In recent weeks, the surge of interest in technology assets, particularly within the context of AI applications, has become undeniable. The market has experienced significant momentum, driven primarily by advancements in DeepSeek technology, which has caught the capital market's attention and sparked a wave of investment activity. Since the start of the year, sectors heavily influenced by DeepSeek have shown strong price increases, illustrating the growing enthusiasm for tech investments in the current landscape of the A-share market. In this rapidly evolving environment, game development within AI technology applications stands out as an intriguing area, captivating the interest of numerous investors due to its inherent appeal and vast growth potential.

DeepSeek’s emergence has stirred significant global attention since its debut, characterized by its cost-effectiveness, high performance, and open-source nature. These attributes have disrupted the longstanding frameworks of the traditional AI market. Observing market trends, it's evident that the rise of DeepSeek has catalyzed the expansion of domestic computing chips and relevant technological applications, challenging the previous dominance of expansive foreign models within the high-end market segment. As a result, stocks associated with DeepSeek have collectively jumped, and related ETFs have attracted substantial capital inflow. The advent of DeepSeek is not merely an isolated incident but rather a pivotal trend that could accelerate the application of AI technologies across various sectors and redefine the valuation of tech assets.

Bringing about a paradigm shift akin to a seismic event, DeepSeek has ignited an invigorating climate within the investment market. As enthusiasm surrounding DeepSeek intensifies, the interconnected upstream and downstream industry chains have received a beneficial boost. On the upstream end, companies involved in semiconductor materials and chip manufacturing equipment stand to gain significantly; in the middle chain, AI platforms and service providers are experiencing faster development cycles. Downstream, developers focused on AI applications and smart hardware are witnessing fresh opportunities emerging from this investment frenzy. Upstream companies provide crucial materials and equipment for AI chip production, while mid-chain players take advantage of DeepSeek's open-source models to expedite their operations. Downstream entities leverage AI in diverse fields, reinforcing the technology's accessibility and evolutionary progress.

The gaming sector, as a vital downstream application of AI technology, has potentially opened the floodgates for fruitful developments. The sophisticated generative capabilities of DeepSeek allow for rapid creation of virtual characters, environments, and narratives, which provides game developers with robust tools and support. A notable example can be seen in MiHoYo’s production of “Project Star,” which integrates AINPC and dynamic narrative technology, significantly enhancing development efficiency. Such technologies enable the creation of more complex, intelligent game scenarios and character behaviors, exemplified by Giant Network's implementation of AI-infused narrative generators in their title "Space Kill," enriching gameplay possibilities. To optimize game testing processes, established tech giants like Tencent and ByteDance are applying self-developed large models to improve testing and operations, yielding enhanced efficiency and accuracy.

As AI technologies permeate diverse sectors, consumer interest surrounding AI products continues to grow, notably within the gaming industry, which benefits from heightened attention and market expansion opportunities for new game launches. Moreover, the successful application of AI technology in gaming creates a template for convergence between gaming and other industries, such as facilitating the development of VR/AR games and stimulating cooperation between gaming, film, tourism, and more.

Looking ahead, the new wave of AI trends ignited by DeepSeek appears to be in full swing, suggesting that the structural rally within tech stocks is far from over. With DeepSeek’s rising popularity, AI applications are likely to witness explosive growth, particularly within the gaming sector, which is currently poised for a vigorous recovery in the wake of recent market activity.

The convergence of AI and gaming signifies a transformative leap in productivity and innovation. The substantial acceleration of AI technologies, propelled by DeepSeek and similar large models, is infiltrating the gaming industry at an unprecedented pace, marking it as a cutting-edge frontier for AI applications. Leading gaming enterprises such as Century Huatong, Giant Network, and Kunlun Wanwei have escalated their investments in AI, recognizing its pivotal role in enhancing innovation and growth within the industry. AI has now been seamlessly integrated into every facet of game development, publishing, and operations. From functional games to cloud gaming, VR experiences to prospective AI-driven games, AI stands as the core driving force empowering continuous advancements across the gaming landscape.

