In May 2026, Snail Inc. delivered first-quarter results that surpassed market expectations: revenue reached $27.3 million, a 35.7% year-over-year increase; net profit was $2.1 million, marking a turnaround from a loss in the prior-year period; total unit sales climbed 42.6% to 2.2 million copies; bookings revenue grew 21.1% to $26.9 million; and cash reserves increased by approximately 66%, from $8.6 million to $14.3 million.
Behind these figures lie two significant shifts.
The first shift stems from the continued cultivation of the ARK IP. *ARK: Survival Ascended* sold 1.4 million copies in the quarter, with 127,000 daily active users. *ARK: Survival Evolved* sold 573,000 copies, with 117,000 daily active users. *ARK Mobile* surpassed 11.9 million cumulative downloads, with over 141,000 daily active users. An IP operating for many years continues to deliver value across PC, console, and mobile platforms.
The second shift comes from the advancement of a diversified narrative. Three self-developed AAA titles—*For The Stars*, *Nine Yin Manual: Cultivation*, and *Nine Yin Manual: Wuxia*—have entered the final stages of development. *Bellwright*, under the independent publishing label Wandering Wizard, has surpassed one million units sold. The company plans to launch approximately 11 new content pieces throughout 2026.
"Our focus is on building a broader portfolio across different genres, platforms, and development models to support long-term business growth," summarized Snail Inc.'s management during the earnings call.
This report marks not just a set of results but a confirmation of strategic direction, moving from reliance on a single IP to an ecosystem layout across multiple categories and platforms. In an exclusive interview, we spoke with Snail Inc.'s CEO, Shi Hai, and CFO, Heidy, to delve into how the company is forging its own long-term growth path between "ARK IP expansion" and "diversified narrative."
The following is an edited transcript of the conversation with CEO Shi Hai and CFO Heidy:
1. High-Performance Growth Was Within Expectations
Q: Congratulations on the Q1 results—revenue of $27.3 million, nearly double market expectations, and a return to profitability. Which number was most surprising to the company internally?
CFO Heidy: Frankly, management was not surprised by these results. We have maintained very optimistic expectations for our entire product line and promotional activities. Since the start of 2026, we have conducted numerous promotions and launched several new games, all as planned.
The market's surprise likely stems from our regular business volume typically being around $18 to $20 million. When a significant new game launches or a major promotion occurs, a substantial growth peak is easily achieved, which was the case in Q1.
From an internal perspective, both management and the finance team are more focused on the trend—the company is steadily moving in a positive direction, achieving a turnaround to profitability. In Q2, we will have more new games and DLCs rolling out.
Q: The core driver for turning a net loss into a profit—was it the better-than-expected revenue growth or structural optimization on the cost side?
CFO Heidy: The core driver came from the revenue side. Our Q1 revenue grew 35.7% year-over-year, while costs were well-controlled without significant increases. With rising revenue and stable costs, the return to profitability followed naturally.
2. Aiming to Lead in Niche Segments
Q: I noticed you renegotiated the ARK licensing agreement, saving $6 million annually. When did these negotiations start? Was it a proactive approach or coinciding with a renewal window?
CFO Heidy: We did not wait until the contract was nearly expired. The company has maintained an excellent cooperative relationship with the IP holder, with ongoing business communication. Starting last year, based on business development and game product growth, we proactively initiated negotiations, focusing on the rationality of cost allocation and overall terms.
Q: The company currently has three AAA self-developed products—*For The Stars*, *Nine Yin Manual: Cultivation*, and *Nine Yin Manual: Wuxia*. How does the company plan to prioritize the allocation of this freed-up cash flow?
CEO Shi Hai: First, it's important to note that our current in-development products have all had development cycles exceeding two years, with relatively stable monthly R&D investments. We will not significantly increase costs just because of this cash flow. From a financial perspective, after this $6 million is freed up, it should theoretically translate directly into profit. We currently plan to wait until these three major IP products are officially launched before considering new investments. Until then, the freed-up cash flow will accumulate as profit. Of course, we are also investing in areas like short-form video content, but the budget has not increased compared to last year.
Q: What are the current development stages of these three products? Which one is most likely to be released first?
