Financial Association News, September 12th (Reporter Cui Ming) The "Double Swords" IP, which has influenced several generations of gamers, is about to change hands. China Mobile Games and Entertainment (00302.HK) acquired the rights to "The Legend of Sword and Fairy" outside of mainland China, indicating that the company has completed the consolidation of the global rights to this IP.

Financial Association News has learned from China Mobile Games and Entertainment that "The Legend of Sword World" will soon undergo its fourth testing on October 10th, and it will also be the final test. The official launch will be fully promoted within the year. Currently, the game has nearly 5 million reservations, and efforts will be made to break through 10 million before the launch. The gross margin of the game on the PC side has the potential to reach nearly 70%.

"The Legend of Sword World" is undoubtedly one of the most anticipated games in China Mobile Games and Entertainment's product lineup. This game is independently developed by M-TEN Studio, a subsidiary of China Mobile Games and Entertainment, and has been polished for over 3 years. It obtained the dual-end version number for the PC and mobile ends in June last year. Industry insiders believe that the launch of "The Legend of Sword World" will validate the company's commercialization model for IP series products, and the heavyweight IP game is expected to boost performance.

The 'Double Swords' IP under Da Yu Information refers to the 1990 game 'Xuan-Yuan Sword' and the 1995 release of 'The Legend of Sword and Fairy'. These two games have achieved tremendous success and have been adapted into film and television dramas, continuously expanding their influence.

The connection between China Mobile Games and Entertainment and 'The Legend of Sword and Fairy' can be traced back to 2018, when China Mobile Games acquired a 51% stake in Beijing Softstar, a subsidiary of Da Yu Information, for 0.213 billion RMB. In 2021, it acquired the remaining shares of Beijing Softstar for 0.642 billion Hong Kong dollars, thereby obtaining ownership of the 'The Legend of Sword and Fairy' IP in mainland China.

Da Yu Information announced last night, the global IP rights to 'The Legend of Sword and Fairy' excluding mainland China are held by a China Mobile Games and Entertainment subsidiary with full ownership, with a transaction amount of 18.3 million RMB and 38 million newly issued ordinary shares of China Mobile Games and Entertainment, with a total price of nearly 0.2 billion New Taiwan dollars.

The decision to sell had already shown signs. On May 14th this year, Da Yu Information announced that the board of directors had resolved to propose the sale of the IP rights to 'The Legend of Sword and Fairy' and 'Xuan-Yuan Sword', and the company would authorize the chairman to carry out related planning and negotiations. Subsequently, Da Yu Information's chairman Tu Junguang responded to doubts on social media, stating that he took over Da Yu Information on January 14, 2014, at which time, 'Xuan-Yuan Sword 3', 'The Legend of Sword 4', and others were already 20 years ago. Therefore, he did not experience the so-called 'Double Swords' glory, nor did he experience the hot discussions and good reviews at the time of the 'Double Swords' release.

CMGE stated in the announcement that it will fully acquire the global intellectual property and interests of "Xianjian Qixia Zhuan", which will consolidate the ecological competitiveness of the company's IP games and ensure the long-term stable implementation of the company's IP game strategy. CMGE will increase investment in all aspects to create more high-quality content and interactive experiences by combining entertainment forms preferred by young users.

Possibly affected by the above news, as of the time of publication, the stock price of CMGE has risen by more than 6%.

According to the financial report, CMGE achieved revenue of 1.233 billion yuan in the first half of this year, a year-on-year decrease of 19.68%; the adjusted net loss was 0.208 billion yuan.