World of Warcraft - Verdinenen am Spieleboom

In Korea erreichte das Spiel in der ersten Woche eine Verkaufszahl von über 100.000 Einheiten. Der asiatische Markt scheint also ebenfalls dieses Spiel zu mögen.

In Europa startete WOW am 11.02., am ersten Wochenende wurden 380.000 Einheiten verkauft, am ersten Tag registrierten sich 250.000 User, was die Server zum zusammenbrechen brachte.

China hat nun aufgrund besonderer Regulatoren (kein ausländischer Entwickler darf in China ein Spiel betreiben) die Besonderheit, das Blizzard nicht selbst den Betrieb übernehmen kann, sondern ein vor Ort ansässigen Provider mit ins Boot nehmen muss.
Hier hat sich letztes Jahr, zur Überraschung aller, der kleine Provider The9 durchgesetzt (gegen die Marktführer Shanda und Netease). Dies wird vor allem daran gelegen haben, dass The9 den größten Batzen Geld in die Hand genommen hat. Inklusive Marketing, Lizenzgebühren usw. dürfte WOW The9 wohl so um die 70.000.000 $ kosten. Der Börsengang im Dezember brachte gerade Mal etwas über 80.000.000$ in die Kasse. Also schon ein stattliches Sümmchen.

Und hier stellt sich nun die eigentliche Frage: Wird The9 mit WOW Geld verdienen oder nicht.

The9 geht im Jahr 2005 mit vier neuen Produkten an den Start. Über Produkt 1-3 will ich im ersten Posting nicht mehr schreiben, da ich deren Umsatzanteil in 05/06 auf maximal 30% beziffern würde. Wichtig und alleine über den Erfolg entscheiden wird sein, was Produkt 4, WOW, machen wird.

Kosten für The9: Garantierte Lizenz über 4 Jahre an Vivendi insgesamt 52 Mio $
                              §
Einnahmen: Hier tritt nun bei der Berechnung ein kleines Problem auf, da in China der normale User nicht zuhause spielt, sondern aufgrund der relativ teuren Anschaffungskosten für die Hardware, sich in einem Internetcafe vergnügt. Davon gibt es weit über 100.000 in China. Somit werden die Einahmen mehr aus Stunden- als aus Monatsverträgen generiert.

Daher zurre ich das Pferd einmal von hinten auf:

Annahme:

Lizenzgebühren liegen im Branchenschnitt bei ca. 22%, dies dürfte im Fall WOW sicherlich zu konservativ sein, The9 dürfte ein wenig mehr geblutet haben, daher gehe ich von 28,5% aus. Dies würde ein Gesamtbudget für WOW von 180 Mio $ Umsatz geben. Davon würden wiederum ca.25% an den Provider (China9) zurückfließen (übliche Margen zu Grunde gelegt). Bei 180 Mio. $ hätten wir also den „BreakEven“, den Bereich, bei dem die Lizenzgebühren an VU im normalen Bereich liegen und THE9 eine stattliche Marge hat. Geld würde natürlich auch schon früher verdient.

Aber wie realistisch sind diese 180 Mio?

Wohlgemerkt, diese Summe bezieht sich auf den Zeitraum von 4 Jahren:

Am Beispiel der USA hätte wir in diesem Zeitraum einen Umsatz von (600.000 * 14,95 * 12 * 4) von 430.560.000 $ gemacht, auf Basis der zahlen von heute.

China zählt bereits über 10.000.000 Mio Onlinespieler, 600.000 wären also knappe 6% des Marktes. Hierzu muss man noch wissen, dass in China der Markt der Onlinespiele viel weiter erschlossen ist als bei uns, wo er noch ein kleines Exotendasein führt.

Nun gehe ich davon aus, dass China von der Marge her nicht ganz an die USA heran kommt, mache hier einen Abschlag von 20% und gehe davon aus, das im Schnitt max. 300.000 User teilnehmen (50% Abschlag), so komme ich wiederum ziemlich genau auf meine 180 Mio Umsatz, hierbei fließen über 40 Mio. in die Taschen vom Betreiber. Diese Zahlen beruhen aber auf sehr konservativen Schätzungen, sollte das Spiel einschlagen.

Ich habe auch noch eine Studie, die sich mit „Nutzungshäufigkeit pro User“ usw. beschäftigt und einen Kundenstamm von 200.000 Usern zu Erfüllung der 180 Mio berechnet, also noch positiver.

Mein erster Eindruck ist also, WOW müsste mit ziemlich hoher Wahrscheinlichkeit ein Blockbuster in China werden und dem Betreiber märchenhafte Gewinne bescheren. Der Aktienkurs dürfte davon nicht zu knapp profitieren.  Allerdings basieren diese Annahmen natürlich auf einem Fortschreiben der Erfolgsgeschichte von WOW. Floppt das Spiel in China, warum auch immer, floppt auch der Kurs.

Umsatzwachstum:

2004: 0 – 5 Mio. 2005: 50 Mio. 2006: 124 Mio.

