Sohu.com Limited (SOHU): Marketing Mix Analysis [Dec-2025 Updated]

You're looking at a company that has defintely completed its transformation; the legacy media business is now just a minor, shrinking piece next to its dominant gaming engine, and that reality shapes every element of its current market approach. As we map out the late 2025 Marketing Mix, the story is clear: the Product is high-margin online games, distributed digitally across the mainland, priced via free-to-play with in-game purchases, and promoted through in-game events, while the old media promotion is fading fast. The Q3 2025 financials confirm this: gaming revenue hit $162 million with an impressive 87% gross margin, making the $14 million from marketing services look almost negligible, even as the firm guides for a GAAP net loss up to $35 million in Q4 2025. If you want to see precisely how this lopsided 4P structure is positioned for the next six months, keep reading for the full breakdown.

Sohu.com Limited (SOHU) - Marketing Mix: Product

The product element for Sohu.com Limited centers on its dual business structure, primarily comprising online games developed by its subsidiary Changyou and its extensive online media platform.

Online game portfolio via Changyou subsidiary

The online game business, conducted through Changyou, is the clear engine for Sohu.com Limited's current financial performance. For the third quarter ended September 30, 2025, online game revenues reached US$162 million. This figure represents a significant year-over-year increase of 27% and a quarter-over-quarter surge of 53%. The gross margin for online games specifically was reported at 87% for Q3 2025.

Key IP includes Tian Long Ba Bu (TLBB) PC and Mobile

A key intellectual property (IP) driving this success is Tian Long Ba Bu (TLBB). The launch of the new PC game, Tian Long Ba Bu: Return, in July 2025 was cited as a main driver for the Q3 2025 revenue jump. Revenue from TLBB PC also saw increases due to content updates and in-game promotional activities during the quarter. Changyou develops and operates a diverse portfolio that includes both PC and mobile titles, such as TLBB PC and Legacy TLBB Mobile.

Sohu Media platform (News App, Video App, PC portal)

The Sohu media platform provides a network of Chinese language web properties. This product matrix is designed to offer a broad array of content and community-based products to millions of Chinese users. The core components of this offering include:

• Sohu News App
• Sohu Video App
• PC portal at www.sohu.com
• Mobile portal at m.sohu.com

Focus on enhancing distinctive social features on media platform

Sohu.com Limited has maintained a strategic focus on refining its media products. Management has specifically concentrated on strengthening the distinctive social features of the platform. The goal is to engage more users, promote vigorous social interactions and distributions, and generate massive premium content through various unique events.

Core revenue driver is the gaming segment, not media

The financial results from the third quarter of 2025 clearly delineate the revenue contribution from the two main product segments. The gaming segment is the dominant revenue generator, which you can see in the comparison below. Marketing services revenues, which represent the media segment's primary revenue stream, were only US$14 million in Q3 2025.

Here's the quick math on the revenue split for Q3 2025:

Total revenues for Sohu.com Limited in Q3 2025 were US$180 million. The gaming segment contributed approximately 90% of the total revenue for the period.

Sohu.com Limited (SOHU) - Marketing Mix: Place

Sohu.com Limited's distribution strategy centers entirely on digital channels, reflecting its nature as an online media and gaming entity. The delivery mechanism for all content and game services is direct to the end-user across its proprietary digital properties.

Primary distribution is digital via mobile applications, which form a critical part of the user access matrix alongside web portals. Sohu.com Limited's comprehensive matrix of Chinese language web properties includes the Sohu News App and the Sohu Video App. The company's online games business, conducted by its subsidiary Changyou, also distributes its portfolio of PC and mobile games directly to consumers.

The core market remains the Chinese mainland, where Sohu.com Limited operates its leading Chinese online media platform and game business group. For the third quarter ended September 30, 2025, total revenues reached US$180 million, with online game revenues accounting for US$162 million of that total.

PC and mobile portals (e.g., www.sohu.com) serve as access points alongside dedicated applications. The PC portal is www.sohu.com, and the mobile portal is m.sohu.com. Analysis of web traffic to sohu.com in October 2025 showed that referrals from Search Engines accounted for 44.99% of traffic, while Social Media Networks accounted for 22.96%.

The direct-to-consumer model for all digital products is evident across its media and gaming segments. The gaming segment, which develops and operates games like TLBB PC and Legacy TLBB Mobile, relies on this direct digital delivery. For PC games specifically, the total average monthly active user accounts (MAU) stood at 2.7 million as of September 30, 2025.

Regarding exploring global markets for online game expansion, the primary financial reporting focuses on the Chinese mainland operations. The Q3 2025 online game revenues were US$162 million, and the guidance for Q4 2025 online game revenues was projected to be between US$113 million and US$123 million.

