This weekend, Giant Network, riding high on the success of Supernatural Action Team, released its 2025 performance report and Q1 2026 earnings forecast. In 2025, Giant Network's revenue hit 5.047 billion RMB, a staggering 72.69% year-on-year increase. Net profit attributable to shareholders reached 1.669 billion RMB, up 17.14%, while non-GAAP net profit was approximately 2.058 billion RMB, a 26.83% increase. The outlook for Q1 2026 is even more dramatic, with projected net profit between 1 and 1.2 billion RMB, representing a year-on-year growth of 187.47% to 244.96%. This makes Giant Network the latest A-share listed gaming company, following Century Huatong, to report growth guidance exceeding 100%, marking a strong start to 2026.
The disparity between the 72.69% revenue growth and the 17.14% net profit growth in 2025 is explained by Giant Network as follows: 'The company's indirectly held subsidiary, Playtika, recorded a $380 million contingent consideration from a 2024 acquisition as an expense in the current year, indirectly causing a significant year-on-year decline in Giant Network's investment income, thereby dragging down profit growth.' Excluding this impact, Playtika's adjusted EBITDA for 2025 was $753 million, flat year-on-year.
In GamePea's view, Playtika—a global giant in casual and card games with annual revenue of 18.8 billion RMB—has long been a volatile variable in Giant Network's performance. Just last week, the Shi Yuzhu family and Giant Network appeared to decide to restructure their decade-long capital relationship with Playtika. On April 6, Playtika announced that its board had formed a special committee of independent directors to conduct a comprehensive review and evaluation of strategic options for all its businesses. The committee is assessing various opportunities and plans to unlock and enhance shareholder value, and has hired Morgan Stanley as financial advisor. In plain terms, this is Playtika's second attempt since its IPO to find a strategic investor or even a buyer. Following the announcement, Playtika's stock surged 16.79% on April 6.
In 2016, Giant Network, alongside investors like Yunfeng Capital, acquired Playtika from Caesars Interactive Entertainment for $4.4 billion. The plan was for Giant Network to fully acquire Playtika and list it on the A-share market. Little did anyone know this would kick off a decade-long capital gamble. Later in 2016, Giant Network announced a plan to acquire Playtika for 30.5 billion RMB, using a mix of new shares and cash. Unfortunately, despite multiple revisions, the plan never received regulatory approval. Meanwhile, disputes arose among the original consortium investors who were unable to exit. Eventually, Shi Yuzhu and Giant Network, as the lead investors, bought out some investors using a mix of cash and debt, allowing them to cash out. In 2021, Playtika listed on the Nasdaq. By 2026, Giant Network and the Shi Yuzhu family still hold a majority stake in Playtika's parent company, Alpha Frontier Limited.
It's worth noting that through pre-IPO dividends of approximately $2.8 billion in 2018 and 2019 (partly funded by Playtika bank loans) and the sale of existing shares during the IPO, the original investors have recovered over $4 billion in cash on paper, excluding taxes. However, the decade-long capital commitment has also generated significant interest expenses. Now, after ten years, this 30 billion RMB gamble is reaching a critical juncture. Whether Playtika's latest effort to find a strategic investor will succeed, allowing the Shi Yuzhu family and Giant Network to achieve a 'full victory exit' and enabling Giant Network to 'travel light' toward a 100 billion RMB market cap, has become a new topic for A-share investors.
Why is a Top 20 Global Mobile Game Developer Mired in a Stock Price Slump?
After its U.S. listing, Playtika had a shining moment—its market cap reached $12 billion at its 2021 IPO. This validated Giant Network's belief in the company's value, at least at the time. If the original acquisition had succeeded, Giant Network's market cap might have jumped significantly, hitting the 100 billion RMB target much earlier. But there are no 'ifs.' After its IPO, Playtika entered a strange 'quantum state' where its stock price kept falling while its performance remained stable. Today, its market cap has dwindled to just $1.2 billion. This explains why Playtika's board is again seeking strategic transactions: the company's current value is below shareholder expectations. According to Stockanalysis.com, Playtika's enterprise value is estimated between $2.7 billion and $2.9 billion. If Playtika can be sold at such a premium, Giant Network and the Shi Yuzhu family could finally 'lock in their gains.'