Ich gehe hierbei davon aus, das WOW im Juni 05 released wird.
Daher entfaltet es seine volle Ertragskraft erst in 2006 und wird wohl auch sein Peak an Benutzern erreichen.


Risiken sehe ich neben den evtl. einzigartigen Geschmack der Chinesen noch in deren Politik, (letztes Jahr sind mehrere Spiele verboten worden, unter anderem FIFA 2005, WOW hat aber wohl schon die Lizenz erhalten), sowie im Schwarzmarkt (es gibt anscheinend bereits Piratenserver).  Beide sehe ich aber als nicht sehr Wahrscheinlich für Ausfall von WOW an.

Über das weitere Potential der Aktie, aufgrund des boomenden Marktes, zukünftiger höherer Margen durch Eigentwicklungen und die drei andern Spiele will ich wie gesagt erstmal noch nichts schreiben. Mich würde Eure Meinung zu dem Wert interessieren.

Eines dürfte klar sein: Onlinegaming ist die Zukunft, die Unterhaltung des 21. Jahrhunderts, China ist das Land der nächsten Dekade, das zusammen hört sich sehr viel versprechend an. Eine Wachstumsbranche in einem Wachstumsmarkt.

Gruesse,
alpet

Shanda (SNDA) also announced strong growth in the fourth quarter on Thursday. The stock jumped 14.5 percent in after hours trading after results were announced, and is up 7.2 percent on the week to US$34.62. Total revenue for the fourth quarter increased 21.9 percent quarter on quarter (QoQ) from US$44.9 million to US$54.7 million. Online game revenues increased 20.7 percent to $49.8 million in the fourth quarter from $41.2 million in the third quarter. Online game revenues accounted for 90.9 percent of total revenues, compared to last quarter's 91.8 percent. MMORPG revenues grew 11.7 percent QoQ to $38.3 million from US$34.3 million in the third quarter, while casual game revenues jumped 64.9 percent from US$7 million to $11.5 million. Shanda's other businesses, including online advertising, game merchandise and wireless services, grew by 35.5 percent QoQ to US$5 million from US$3.68 million. Net income for the fourth quarter was $28 million, up 40.1 percent from US$19.95 million of third quarter. [Note Shanda stock fell sharply in Friday trade, ed.]

Online gaming company The9 is up 15.6 percent for the week to $22.26. On Monday it was announced that Bear Stearns initiated coverage on The9 with an Outperform rating, giving the stock an immediate boost. Bear Stearns was the underwriter for The9's IPO. On Wednesday The9 announced that it has obtained an exclusive license from Beijing Powerspace to operate the 3D martial arts massively multiplayer online role playing game (MMORPG) ZhiZun. With regards to the company's potential blockbuster World of Warcraft (WOW), The9 said that it has spent 100 million Yuan purchasing and setting up servers for the game.

Netease (NTES) is up 0.66 percent on the week to $43.75. On Monday Netease director William Ding told press that Netease gaming revenues would be 700 million Yuan for the fourth quarter and that Netease has 20 percent of China's online gaming market. The following day the company responded that revenues would be below 700 million Yuan. On Wednesday Netease announced the launch of new pay email services that include accounts up to 5GB in size for 30 Yuan a month.

Deutsche Bank Securities initiated coverage on Netease and Sina (SINA) with Buy ratings this week. Deutsche Bank has a target of $66 for Netease and $40 for Sina. Sina (SINA) is up 30 cents to $26.95 on the week. Deutsche was less bullish about Sohu (SOHU), initiating coverage with a Hold rating. Sohu gained 4.5 percent on the week to close at $16.48. Tom Online (TOMO), is up 14.8 percent for the week to $13.28.

Ninetowns (NINE) is up 10.9 percent this week, closing at $9.30. On Thursday the company announced that is has won a $680,000 contract to develop an internal Decision and Support System for the State Administration for Quality Supervision and Inspection and Quarantine of the PRC. Ninetowns will announce fourth quarter results after the market closes on February 23.

51jobs (JOBS) is up 21.4 percent this week to $27.25. On Wednesday, the company announced the establishment of a sales office in northeast China's Changchun province where it will launch a local edition of its Career Post Weekly. Also on Wednesday, US based online job search company Monster announced that it will pay $50 million for a 40 percent stake in 51job competitor ChinaHR.com, with an option to take a 51 percent stake later.

China Netcom (CN) is up 5.35 percent this week, closing at $29.32. On Monday it was reported that Chine Netcom, which last month bought a 20 percent stake in Hong Kong telecom operator PCCW for $1 billion, will set up a joint venture with PCCW that will focus on video and wireless broadband services.

Reporting next week are: Sohu, before the market opens on Monday, Sina, after close of market on Monday, and UTStarcom on Tuesday.

