01. Flagship Products Under Pressure

MiHoYo, which pioneered the anime-style gaming market with Genshin Impact, is now encountering a growth bottleneck, with its core competitive advantages becoming less pronounced.

According to SensorTower's 2025 annual rankings, MiHoYo dropped to fifth place in global mobile game publisher revenue, trailing behind Tencent, FunPlus, NetEase, and Lemon Fun. The previous triumvirate of Tencent, NetEase, and MiHoYo in the mobile gaming landscape has begun to unravel.

Meanwhile, MiHoYo's leading position in the anime-style gaming market is being challenged. According to GameDaily, in the 2025 estimated revenue rankings for anime-style games in China, Tencent's Naruto took the top spot with an estimated revenue of 1.475 billion yuan, while MiHoYo's flagship title Genshin Impact ranked second with 1.067 billion yuan.

The expansion of the market and the entry of major players are further constraining MiHoYo's market share. According to GameDaily, among the 72 key games expected in 2026, nearly half are anime-style games, with Tencent, NetEase, HyperGryph, and Perfect World all launching new titles that cover sub-genres such as anime-style card games and anime-style shooters.

StockStar points out that MiHoYo's three flagship games—Genshin Impact, Honkai: Star Rail, and Zenless Zone Zero—are all facing pressure.

Since 2025, the company has attempted to boost revenue growth through version updates and the introduction of new characters. Data from DianDian reveals that on the day the new character Skirk was released in June, Genshin Impact achieved its highest daily revenue of the year. Honkai: Star Rail experienced three revenue peaks in April, July, and November, driven by the introduction of popular characters such as Xiadie, Bai E, and Xilian.

However, relying on version updates and new characters has been insufficient to reverse the overall decline in annual revenue for MiHoYo's flagship games. Data from Qimai shows that in 2025, the estimated iOS revenue in China for Genshin Impact and Honkai: Star Rail was $94.0146 million and $87.426 million, respectively, representing year-on-year declines of 37% and 43%.

Notably, research firm Gameage highlighted that the user overlap between Honkai: Star Rail and Genshin Impact exceeds 30%. This underscores MiHoYo's current predicament of "cannibalizing its own market": its different games are vying for the same core group of anime-style gamers, leading to internal genre competition.

MiHoYo's Zenless Zone Zero has also underperformed. Zhang Shule, a game industry analyst, noted that as a game launched in July 2024, its initial revenue performance fell short of Genshin Impact and Honkai: Star Rail, and its popularity and revenue declined rapidly less than two months after launch.

Furthermore, Qimai data indicates that in 2025, Zenless Zone Zero generated an estimated iOS revenue of $32.1122 million in China, the lowest among the three games, with a year-on-year decline of approximately 35%.

02. Lukewarm Response to New Game Tests

StockStar observes that amid sluggish revenue growth from existing games, MiHoYo also faces a shortage of new titles.

In November 2025, MiHoYo officially released the first 31-minute gameplay demo of its new project, Varsapura. Developed using Unreal Engine 5 (UE5) and led by producer Cai Haoyu, the game is positioned as an urban open-world action RPG.

However, since its initial reveal, apart from new job postings for AI gameplay designers, MiHoYo has not provided further updates on Varsapura, making its launch timeline a major concern for both the industry and players.

As part of the Honkai IP, Honkai: Yuanling Spirits commenced its "Fate-Binding Test" on September 17, 2025. The initial testing received a lukewarm response, with players citing issues such as simplistic environments, stiff character animations, disjointed gameplay, and fragmented storytelling, failing to meet expectations for a Honkai IP title. Currently, Honkai: Yuanling Spirits has announced a second round of optimizations and launched recruitment for the "Dimensional Exploration Plan," but its specific launch date remains uncertain.

Additionally, MiHoYo's simulation and adventure game Starfall Valley recently entered its second beta test, but many players reported high levels of gameplay repetition and a rapid decline in fun, resulting in a mediocre market reception. Overall, in the absence of new games, the company's current revenue heavily relies on the three established titles: Genshin Impact, Honkai: Star Rail, and Zenless Zone Zero.

StockStar notes that amid technological changes in the gaming industry, MiHoYo is increasing its long-term investment in AI. On May 15, Liu Wei, co-founder of MiHoYo, stated at an AI technology sharing event in Beijing, "The company plans to invest up to 100 billion yuan in AI over the next three years. Even if we don't succeed, it's worth it—like setting off a big firework."

The company's AI capabilities are being integrated into its products. The 4.2 update of Honkai: Star Rail introduced the Pom-Pom AI Assistant, while Varsapura, led by Cai Haoyu, features vehicle exploration gameplay and an AI-driven dynamic event system, seen as an important experiment in merging AI technology with open-world gameplay.

Some analysts argue that MiHoYo's strategic direction in AI remains ambiguous, with the company emphasizing "full-stack self-research" as a means rather than a clearly defined path. Given the current landscape, directly competing with industry giants like OpenAI and ByteDance in the foundational model sector may not be the most prudent choice, as MiHoYo lacks ecological endorsements and an enterprise user base. A more pragmatic approach would be to carve out a "niche within the anime-style sector" in AI—a vertical scene that is currently underestimated or misunderstood by major players.

Additionally, MiHoYo has been active in the investment arena. The company has made over 30 external investments, spanning AI, embodied intelligence, commercial spaceflight, and other fields. In January of this year, its portfolio company MiniMax went public, delivering significant investment returns.

In Zhang Shule's view, while investment gains can boost profits, they are not the core business and do not provide sustainable returns. As a major anime-style game developer, excessive focus on side ventures could undermine its "purity," a critical pitfall in the anime-style gaming sector. (This article was first published by StockStar, Author | Li Ruohan)

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