CEO Shi Hai: The three products are slated to launch around the same time. *For The Stars* has had a development cycle of nearly three and a half to four years. Space-themed products are highly challenging; in the past, many ideas were unfeasible due to hardware and engine limitations. Now, with updated commercial engines, hardware upgrades, and advancements in AI technology, the development bottlenecks have largely been overcome, which is why we decided to pursue this product.
*For The Stars* is expected to enter testing this year. In terms of development model, we have adopted a global division of labor: the core U.S. team handles design, a Polish studio manages 3D modeling and effects, and the Chinese team handles programming, feature implementation, and scaled production. This approach controls quality, optimizes costs, and, more importantly, enhances efficiency.
Q: If these three products launch sequentially in the future, how is the company's revenue structure expected to change? To what level might the ARK IP's revenue contribution decline from its current share?
CEO Shi Hai: The market size for *For The Stars* is approximately $1 billion. If successful, it could capture that within two to three years; if performance is average, it might take seven to ten years. For products of similar scale in the industry, R&D costs commonly exceed $100 million, whereas our investment is controlled around $40 million—this cost has been fully absorbed over the past few years and will not create future amortization pressure on profits. After launch, beyond some limited advertising spend, the vast majority of revenue will translate directly into profit.
Regarding *Nine Yin Manual: Wuxia*: the current annual global market size for the wuxia genre is about $3 billion, with roughly $300 to $500 million available for single-player or hardcore experience products. Given the influence of the Nine Yin Manual IP and our product quality, I believe achieving $50 to $60 million in the first year is feasible. Ideally, this product could match ARK's revenue scale in its launch year, potentially reducing ARK's revenue contribution to 50%-60%. If performance is stronger, it might even surpass ARK; the share would decline further after the second year, ultimately forming a balanced multi-IP structure.
As for the cultivation genre, there is currently no game that has truly realized a "cultivation world"—even film and TV lack a clear standard. We hope to establish the standard for the cultivation genre, much like how *Nine Yin Manual* redefined wuxia games. The audience for cultivation is vast, especially among younger users. Our development model remains: U.S. team for core design, Chinese team for support, ensuring Western players can also understand the game's language. In terms of market size, the cultivation direction has a potential scale of around $1 billion; how many years it takes to capture depends on post-launch performance.
Our R&D investments have been fully expensed in prior years. After product launch, there are no external profit-sharing arrangements; beyond limited advertising spend, the vast majority of revenue will translate directly into profit. This will have a clear positive impact on the company's profit structure and long-term value.
3. The ARK IP Remains Highly Vital
Q: Shifting focus back to the ARK IP. Q1 operational data was quite robust—nearly 2 million combined PC and console copies sold, and over 140,000 daily active users on mobile. How does ARK, a product operating for many years, consistently maintain user engagement? Is it through frequent DLC updates or other operational strategies?
CFO Heidy: Since its 2015 launch, ARK has maintained high user engagement. Our strategy has two main components: First, continuously releasing new content. We basically release a new DLC every 1-2 years, taking players to new maps and gameplay scenarios. In October 2023, we launched the ASA version (version 1.5), a major update. Second, we have a very strong and stable community ecosystem. Accumulated since 2015, the community has become a crucial foundation for sustained user retention. Players don't feel like they're playing the same game; there's constant novelty—different places to go, different content to play. This is why we can maintain long-term user stickiness.
CEO Shi Hai: The product itself is, of course, key. But I'd like to add: the U.S. team knows how to manage a brand long-term, building lasting recognition like a luxury brand. ARK's longevity is due not only to content updates but also to the long-term IP operation strategy behind it. We respect the U.S. team's professional judgment, intervening minimally. The results show they indeed understand IP management better.
Q: When the company greenlights a new DLC or derivative work internally, are there clear return-on-investment criteria? Such as expected sales or profit margin thresholds?
CEO Shi Hai: For the ARK project, our management approach differs from that of domestic teams. We delegate more; if the team believes a direction is right, they proceed. They provide data forecasts, which are generally met upon execution. So, ARK is a project we worry less about; financial forecasts rarely deviate. This year, our expectation for ARK is 20% growth, and based on current trends, it will certainly exceed that target.