February 23, 2005
The9 (NCTY) - notes from the Q4 2004 conference call
The9 (ticker: NCTY) announced Q4 2004 results today. Here are some key points from the company's conference call:

NCTY will announce a major marketing campaign with Coca-Cola (ticker: KO) in March. The campaign will revolve around the company's new online game World of Warcraft (WoW). Financial details were not disclosed.
Management remains incredibly optimistic about WoW's prospects. They are encouraged by WoW's success in the US and Korea.
Management dispelled concerns that many PCs in China are incapable of operating WoW.
They haven't seen any signs yet of pirated servers running WoW.
Blizzard, WoW's developer, does not allow the bartering of game objects from the WoW. Some Chinese online game companies have setup forums for gamers to do this.
Management sees a major shift in the location of game playing. 60% of gamers are now playing from home - on their PCs - and the remaining 40% are playing in Internet cafes. This represents a major increase in gamers playing from home.
Management is also seeing a major shift from 2D to 3D games.

On the windswept plains of the Arathi Highlands, priests and paladins battled creatures of elemental fire and water as they strove to free the spirit of an entrapped princess. To the south, leather workers and alchemists crowded around auctioneers in the bustling underground city Ironforge to hawk their wares while speculators sifted for bargains.

Meanwhile, high in towering Blackrock Spire, dozens of gnomes and humans, dwarves and night elves banded together to assault the legions of the fearsome General Drakkisath.

And in an unmarked building in a nondescript office park here, the builders at Blizzard Entertainment were assembling yet another challenge for the player-heroes of World of Warcraft, the colorful three-dimensional online fantasy that since its release 10 weeks ago has become one of the world's fastest-selling computer games.

From around a dark, windowless room, nine young men peered into the unfinished virtual interior of Karazhan, a haunted tower set in a forlorn mountain pass that will open later this year. "As you can see, the architecture is a little ornate, a little Gothicky," said Aaron Keller, a 29-year-old designer, gesturing to the 3-D model on the computer screen before him. "We're thinking about turning these arches into horse heads."

Twenty minutes of discussion ensued about animal heads carved into just a few spots of one segment of a tower that many users will never even see. It might seem self-indulgent, but it is just one example of the fanatical attention to detail that over the last decade has made Blizzard a premier developer of PC games and turned its Warcraft, Diablo and StarCraft universes into landmark game franchises. (The studio has a minimal presence in the console market.)

Not only have Blizzard's games sold more than 40 million copies over the last 11 years, but they have also inspired a level of enthusiasm that may most closely resemble an opera audience's rapturous devotion to a renowned diva.

Computer Gaming World, the game magazine, called World of Warcraft "a game world so insidiously addictive, so rich in imagination, so fun and beautiful and funny and charming that we have no desire to ever log out and resume our real lives."

Since massively-multiplayer games emerged into prominence with Ultima Online and EverQuest in the late 1990's, the genre has been considered the preserve of only the most serious players: young men with dozens of hours a week to spare grinding through repetitive virtual chores.

World of Warcraft has overshadowed EverQuest II, also released last fall, largely because it remains accessible for more casual players (say, by allowing them to accomplish meaningful quests in less than an hour) while also challenging the hard core (say, by including foes that require dozens of players to defeat.)

And unlike console games, which are basically finished once they are shipped, PC games played online, like World of Warcraft, can be enhanced and enlarged. In fact, users demand it.

Still, as stellar as Blizzard's track record has been, the company was set on its heels by the game's success. Overwhelmed by the sheer number of players, the game's servers conked out repeatedly in the early going, though performance has improved in recent weeks.

Like most massively-multiplayer online games, World of Warcraft requires a monthly subscription fee ($14.99 a month) in addition to the software ($49.99 in the United States for Windows and Macintosh systems; for ages 13 and older). Customer service has been one of Blizzard's hallmarks, but initially the company did not appreciate just how much more demanding customers become when they are paying a regular subscription fee, as opposed to simply buying a box with some disks in it.

While they almost universally loved the game itself, critics have slammed the company on the Internet over customer care and technical support issues.

Bin schon seit längerem in Shanda drin. Die Aktie könnte ähnliches Potential haben. Habe WOW selbst getestet, macht wirklich Spaß und der Chinesische Markt ist ja nun wirklich riesen groß.

Weisst du wann Release ist ?
Die Aktie ist ja fast auf ATL, nehme sie mal auf meine Watch.

Gruesse,
vani

Kurs liegt fast auf Emissionsniveau.

 

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15. Februar 2005, Paris, Frankreich: Blizzard Entertainment® kündigte heute an, dass World of Warcraft® in Europa ein äußerst erfolgreicher Start gelungen ist. Nach der Veröffentlichung des Spiels am Freitag, den 11. Februar, konnte das Spiel innerhalb der ersten 24 Stunden bereits rekordverdächtige Verkaufszahlen aufweisen. Bereits am ersten Tag wurden von World of Warcraft, Blizzards abonnierbarem Massively Multiplayer Online Role-Playing Game (MMORPG), mehr als 280.000 Exemplare verkauft – eine Zahl, die größer ist als das bis dahin angenommene Gesamtvolumen des europäischen MMORPG-Marktes. Diese Zahl stieg über das erste Wochenende auf 380.000 verkaufte Exemplare an.  

ist, dass WOW in CHina im Juni released wird. Evtl. auch früher. Aber auch die 3 anderern Speile sind interessant, hier versuche ich mal noch ein paar Informationen zusammenzutragen. Ist nicht immer einfach, bei den größtenteils chinesischen Webseiten.