According to its 2025 financial report, Playtika's revenue reached $2.755 billion, nearly 20 billion RMB. How can a mobile game company with nearly 20 billion RMB in annual revenue have a market cap of only $1.2 billion? This puzzles both shareholders and investors. A 20 billion RMB revenue stream is not small by global standards; it makes Playtika a leading mobile game publisher. Based on 2025 iOS and Google Play revenue, Playtika ranks 17th globally, ahead of major Chinese companies like Papergames and 37 Interactive Entertainment, and 10th among non-Chinese companies. However, this ranking is likely understated, as Playtika has disclosed that 34% of its revenue comes from third-party payments. Including that, its global ranking would be even higher.
As a major shareholder, Shi Yuzhu and Giant Network, along with other investors, certainly hope to realize the company's value. But everyone is baffled by the disconnect between high revenue and a depressed stock price. This reality is forcing Playtika to seek a second strategic transaction. If successful, whether through a full acquisition or partial stake sale, it could theoretically allow Giant Network and the Shi Yuzhu family to cash out.
One key reason for Playtika's low stock price is its high operating expenses and financial costs. Despite high revenue, its long-term revenue growth and actual profit margins are low. As of the end of 2025, Playtika's debt was nearly $2.4 billion (partly due to the pre-IPO dividends funded by bank loans). In 2025, it paid $140 million in annual loan interest, while repaying only $19 million in principal. This means the company operates under a long-term high debt burden. Additionally, Playtika's growth strategy relies heavily on continuous acquisitions. Over the past 14 years, it has acquired numerous studios, including the $1.4 billion purchase of casual game developer SuperPlay in 2024.
Playtika is less a traditional developer and publisher and more a capital-driven growth company. Its logic is to acquire and nurture potential hits in the casual market, betting on its flagship products for long-term high growth. Unfortunately, its legacy card game business has seen significant declines for several consecutive quarters. In 2025, slot game revenue fell 35.7%. This decline in legacy business, offset by growth in new casual titles, reflects the ongoing fragmentation of the global casual gaming market. GamePea believes Playtika is both a major player in the global casual market and a company constantly adjusting to and bearing the pressure of market changes. Everyone wants to know: is the casual game business really viable? Playtika's recent history offers both hope and cautionary lessons.
What is Playtika's Business Really Made Of?
Playtika's financial reports read like a dramatic capital history of the gaming industry over the past decade, offering a comprehensive lesson on overseas casual gaming. GamePea recommends reading Playtika's 10-K filing with the SEC to understand the current state of the overseas casual market. In a nutshell: high revenue, poor profits. Excluding historical debts and capital expenditures, the company's 2025 EBITDA margin was a healthy 27.3%. Yet, Playtika still reported a net loss of $200 million last year, which is puzzling.
Looking at the numbers, Playtika's 2025 global performance had some bright spots. First, revenue was $2.755 billion, up 8.08% year-on-year. Second, the $1.4 billion acquisition of SuperPlay boosted the average daily active users (DAU) of its games by about 4.9% in 2025. So why are the financial results still lackluster? On one hand, the historical debt burden is heavy. On the other, the company's expansion model relies heavily on acquisitions, leading to continuous debt servicing, accumulated goodwill, and ongoing earn-out agreements with investors. This has made the five years since its IPO a difficult period.
Despite these challenges, Playtika has achieved feats that impress peers. One is its direct-to-consumer (D2C) channel. As of December 31, 2025, Playtika had pushed third-party payment revenue to 34% of total revenue—a virtually unprecedented figure in the overseas gaming industry. This makes it the most aggressive company in bypassing iOS and Google Play commissions, a strategy worth emulating. This isn't about setting up a PC store; it's about redirecting mobile players to third-party payment systems, and the ratio is astonishing. It suggests that players of its legacy slot and card games prefer using third-party payments. While revenue hasn't skyrocketed, Playtika has improved the quality of its revenue. Even the fees for third-party payment platforms are controlled at 3%-4%, slightly below the industry average, setting a benchmark.
