On September 21, Perfect World Co.,Ltd. (002624.SZ) announced plans to invest 100 million yuan to acquire a stake in the Shixiang Shangshi (Tianjin) Venture Capital Partnership (Limited Partnership) fund, with the capital sourced from its own funds and primarily targeting cutting-edge technology sectors. This marks the company's fourth move to subscribe to a private equity fund within a single month, bringing its total commitments to approximately 700 million yuan in just 30 days—all while its R&D spending has declined for four consecutive reporting periods.
On August 10, the company's board approved a 500 million yuan investment in the Shenzhen Jizhi Dengyue Erhao Venture Capital Enterprise (Limited Partnership) fund, which has a preliminary total scale of 3.5 billion yuan and focuses on emerging technology. On September 7, it added 50 million yuan to the Tianjin Lisi Xingshen Equity Investment Partnership (Limited Partnership) fund, managed by Hainan Lisi Private Equity Fund Management Co., Ltd., founded by Cao Xi, a former partner at Sequoia Capital China. On September 11, the company put 50.4 million yuan into the Fuzhou Huizhu Venture Capital Partnership (Limited Partnership), also targeting emerging tech.
Combined with the latest disclosure on September 20 regarding the Shixiang Shangshi fund, Perfect World Co.,Ltd. has rapidly positioned itself as a limited partner in four private equity funds within a month, committing roughly 700 million yuan in total—all directed at emerging or cutting-edge technology ventures. On the flip side of this aggressive deployment is a continuous contraction in R&D investment. From 2023 to the first half of 2026, the company's R&D expenses were 2.195 billion yuan, 1.927 billion yuan, 1.625 billion yuan, and 756 million yuan, down 4.16%, 12.19%, 15.70%, and 19.80% year-over-year respectively, marking four straight reporting periods of decline.
The root cause of the shrinking R&D budget is a substantial reduction in the development team. In 2024, the company conducted a comprehensive review of its R&D staff, slashing the headcount from 3,993 at the end of 2023 to 2,575—a 35.51% cut. In response to investor queries on the interactive platform, the company described the changes in R&D personnel and expenses as a "structural optimization based on long-term development," retaining strong teams and concentrating resources on more certain, advantageous projects. However, investor skepticism remains palpable.
One investor bluntly stated on the platform: "The company's annual R&D spending is significantly higher than industry peers, yet there are hardly any technological breakthroughs to show for it... It's hard to explain such massive investment with so little game output." While R&D shrinks, Perfect World Co.,Ltd.'s operating performance is also under strain. In the first half of 2026, the company posted revenue of 2.751 billion yuan, down 25.47% year-over-year, and swung to a net loss attributable to shareholders of 118 million yuan, compared to a profit of 503 million yuan in the same period last year. Non-GAAP net loss stood at 211 million yuan, versus a profit of 318 million yuan a year earlier.
The company attributed the loss to concentrated marketing expenses during the initial launch of new games, combined with a mismatch between current-period cost recognition and deferred revenue from top-ups. Its blockbuster new title "Yihuan," launched at the end of April, has generated over 2 billion yuan in cumulative global revenue as of August 18, with earnings contributions expected to begin flowing from the third quarter onward. Still, market acceptance of this explanation remains uncertain—whether the game's revenue can translate into sustainable profits depends on operational efficiency throughout its lifecycle and the ability to deliver subsequent version updates.
In stark contrast to its struggling operations, Perfect World Co.,Ltd. has accelerated its private equity investments. The Jizhi Dengyue Erhao fund has a preliminary scale of 3.5 billion yuan, with the company's 500 million yuan stake representing 14.29%. For the Shixiang Shangshi fund, which has a 4-year investment period and a 4-year exit period, the company explicitly stated it holds "no seat on the investment decision committee and no veto power over fund investment matters." This positions Perfect World Co.,Ltd. primarily as a financial investor, with no operational control over portfolio companies and little prospect of gaining technology or content synergies directly tied to its core business in the near term.
In its announcements, the company said the fund investments aim to "fully leverage the professional resources and investment management advantages of specialized institutions, uncover quality investment opportunities while ensuring normal operation of the main business, optimize the company's investment structure, and enhance returns on capital." But an unavoidable question arises: when a content company whose core competitiveness lies in game development allocates growing amounts of capital to external private equity funds where it holds no decision-making power, while simultaneously cutting R&D spending back to levels seen four years ago, is its long-term competitive moat being strengthened or eroded?
Moreover, private equity investments typically span several years, with exits dependent on capital market windows such as IPOs or M&A. Given the slowing pace of A-share IPOs and widening valuation disparities in the primary market, the ultimate returns on the 700 million yuan remain highly uncertain. Perfect World Co.,Ltd. has also flagged risks in its filings, including the possibility that funds may fail to raise committed capital if partners default, as well as the long investment cycle and low liquidity inherent in such funds.
Whether this strategy of "contracting internally while expanding externally" is stockpiling resources for the next hit title or drifting further from its core business will only become clear when the financial results of "Yihuan" and the exit returns from these funds are finally revealed—only then can the market deliver its verdict.
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