Gruesse,
alpet

Wie ist das eigentlich mit den Verküfen der Spiele und dem ersten Freimonat. Verdient The9 da auch schon etwas oder erst ab der Abophase ?

vani

Blizzard and Soft-World will collaborate on all aspects of World of Warcraft's operations in Taiwan to provide local relevancy and the best playing experience possible for the Taiwanese market. Soft-World will provide localization of the game in traditional Chinese, as well as game masters, local call-center service, and technical support for the Taiwanese World of Warcraft audience.

World of Warcraft will offer Taiwanese gamers a fresh and exciting experience as they take on the role of heroes and quest in a land of epic adventure and intense exploration. Building on the success of the Warcraft® series, Blizzard aims to expand the MMORPG genre with a deep, immersive, user-friendly experience that will appeal to both veteran gamers and casual players alike. World of Warcraft takes place three years following the aftermath of Warcraft III: The Frozen Throne™, when a great tension has settled over the ravaged world of Azeroth. As the various races begin to rebuild their shattered kingdoms, new threats, both ancient and terrifying, have arisen to plague the world once again. Players must explore the lands of Azeroth, forge fellowships with other players, and build their strength in order to prevail.


Best known for their series Warcraft®, StarCraft®, and Diablo®, Blizzard Entertainment (www.blizzard.com, a division of Vivendi Universal Games) is a premier developer and publisher of entertainment software renowned for creating many of the industry's most critically acclaimed games. The company's free Internet gaming service Battle.net® provides a forum in which owners of Blizzard's games can play in a multiplayer mode remotely across the Internet and against other gamers from around the world.


Gruß
Reiter

World of Warcraft wird derzeitig in 75% der koreanischen Internet Game Rooms (IGRs) gespielt, die in Korea die am meisten verbreitete Art sind, PC-Spiele zu spielen. IGRs abonnieren ein MMORPG, und die Spieler kaufen Spielzeit über den IGR.

Nordamerika:

Mehr als 200.000 Abonnenten und eine Spitzenzahl von mehr als 100.000 gleichzeitig eingeloggten Spielern bereits während der ersten 24 Stunden nach Veröffentlichnung des Spiels
Derzeitig mehr als 800.000 Spieler
Blizzard Entertainment konzentriert sich nun darauf, das Spiel in zusätzlichen Regionen Asiens zu veröffentlichen und den Kundendienst und die Unterstützung der bestehenden Datacenters zu verstärken. World of Warcraft soll in China noch dieses Jahr erscheinen, wo die Begeisterung für das Spiel bereits dramatische Höhen erreicht hat. Die 100.000 Anmeldungen, die für den chinesischen World of Warcraft Betatest bereits innerhalb der ersten Stunde eingingen, sind ein Beleg für die allgemein herrschende Nachfrage nach dem Spiel. Kurze Zeit später soll das Spiel auch in Taiwan und anderen Ländern veröffentlicht werden.


Über World of Warcraft

Chinese online gaming company The9 (Nasdaq: NCTY) announced that it will begin releasing closed beta testing accounts for its licensed 3D online game World of Warcraft (WoW) on Monday. According to The9, over one million gamers applied for closed beta accounts for the game in just one week. The9 did not say when closed beta testing will begin. Rumors last week said closed beta will begin March 20.

Unglaublich !
Und da machen sich manche sorgen, ob die ihre 100.000 Spieler bekommen. Das ist ja eine Lizenz zum Gelddrucken. Schade, dass der Titel so unbemerkt bleibt.

Hier mal eine Analysteneinschätzung, um ein wenig Schwung in diesen Thread zu bringen:

www.chinastockblog.com/2005/06/pacific_growth_.html

wirklich einfach !

China will be forcing any massively multiplayer title played inside their borders, including World of Warcraft and Lineage II, to restrict how long a user can play in one session. The system works by reducing a character's in-game stats by 50% after 3 consecutive hours of play. After 5 hours, your character is reduced to the lowest point in the game, and won't return to normal until the player has been logged out for an additional 5 hours. In both cases, you'll also find it harder to find items or earn experience points. Any massively multiplayer game that does not follow this system will be deemed illegal by the government of China.

Optisp and SINA, the companies that operate World of Warcraft and Lineage II, have both agreed to utilize the system when it is ready.

The goal of the system is to keep children from becoming addicted to video games, and is expected to be ready for testing in October of 2005, and ready for use in 2005 or 2006. However, there is no effort made to separate older gamers and recognized adults from younger children. The move also removes the ability for parents to decide how their children should be raised. A few things we should keep in mind here in the U.S. as we discuss government regulation of the game industry in our own country:


Was meint ihr dazu ?

dann ist WOW zum ersten Mal komplett drin im Quartal. Werde morgen meine Positionen wieder zu 50% aufbauen. Sehe das Problem mit den gesetzlichen Restriktionen als nicht so Problematisch an. Der Preis wird wohl ein wenig höher gehen. Evtl legen sich die User mehrere Accounts an (weiss allerdings nicht, ob das möglich ist).

