Hong Kong stocks in focus | Gaming stocks surge broadly; Apple's reduction of App Store commission rate may have demonstration effect, helping domestic developers improve profitability margins

The gaming stocks generally rose. As of the latest report, BlueFocus Interactive (08267) increased by 7.94%, trading at HKD 0.34; Boyaa Interactive (00434) rose by 5.41%, trading at HKD 3.12; Bilibili-W (09626) increased by 3.55%, trading at HKD 210.2; Xindong Company (02400) rose by 3.06%, trading at HKD 74.2; NetEase-W (09999) increased by 1.39%, trading at HKD 185.3; Tencent (00700) rose by 0.36%, trading at HKD 560.5.

On the news front, Goldman Sachs’ latest research report pointed out that Apple announced last week a reduction in the commission rate for the China mainland App Store; Google also announced in early March that the in-app purchase commission rate for Google Play would be reduced from 30% to 20% or lower, and that third-party payment options would be opened, allowing developers to use billing systems outside of Google’s own. Goldman Sachs believes that these two companies lowering their commission rates will reduce channel costs for mobile game developers/publishers, help expand their profits, and save costs to increase R&D investment. This provides longer development cycles for startups and small to medium-sized enterprises, promotes industry growth, and fosters more innovative products.

Goldman Sachs also pointed out that the move by Google Play could pave the way for domestic companies to expand overseas. More importantly, Apple’s move may set a precedent and become an important bargaining chip for game developers to pressure domestic Android channels to implement similar reforms. If domestic Android channels follow Apple’s lead in reducing commissions, there is still room for game publishers/developers to further improve profitability.