Here are key operational and financial metrics related to Sohu.com Limited's distribution footprint as of late 2025:

The primary digital access points for Sohu.com Limited's media offerings include:

• Sohu News App
• Sohu Video App
• Mobile Portal: m.sohu.com
• PC Portal: www.sohu.com

The online games distribution platform is www.changyou.com/en/.

Key distribution channel performance indicators:

• Online Games Gross Margin: 87% (GAAP and non-GAAP) in Q3 2025.
• Marketing Services Gross Margin: 10% (GAAP and non-GAAP) in Q3 2025.
• PC Games MAU growth quarter-over-quarter: 15%.
• Q4 2025 Online Game Revenue Guidance Range: US$113 million to US$123 million.

Sohu.com Limited (SOHU) - Marketing Mix: Promotion

Promotion for Sohu.com Limited, as of late 2025, shows a complex picture where the traditional marketing services segment is under pressure, while promotional efforts are heavily integrated into the high-growth online games segment and platform enhancement initiatives.

The financial reality for the marketing services arm, which directly relates to advertising promotion, indicates a contraction. Marketing services revenues for the third quarter of 2025 were reported at $14 million. This figure represents a year-over-year decline of 27% and a sequential decrease of 13% from the second quarter of 2025. Looking ahead, the guidance for the fourth quarter of 2025 suggests a slight sequential recovery, estimating marketing services revenues to be between $15 million and $16 million.

Within the online games business, which is the primary revenue driver, promotional activities are key to monetization. The strong performance of this segment, with Q3 2025 revenues at $162 million, is directly attributed to specific promotional tactics. For instance, the new PC game, Tian Long Ba Bu: Return, launched in July 2025, contributed significantly, alongside revenue increases from TLBB PC resulting from content updates and in-game promotional activities executed during the quarter.

Sohu.com Limited continues to use significant events as a promotional lever to drive user engagement and bolster content distribution across its media properties. The Chairman and CEO noted a commitment to generating and distributing diversified content, 'leveraging our product metrics and distinctive events'. Furthermore, Sohu Video is actively working to enrich its content ecosystem by increasing the procurement of American TV shows and movies, while positioning Sohu Video as a 'new force' in the vertical short-drama field.

Technological advancements are being incorporated into promotional efforts, particularly in content creation and delivery tools. The use of Artificial Intelligence (AI) is noted in several areas:

• AI improves tools for advertising, specifically in content generation, abstracts, and live streaming tools.
• In game production, AI assists with art design, UI, audio, and material creation, which enhances operational efficiency.

A core, ongoing strategic focus for the Sohu media platform involves enhancing its community aspects. Management explicitly stated in Q1 2025 that they 'continued to concentrate on strengthening the distinctive social features of our platform'. This focus on social interaction is fundamental, as the platform is described as a mainstream media platform with social features, attracting users to be highly engaged in content generation and distribution.

Sohu.com Limited (SOHU) - Marketing Mix: Price

You're looking at the pricing structure for Sohu.com Limited, which is heavily skewed toward its gaming segment, dictating the overall financial profile. The pricing strategy isn't about setting a fixed cost for access; it's about monetizing engagement within a specific environment.

The online game revenue stream is the clear price driver for Sohu.com Limited. For the third quarter of 2025, online game revenues hit $162 million. This segment's pricing model is primarily free-to-play, relying on in-game purchases for monetization. Specifically, the subsidiary Changyou.com operates on an item-based revenue model, where players access games at no initial cost but pay for virtual items like gems, pets, or skill books used within the game. This strategy aims for broad adoption followed by high-value micro-transactions.

This pricing approach yields exceptional profitability for the core business. For online games in Q3 2025, the gross margin was a high 87%. Compare that to the other major revenue source, the Marketing Services segment, which is both low-margin and shrinking. Marketing Services revenue for Q3 2025 was only $14 million, and its gross margin was just 10%. That disparity in margin is key to understanding the company's overall pricing power.

Here's a quick look at the revenue contribution and margin profile from Q3 2025:

The pricing strategy for the media platform, which feeds into the Marketing Services segment, involves setting advertising rates based on reach and engagement, but the results show competitive pressure. The company's outlook reflects this dynamic, projecting a sequential decrease in the high-margin game revenue for the next period, while the low-margin services revenue is expected to see a slight sequential increase.

The expected financial outcome for the near term shows the impact of these pricing realities on the bottom line. For the fourth quarter of 2025, Sohu.com Limited forecasts a GAAP net loss attributable to the company to be as high as $35 million. This guidance suggests that even with the high-margin game revenue, managing operating expenses and the lower-margin segment's performance remains a pricing challenge.

Key pricing model characteristics for the dominant segment include:

• Pricing model is primarily free-to-play access.
• Revenue generation relies on in-game purchases of virtual items.
• High gross margin of 87% achieved in Q3 2025.
• Revenue growth in Q3 2025 was supported by content updates and in-game promotions.

Finance: draft 13-week cash view by Friday.