Gruesse,
alpet

China: The9 profitiert von Spiele-Boom

SHANGHAI - Eigentlich wollte die chinesische Regierung mit Regulierungen der weit verbreiteten Sucht nach Online-Rollenspielen im Land der Mitte Einhalt gebieten. Die Zahlen von The9 Ltd. (WKN: A0DNY7) wurden hierdurch offenbar nicht beeinflusst. Gestern vermeldete der Spieleentwickler- und Anbieter nachbörslich steigende Umsätze und Gewinne.

Demnach stieg der Nettoumsatz im Vergleich zum Vorjahreszeitraum um rund zwei Prozent auf 22,8 Mio. US-Dollar. Dieser Wert liegt aber 232 Prozent über dem Niveau des Vorquartals. Bei dem Ergebnis wurde der Turnaround geschafft. Nach einem Verlust von 2,8 Mio. Dollar im zweiten Jahresviertel machte The9 nun einen Nettogewinn von 4,7 Mio. Dollar.


Die starke Entwicklung im dritten Quartal sei vor allem auf ein Anziehen des Geschäfts mit dem Bestseller-Rollenspiel World of Warcraft zurückzuführen. Gleichzeitig wurden die eigenen Ausgaben um rund ein Viertel reduziert. (ndi/rem)

Commenting on the third quarter, Jun Zhu, Chairman and Chief Executive Officer of The9 Limited, said: "The third quarter of 2005 was the first quarterly period which fully reflected our operation of Blizzard Entertainment's World of Warcraft ("WoW") in China. In the third quarter, we attained peak and average concurrent WoW users of approximately 467,000 and 240,000, respectively. Notably, after a normalization of customer usage patterns in the third quarter, we have seen impressive metrics in October, with new account activations continued daily and recording peak concurrent WoW user level exceeding 500,000. As of October 31, 2005, more than 2.5 million paid accounts have been activated since launch."

Chief Financial Officer, Hannah Lee, commented, "The revenue and earnings potential of World of Warcraft in the China market is becoming more evident. Net revenues were US$22.8 million in the third quarter of 2005 and operating profit was US$6.2 million. Although we accounted for two months of minority interest in China The9 Interactive Limited ("C9I"), our subsidiary that operates WoW in China, before we completed the acquisition of the remaining 31.1% interest in C9I in late August 2005, we recorded net income of US$4.7 million. Starting from this quarter, we will begin presenting adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") as we believe this information will be useful to the company and investors by highlighting the major expenses that will not result in cash settlement in the future nor impact the company's future cash earnings or cash flows."


The9's Unaudited Third Quarter 2005 Results

For the third quarter of 2005, The9 reported net revenues of RMB184.8 million (US$22.8 million), an increase of 232% from the second quarter of 2005 or 2,096% from the corresponding period in 2004. The increase was mainly due to significant growth in revenues from online games as a result of The9's commercial operations of WoW in China which commenced in June 2005. Net revenues attributable to the operation of WoW for the third quarter of 2005 was RMB180.6 million (US$22.3 million).

For the third quarter of 2005, revenues from game operating support, website solutions and advertisement were RMB0.9 million (US$0.1 million), a decrease of 20.2% from the second quarter of 2005 or 85.1% from the corresponding period in 2004. These revenues, which are mainly generated from the provision of game operating support to 9Webzen related to the operation of MU in China, decreased in the third quarter of 2005 as a result of a decline in MU revenues.

Other revenues in the third quarter of 2005, which mainly included sales of game-related accessories and promotional activities related to WoW, increased to RMB3.1 million (US$0.4 million) from RMB2.1 million (US$0.3 million) in the second quarter of 2005, primarily as a result of increased sales of WoW licensed merchandise in the third quarter of 2005 compared to the second quarter of 2005.

Gross profit for the third quarter of 2005 increased by 207% to RMB92.6 million (US$11.4 million) from RMB30.1 million (US$3.7 million) in the second quarter of 2005. Gross profit margin declined to 50.1% for the third quarter of 2005 from 54.1% in the second quarter of 2005. The decline in gross margin was primarily related to the following two factors:

a. one-month amortization of intangibles assets of RMB7.4 million (US$0.9 million) relating to assets acquired in connection with The9's acquisition of the remaining 31.1% interest in C9I; and

b. costs such as internet data center rental, server depreciation and certain staff costs incurred prior to commercial launch of WoW in June 2005, were previously included in the product development expenses; after the commercial launch of WoW, such costs have been included in our cost of services.

Operating expenses decreased by 24.9% to RMB42.2 million (US$5.2 million) in the third quarter of 2005 from RMB56.1 million (US$6.9 million) in the second quarter of 2005. This was mainly due to a significant decrease in product development expenses in the third quarter. As discussed above, certain costs incurred prior to the commercial launch of WoW was classified as product development expenses in the second quarter of 2005 as such costs related to the development and testing of WoW. Subsequent to the commercialization of WoW in China, such expenses are included in our cost of services as such costs are directly related to the provision of online game services. In addition, in the second quarter of 2005, we recognized RMB5.0 million (US$0.6 million) advances paid to third party developers in connection with early-stage game development of our second self-developed game as product development expenses.