CFO Heidy: Let me add. Each DLC launch is planned. On one hand, development itself requires a cycle; on the other, we make judgments based on player preferences and gameplay trends in the market. More importantly, with nearly a decade of operational history, we clearly see significant sales increases after each new DLC release. We have a DLC scheduled for late December this year, and next year's plan is largely set. Of course, specific details may be fine-tuned based on market feedback, but the overall cadence is planned in advance.
4. Diversified Narrative is Proving Effective
Q: Moving beyond the ARK IP to the broader product portfolio. The company's independent publishing label, Wandering Wizard, saw its product *Bellwright* surpass one million units sold. What role do mid-to-small-scale products like *Bellwright* play in the company's business system? Are they unexpected increments, or are several such products planned annually as supplementary revenue?
CEO Shi Hai: *Bellwright* belongs to a relatively hardcore genre with a niche but highly loyal audience. As long as the product quality is solid, players will buy it. The product is performing well currently. After one year on the market, it will launch on console platforms in June—such games are still relatively scarce on consoles, offering a first-mover advantage. Under normal circumstances, annual sales across all platforms should be between 1.5 and 2 million copies.
CFO Heidy: As of Q1, *Bellwright* had surpassed 1 million copies sold on PC (Steam) alone. After platform fees, its revenue contribution is quite substantial. The June launches on Xbox and PlayStation will further open incremental space; our expectations for this game remain high.
CEO Shi Hai: Trend-wise, the product has been continuously optimized, with content and bug fixes progressing, leading to increasingly better data. From hundreds of thousands of copies annually in the past, it could exceed 1 million copies this year, potentially reaching 1.5 million or higher with the console launch. Moreover, this product has a long lifecycle, sustainable for about a decade. The overall IP scale is estimated at over $100 million, to be realized gradually over six to seven years. Future market space remains significant.
Q: From a strategic perspective, what is the core value of the Wandering Wizard publishing label? Is it direct revenue contribution or helping the company stay attuned to market trends and emerging genres?
CEO Shi Hai: Both aspects. Our self-developed products are larger in scale and tend to be hardcore. But small games and indie games often produce hits; we need Wandering Wizard to understand this market—knowing what wins, what loses, staying closely connected to the market. Simultaneously, new product releases help the brand acquire more resources.
More importantly, we are constantly seeking truly valuable producers. Through cooperative publishing, we can access numerous emerging teams. If we discover genuinely talented producers, we will bring them into the company, offering the best compensation and profit-sharing. With over 20 years in gaming, we realize: excellent producers cannot be mass-produced through training; they can only be discovered.
5. Building the Next "ARK"
Q: At this point in time, what do you see as the greatest uncertainty facing the company? Is it the controllability of R&D progress or changes in the external competitive landscape?
CEO Shi Hai: In the short term, the greatest uncertainty indeed comes from project launch timing. Based on my years of industry experience, a product must be truly ready before launch to succeed. Rushing to launch two or three months early significantly increases the risk of failure. Of course, we are a mature company with over 20 years of operation; situations like failing to deliver or indefinite delays won't occur.
Another risk is post-launch performance falling short of expectations. But as I mentioned earlier, R&D costs have been fully absorbed in prior years. After launch, regardless of performance, revenue translates to profit. Moreover, for large-scale products handled by mature teams with clear market paths, risks are controllable. Frankly, what the company most needs is to create the next "ARK."
Q: If you were to recommend one leading indicator most worthy of investors' attention—not revenue or net profit, but a single data point that could reflect the company's health in advance—what would it be?
CEO Shi Hai: Artificial Intelligence. The gaming industry has reached a bottleneck. Current visual technology—both hardware and software—is essentially at its peak; in terms of gameplay and features, all game types have been largely developed. In this environment, the only thing that can truly change the gaming industry is artificial intelligence; it is the real variable for the next generation of games. In August this year, we will participate in the Ai4 artificial intelligence and robotics expo in Las Vegas, where we will unveil an AI product that has been in development for a year and a half.
Q: Final question. In one sentence, what is the biggest difference you hope investors will see in Snail Inc. three years from now compared to today?
CFO Heidy: A gaming company with a diversified portfolio of IPs.
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