BIZCHINA / Biz Media Digest
IT:Profit rises at e-gamer
(Shanghai Daily)
Updated: 2006-11-08 15:14
China's biggest online game company posted a 22 percent increase in
third-quarter earnings year on year as a result of higher revenue,
Beijing-based NetEase.com reported yesterday.
The Beijing-based firm also forecast that fourth-quarter profit may drop
as much as 19 percent as a result of falling revenue from its core online
game and advertising sectors.
The company said it earned 314.8 million yuan (US$39.8 million) in the
third quarter, up 0.2 percent from the previous three months.
Total revenue for the past quarter increased 24 percent from a year ago
but dropped 0.6 percent from the second quarter to 571.9 million yuan.
Eighty-two percent of revenue came from online games.
William Ding, NetEase chief executive officer and director, attributed
the revenue decrease from the second quarter to intensified competition
from other game companies, particularly their free-to-play games, and
complaints by some players of the company's popular "Fantasy Westward
Journey," in which they "mistakenly identified an image in it as a
Japanese flag," the company said.
NetEase experienced a severe drop in the number of users around
September, and it may be difficult for the company to resurrect user
levels, officials said.
Company officials said that they are working on their own free game to
attract more online traffic. It could debut in about five months, they
said.
NetEase replaced Shanghai-based Shanda Interactive Entertainment Ltd
earlier this year as the biggest player in terms of revenue in China's
fast-growing online game market. Other major competitors are The9 Ltd and
Tencent Holdings Ltd.
(For more biz stories, please visit Industry Updates)
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