As a result of the aforementioned factors, we recorded a profit from operations of RMB50.4 million (US$6.2 million) in the third quarter of 2005 compared with a loss from operations of RMB26.0 million (US$3.2 million) in the second quarter of 2005.

Other expenses for the third quarter of 2005 was RMB2.8 million (US$0.3 million) compared to other income of RMB5.2 million (US$0.6 million) in the second quarter of 2005. This decrease was primarily due to foreign exchange loss of RMB8.1 million (US$1.0 million) related to the appreciation of the Chinese Renminbi against the US Dollar in July 2005 which was partially offset by revenues of RMB5.6 million (US$0.7 million) recognized from sale of Pass9, our proprietary integrated membership management and payment system. Although the company generates substantially all of its revenues in Chinese Renminbi which has become more valuable in US Dollar terms, in accordance with GAAP, the company translates its monetary assets and liabilities which are denominated in currencies other than Chinese Renminbi into Chinese Renminbi as of each accounting period end.

Equity in loss of affiliated companies mainly results from The9's 51% equity interest in 9Webzen, which operates MU in China, its 40% equity interest in Beijing Wanwei, a PRC game portal company, its 20% equity interest in Object Software, a game developer based in China and its 30% equity interest in the joint venture company that operates the WoW game in other parts of Greater China. For the third quarter of 2005, equity losses from affiliated companies, net of taxes, amounted to RMB4.6 million (US$0.57 million), compared to a loss of RMB4.0 million (US$0.49 million) for the second quarter of 2005 mainly due to increased losses from affiliates.

As a result of the cumulative effect of the foregoing factors, net income for the third quarter of 2005 was RMB37.7 million (US$4.7 million) compared to net loss of RMB23.0 million (US$2.8 million) in the second quarter of 2005, representing earnings per share and per ADS of RMB1.56 (US$0.19).

Adjusted EBITDA (non-GAAP) and negative adjusted EBITDA (non-GAAP) are defined as earnings or loss, respectively, before depreciation of fixed assets, impairment and amortization of intangibles, income tax expenses/benefits and share-based compensation expenses relating to stock options granted to directors, employees and consultants, as applicable. Adjusted EBITDA (non-GAAP) for the third quarter totaled RMB58.1 million (US$7.2 million), compared to adjusted EBITDA (non-GAAP) of RMB2.9 million (US$0.4 million) for the same period in 2004 and negative adjusted EBITDA (non-GAAP) of RMB5.3 million (US$0.7 million) for the previous quarter.

Adjusted EBITDA (non-GAAP) per share was RMB2.40 (US$0.30) for the quarter, compared to adjusted EBITDA (non-GAAP) per share of RMB0.29 (US$0.03) for the same period of 2004 and negative adjusted EBITDA (non-GAAP) per share of RMB0.22 (US$0.03) for the previous quarter.

As of September 30, 2005, the Company's total cash and cash equivalents balance was RMB483.0 million (US$59.7 million). The decrease in cash and cash equivalents from RMB793.4 million (US$98.0 million) as at December 31, 2004 was mainly due to the combined result of purchases of WoW servers, prepaid royalty payment for the first year of WoW's operating term, and partial payment to the joint venture partner for the purchase of the remaining 31.1% interest in C9I, offset in part by receipts of prepaid card proceeds and repayments received against loan receivable.


Regarding 9Webzen

The9 owns a 51% equity interest in 9Webzen but cannot consolidate 9Webzen in The9's consolidated financial statements due to the significant participation right possessed by Webzen, Inc., the holder of the remaining 49% interest in 9Webzen. Prior to The9's commercialization of WoW in China, game operating support revenues from The9's provision of services related to 9Webzen's MU operation had contributed significantly to The9's consolidated revenues since February 2003, when MU was commercially launched in China. Equity from 9Webzen was also a significant contributor to The9's consolidated net income historically. The9's share of loss from 9Webzen in the third quarter of 2005 was RMB2.3 million (US$0.3 million) compared with RMB3.1 million (US$0.4 million) in the previous quarter, which was a result of a decline in 9Webzen's revenue from MU and cost-cutting measures during the period.

We have historically included the separate financial information of 9Webzen in our quarterly earnings announcements since we became a public company in December 2004. In the nine-month period and quarterly period ended September 30, 2005, The9's equity from 9Webzen and The9's share of the total assets of 9Webzen were less than 20% of The9's operating income and total assets, respectively, for the corresponding period. Therefore, The9 has decided not to present 9Webzen's separate financial information for the third quarter of 2005.


