅鸭杀》.

At the beginning of 2026, 《鹅鸭杀》, operated by 金山世游 as an agent, launched on China’s mobile game platform. According to 邹涛, on the day it launched, the game’s新增用户 (new users added) exceeded 5 million; total new users added exceeded 30 million. Over the past two months, for most of the time it topped the iOS free chart, and DAU (daily active users) remained stable at around 3 million.

邹涛 disclosed that the company has planned a series of versions through summer for 《鹅鸭杀》. “We hope to move through stages one by one, continuously and steadily pushing this game’s (user base) upward.”

《鹅鸭杀》 was first released in 2021. But in 2023, due to Blizzard games suddenly exiting China, it was fueled by Chinese Blizzard game streamers, and at one point its peak concurrent players exceeded 700k.

《鹅鸭杀》 is a social deduction game with gameplay similar to Werewolf. However, compared with similar games, it has a number of innovations. First, 《鹅鸭杀》 adopts cute, adorable animal characters, giving players a fresh feeling from the start. Second, the game includes more than 40 roles, and each role has its own attributes. It also adds neutral characters such as the sleepy bird and the pelican, so every player has something to do, increasing variety in gameplay. There are also many mischievous setups—for example, the pelican can eat other players, and the eaten players can still emit voices from inside the pelican’s belly, and players have even held concerts inside the pelican’s belly.

At that time, the large influx of players suddenly pouring into 《鹅鸭杀》 mainly came from within China. On Twitch, the main overseas game streaming platform, even during the game’s hottest period, the number of viewers was only a few thousand. The sudden influx of Chinese players also caused 《鹅鸭杀》 servers to crash multiple times.

But over time, 《鹅鸭杀》’s heat on Steam was far from what it used to be. As of April 2, its peak concurrent players in a 24-hour period were over 10k.

Like most breakout hit buyout PC games in China, 《鹅鸭杀》 had a fire-starting beginning, but it did not have the long-lasting vitality of popular Chinese mobile games. After it was operated by a Chinese team, can it further unlock the game’s potential and reach more players? That remains to be tested by the market.

For the future operations of 《鹅鸭杀》, 邹涛 said that at present DAU is the top priority, with the focus on keeping versions stable and improving service quality, while revenue and commercialization are not the重点 (focus).

“Based on retention player data, we are confident that through version iterations, we can make this game’s DAU higher. According to the industry performance of games of this type, in the future there will still be a lot of room for growth in this game’s monetization rate.” 邹涛 said, the company plans to take 《鹅鸭杀》 overseas, and there are many ideas for derivative IP for this game. “But the top priority right now is to operate stably and strive to set a new record for player numbers.”

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