As AI technology makes strides, significant technological revolutions arise across the entire gaming industry chain: upstream developers of game engines and tools like Unity and Unreal Engine are enhancing efficiency through AI feature integration; midstream game developers and publishers, such as Tencent and NetEase, are using AI to refine user experiences and reduce operational costs; and esports and streaming industries downstream are rejuvenated by the introduction of AI technologies. In addition to enhancing traditional models, AI introduces novel business approaches, including personalized recommendations and interactive virtual character experiences, further extending the market horizons of the gaming industry.

As advancements in AI evolve, the future of the gaming sector brims with boundless prospects. Specifically, AI-driven virtual characters can engage with players with heightened natural interaction levels, subsequently enriching immersion in gaming experiences. Moreover, AI can be utilized for creating intelligent NPCs (non-player characters), rendering their behaviors more authentic. The application of these technologies not only magnifies the enjoyment and interactivity of games but also generates new areas of growth for the gaming industry.

Significantly positive indicators are emerging, suggesting that the gaming sector might be poised for a robust comeback. On February 21, the China Audio-Video and Digital Publishing Association’s game committee released a report detailing the gaming industry’s performance for January 2025. The pre-holiday surge in activity buoyed many product launches, stimulating growth in user payments alongside increased online engagement across various platforms—mobile, client, and console gaming alike. The data reveals that the revenue for China's gaming market reached 31.077 billion yuan in January 2025, marking a 7.54% month-on-month increase and a staggering 27.65% increase year-on-year. Meanwhile, sales revenue for domestically developed games in overseas markets stood at approximately 1.675 billion US dollars, reflecting a 2.72% month-on-month rise and a 28.65% year-on-year increment. Zheshang Securities suggests that the gaming sector's fundamentals remain robust, projecting that the number of game launches in 2025 may reach a five-year high. Even without factoring in AI influences, the gaming market in 2025 appears poised for a banner year.

On the same day, the National Press and Publication Administration announced the approval of game licenses for 110 domestic titles and three imported titles, in addition to modifications to six existing licenses. Since the beginning of 2024, domestic online game licenses have consistently been issued each month. A total of 1,306 domestic game licenses were distributed throughout 2024, with December alone accounting for 122 of these—marking the highest number of licenses issued in a single batch that year. In terms of imported games, there were seven license issuance events for a total of 110 games throughout 2024, indicating an increase in both frequency and total numbers compared to 2023. This trend of stable license issuance appears set to continue into 2025.

Furthermore, numerous gaming companies are actively positioning themselves within the “AI + gaming” landscape, striving to seize this emerging opportunity and propel the industry into a new phase of growth. For instance, ShengTian Network has integrated DeepSeek into their mini-game, "Word Bomb." Meanwhile, Giant Network is deepening collaborations with Alibaba Cloud, focusing on the applications of AI in gaming contexts and the establishment of a computational ecosystem that enhances the integration of AI technologies with business operations. Sanqi Interactive Entertainment is also enthusiastically embedding AI throughout product planning, content creation, distribution, and asset management stages. Dongwu Securities indicates that an “AI-powered” mini-game, “Shawarma Legend,” has already experienced an explosive launch within the domestic industry, prompting major players to deploy self-developed large models to bolster their research and development efforts.

According to data from Gamma, over 99% of respondents in the gaming sector reported that their respective companies or departments have adopted AI technologies and tools. Approximately 80% of surveyed individuals indicated that they experienced enhanced project efficiency due to AI, with nearly 10% claiming efficiency improvements of over 50%. Currently, the most widespread application of AI within gaming involves supporting content production, with about 70% of respondents noting its use in augmenting the freedom of NPC actions, narrative developments, art, music, and programming. Market.us estimates that the global generative AI market in gaming will reach around $1.43 billion by 2024, anticipating a substantial increase to $11.11 billion by 2033, with a remarkable compound annual growth rate of 25.6%.