Recent Developments

In July 2005, The9 announced that it has signed a term sheet to purchase the 31.1% minority interest in C9I, from the joint venture partner. In late August 2005, the purchase was completed and C9I became a wholly-owned subsidiary of The9. No minority interest is therefore recorded in our unaudited consolidated statement of operations since September 2005. The allocation of purchase price is prepared based on management's best estimates at this time. As permitted under GAAP, certain estimates may be subject to adjustment as we finalize the purchase price allocation during the fourth quarter of 2005. Based on the current purchase price allocation, The9 has recognized RMB7.4 million (US$0.9 million) of amortization related to the estimated fair value of the intangible assets acquired in the quarter ended September 30, 2005.

Furthermore, in October 2005, The9 announced that an exclusive license from Vivendi Universal Games, Inc. on behalf of WoW publisher and developer Blizzard Entertainment, Inc. to operate WoW in other parts of Greater China was granted to a joint venture between a locally renowned online game operator based outside of mainland China and The9's subsidiary. The9 indirectly owns a 30% equity interest in this joint venture.


Non-GAAP Measures

To supplement the consolidated financial statements presented in accordance with United States GAAP, The9 uses non-GAAP measures of adjusted EBITDA and negative adjusted EBITDA, which are adjusted from the most directly comparable financial measures calculated and presented in accordance with GAAP to exclude certain expenses. These non-GAAP financial measures are provided to enhance investors' overall understanding of the company's financial performance.

Adjusted EBITDA (non-GAAP) and negative adjusted EBITDA (non-GAAP) are defined as earnings and loss, respectively, before depreciation of fixed assets, amortization of intangibles, income tax expenses/benefits and share-based compensation expenses relating to stock options granted to employees, directors and consultants, as applicable. The company believes its adjusted EBITDA provides useful information to both management and investors as they exclude certain expenses that are not expected to result in future cash payments. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. For more information on this non-GAAP financial measure, please see the tables captioned "Reconciliation of non-GAAP to GAAP results" set forth at the end of this release.



Conference call / Webcast information

The9's management team will host a conference call on Thursday, November 10, 2005 at 7:00 PM US Eastern Time, corresponding with Friday, November 11, 2005 at 8:00 AM Beijing Time, to present an overview of The9's financial performance and business operations.

Investors, analysts and other interested parties will be able to access the live conference by calling +1-617-786-2903, password "81178862." In the U.S., members of the financial community may also participate in the call by dialing toll-free +1-800-299-9086, password "81178862". A replay of the call will be available through Nov 17, 2005. The dial-in details for the replay: U.S. toll free number +1-888-286-8010, International dial-in number +1-617-801-6888; Password "85210330".

The9 will also provide a live webcast of the earnings call at the company's website, at corp.the9.com, 15 minutes prior to the call, then click on the icon for "Third Quarter 2005 Financial Results Call" and follow the instructions.

gute Nachkaufchance! Im Moment knapp über 30 USD. Hier was von den Narren:

Bring on the Games!

www.fool.com/investing/high-growth/2007/01/...n-the-games.aspx

Will Frankenhoff
January 4, 2007

After a hard day of work, there's nothing quite as relaxing as booting up your computer and losing yourself in an hour or two of online adventuring, courtesy of such massively multiplayer online role-playing games (MMORPGs) as EverQuest II, World of Warcraft, or Dark Age of Camelot. At least, that certainly seems to be the case in China, home of the world's second-largest Internet population. According to the China Internet Network Information Center, nearly 32% of the nation's 132 million Internet users played games online in 2006, while iResearch estimates that China's online gaming market will reach close to $1 billion in 2007. That's some serious money, and there's nothing virtual about it.

Now, there are a number of ways to play this developing industry, including Motley Fool Rule Breakers picks Shanda Interactive (Nasdaq: SNDA) and NetEase.com (Nasdaq: NTES). But my personal favorite is The9 (Nasdaq: NCTY), which owns the rights to operate Blizzard Entertainment's wildly popular World of Warcraft game in China.

In Foolish terms, I like The9 because it's the purest play in the sector; it derived more than 98% of its revenue in the most recent quarter from gaming services, compared with an average 85% for Shanda and NetEase. While there are those who say that The9's dependence on gaming in general (and World of Warcraft in particular) makes the company a riskier play than Shanda and NetEase, with their more diversified business models, I believe that's like arguing about what is wetter: the ocean or a lake? Simply put, investing in Chinese equities is a risky proposition. Investing in Chinese Internet companies is an even riskier bet, and I figure that if you believe in the future prospects of the Internet companies in China, you go with the purest plays in each sector: Motley Fool Rule Breaker Baidu (Nasdaq: BIDU) in search, Ctrip.com (Nasdaq: CTRP) (a Motley Fool Hidden Gems selection) in online travel, and The9 in gaming.

Let's take a look, shall we?

At the present time, The9 derives virtually all its revenue from operating World of Warcraft, a game that was launched in China on June 7, 2005, and now has roughly 5.9 million users paying for the privilege of becoming a spell-hurling wizard, a buff fighter, or a sneaky rogue. For the third quarter ended Sept. 30, the adventuring activities of these die-hard gamers enabled The9 to post sales of $29.5 million, a 26% increase over last year's period, while net income totaled $8.1 million, up 71% from the third quarter in 2005.