Second, the $1.4 billion acquisition of SuperPlay in 2024 is paying off. Under the agreement, Playtika had to pay $700 million upfront, with the rest in installments. It was a huge bet, but it seems to have worked. According to third-party data, Disney Solitaire, launched in April 2025, generated $260 million in monthly revenue on iOS and Google Play, making it one of the fastest-growing and most stable casual games globally in 2025. Considering the high ratio of third-party payments, actual revenue is even higher. Clearly, Playtika's gamble paid off. However, Disney Solitaire is still in its promotional phase and not yet generating significant profits; rapid growth is the priority. During this period of heavy user acquisition spending, its controllable EBITDA margin is 5%-10%, lower than its card games. The financial report also notes that as revenue shifts further toward casual games, EBITDA and net profit margins may continue to decline. This reflects the disconnect between revenue and profit realization in the casual gaming sector.
On the downside, excluding SuperPlay, the average DAU for all other Playtika games declined, expected to fall about 19.7% in 2025. While the new hit is booming, the legacy pillars are crumbling: slot and card game revenue dropped 35.7% in 2025. As Chinese companies rush into the casual gaming space, Playtika's experience validates the uncertainty of long-term commitment to the sector. The market includes both high-margin card games and lower-margin casual games, and their interplay creates financial volatility. If domestic peers truly want to make casual games a long-term business, Playtika offers a realistic lesson: whether through acquisition or internal development, betting on new games is essential. Between 2022 and 2023, Playtika paused new game development due to high user acquisition costs. The result proved that evergreen casual titles are defensive, not offensive. Playtika's experience shows that while long-term operation of casual games is good, you can never stop betting on the next hit.
Over 60% of Revenue from the U.S., Casual Giant Favors Incentivized Ads
GamePea found many interesting figures in Playtika's financial report that answer common questions. First, which market sustains overseas casual games? Playtika's report is clear: 63.2% of revenue comes from U.S. users, and 93.2% from users in the U.S., Canada, Europe, and Australia. Clearly, the casual gaming market is more concentrated than many think, with the U.S. being the primary battleground.
Second, how much does a casual gaming giant spend on user acquisition? With $2.755 billion in revenue last year, advertising expenses alone were $760 million, meaning monthly marketing costs exceed 400 million RMB. That's a significant user acquisition spender. However, marketing expenses as a percentage of total revenue are not as extreme as one might think, accounting for less than 30% of revenue. Of course, how to spend that ad budget requires skill. The report notes that Playtika places the highest importance on incentivized ads. By 2024, incentivized marketing is expected to account for over 50% of user acquisition activities for some Playtika games. This 'incentivized marketing' typically involves third-party marketing companies promoting mobile games and offering players rewards like gift cards, cash, or in-app currency for completing specific actions, such as downloading a game, completing a survey, or reaching a milestone. In simple terms, it's the 'red envelope' strategy popular in Chinese mini-games, but Playtika has turned it into a major user acquisition expense that effectively drives growth in card games—an interesting approach.
Additionally, Playtika disclosed that its average daily paying user conversion rate is 4.4%. The average revenue per daily active user (ARPDAU) is $0.89 (about 6.08 RMB), with most revenue coming from these paying users. The report also revealed that Playtika has 3,175 employees, about 74% of whom are in R&D. It operates in Austria, Finland, Georgia, Germany, India, Israel, Netherlands, Poland, Romania, Spain, Switzerland, Ukraine, the UK, and the U.S. Notably, it has a large R&D center in Ukraine and about 1,000 professionals in Israel—both regions affected by conflict. Playtika is arguably the only game company globally that has been 'hit' by both conflicts. Following the Hamas attack on Israel in October 2023, dozens of Playtika employees were called up for military service. The report doesn't mention the impact of the U.S.-Israel-Iran conflict, but it's likely Playtika has faced further disruptions, with an unknown number of employees called up again.
Finally, of Playtika's nearly $2.4 billion in debt, $1.8 billion carries an annual interest rate of 6.78%, and $600 million carries a rate of 4.2%. The total interest paid was $140 million. Playtika rose through capital, but is now constrained by it. These debts mature between 2027 and 2029, making debt repayment a key issue going forward. Why is Playtika so heavily indebted? Primarily to resolve the massive debt left from the original Chinese consortium's acquisition, which was largely taken on by Playtika. Additionally, part of the current debt stems from major shareholder Shi Yuzhu's own capital needs, with some equity being pledged for loans.
This transaction has now lasted a full decade. Regardless of Playtika's true operational quality, it's time for this capital saga to conclude. For the shareholders, it's also time for the Shi Yuzhu family and Giant Network to exit.