I would hasten to point out that both these numbers would have been substantially higher if the company hadn't engaged in some necessary operational revamping during the quarter, which included issuing a content update patch, installing a new server site, and taking down existing servers to upgrade their hardware to better streamline operations in the future. Indeed, right after the new servers were installed, peak concurrent users spiked to a new record of roughly 670,000 at the beginning of the fourth quarter, up from the previous record of 595,000 in the third quarter.

This upsurge in users bodes well for the company's results in the near term. And its plans to launch four new major games for which it has obtained exclusive licensing rights in China -- Granado Espada, Soul of the Ultimate Nation, Guild Wars, and Hellgate: London -- over the next 12 months will add significantly to both the company's top- and bottom-line results. In addition, The9 is also working on developing its own 3-D fantasy MMORPG game, titled Fantasy Melody Online.

Pretty interesting stuff, eh?

It also doesn't hurt that shares of The9 are attractively valued. At a recent price of $32, shares of The9 trade at roughly 18 times forward earnings estimates.

Don't get me wrong ... the stock is risky, but so are all Chinese Internet plays. If you're a believer in the growth potential of the Chinese Internet gaming market, The9 is a stock that you should consider taking a look at.

For related Foolishness:

   * Shanda Baby
   * The Best International Stock for 2007: NetEase.com

Time's running out on the 2006 Foolanthropy charity drive. Five charities are competing for donations, with the one raising the most money by Jan. 7 earning an additional $10,000 from the Fool. Please consider giving to these worthy causes, and thanks for your support.

Fool contributor Will Frankenhoff is enjoying his time writing for The Fool more than reading The Financial Times, rooting for the Jints, or taking a nap. He welcomes your feedback. He does not own shares in any of the companies mentioned above. The Fool has a disclosure policy.

Launched by The9 in China back in June 2005, WOW already has 5.9 million paying subscribers in China, and the company just announced that peak concurrent users just hit a new record of 670,000 at the beginning of the fourth quarter, up from the previous record of 595,000 in the third quarter. These numbers are only expected to climb with the recent release of the new World of Warcraft expansion pack: Burning Crusades -- a module that is currently the best-selling video game on Amazon.com.

Pretty impressive stuff, eh? Well, so are the effects on The9's results. For the third quarter ended September 30, 2006, The9 recorded sales of $29.5 million and net income of $8.1 million, up 29% and 72% respectively, from last year's period. More importantly for investors, these numbers would have been significantly higher if the company hadn't taken most of its servers down for maintenance and upgrading during the quarter.

Now, while World of Warcraft currently is the sole driver of The9's growth (over 99% of revenue in the most recent quarter), the company has been increasing its stable of games and is set to launch four new major games that it has obtained exclusive licensing rights to in China -- Granado Espada, Soul of the Ultimate Nation, Guild Wars, and Hellgate: London -- over the next twelve months. Furthermore, just last week The9 announced that it had obtained the rights to operate Ragnarok Online 2: Epic of Light, a game that was voted by Chinese gamers as the most anticipated Korean game of 2007.

In Foolish terms, I believe that The9 has a solid foundation in its World of Warcaft Chinese franchise, and the launch of these upcoming games will add significantly to its top- and bottom-line results. I also like the fact that shares of The9 are attractively valued, trading at around 18 times forward conservative earnings estimates -- a 31% discount to the company's projected long-term growth rate.

Please feel free to take a trip to Motley Fool's CAPS community to rate The9 an "outperform" if you agree that The9 has game, or hit the stock with an "underperform" if you believe that I've lost my Foolish mind. At the very least, the free CAPS online database offers you the chance to share your own unique insights and investment philosophy with nearly 20,000 other stock sleuths ... and gain their collective wisdom in return.

Based on your votes on CAPS, we'll crown The Best E-Commerce Stock for 2007 sometime next week.

See all our Foolish candidates for 2007's best e-commerce stock, then add your own ratings in Motley Fool CAPS.

Fool contributor Will Frankenhoff is enjoying his time writing for The Fool more than reading The Financial Times or taking a nap. He welcomes your feedback. He does not own shares in any of the companies mentioned above. Amazon is a Motley Fool Stock Advisor pick. The Fool has a disclosure policy.

Onlinegames sind ein RIESEN Wachstumsmarkt, welcher noch lange nicht an seinem Höhepunkt angekommen ist...Bin leider vor der Korrektur eingestiegen und damit noch leicht im Minus, aber auf 2 Jahressicht sind hier > 100 % LOCKER drin. The9 ist im Branchenvergleich sehr günstig bewertet... Activision und Electronic Arts (die 2 größten Spieleproduzenten weltweit) sind mit KGV's über 30 bewertet...The9 "nur" mit knapp über 20 im Moment. Und... sie haben sich die Vertriebsrechte für WOW und Hellgate London (der nächste Kracher in diesem Bereich) für die nächsten 3 Jahre im asiatischen Raum gesichert.
Also, wer noch ein "alternatives" Investment für sein Depot sucht, der sollte The9 nochmal genauer unter die Lupe nehmen...ist wirklich interessant.

Lg