Despite the record revenue, Shanda’s quarterly profit of 369.3 million yuan ($54.1 million), was still its weakest in three quarters, reflecting intense competition in China’s online game market.

The quarterly profit compared with a profit of 326.5 million yuan a year ago.

Quarterly revenue rose to a record 1.51 billion yuan ($221.6 million) from 1.02 billion yuan a year earlier and compared with the average analyst forecast for $213 million.

The company’s core online game unit, Shanda Games, accounted for about 88 percent of its total revenue and 75 percent of its gross profit in the fourth quarter.

Last week, NetEase reported forecast-beating quarterly results, mostly due to strong performance from its non-gaming online advertising business as China’s economy gains steam on spending from Beijing’s 4 trillion yuan ($586 billion) economic stimulus plan.

Shanda spun off its online game unit last September in a $1 billion initial public offering in New York, in a move to transform itself into a more diversified media company.

Source : Konaxis

According to the sources, Wan Mei, Shanda were all involved in the negotiations with NHN on the transfer of Lian Zhong shares, and Wan Mei once dominated the advantage in negotiations, and currently some staff still believe that Wan Mei would take over NHN’s shares.

According to informed sources, Wan Mei through the analysis of Lian Zhong, believed: the acquisition was not matching Wan Mei’s high-end R&D company direction, so eventually it took the initiative to withdraw from the negotiations before the Spring Festival.

According to sources, Shanda’s plan was that if the acquisition was successful, it would create another independent division with another chess platform under shanda.

Companies like Shanda Games, Perfect World and Changyou.com have tapped China’s huge pool of young Internet users with their games and raked in revenue from sales of virtual items. Players pay real-world cash for items like powerful magic weapons that help them defeat enemies, or for virtual clothing or pets to refine their online image.

Many popular online games in China draw on well-known cultural themes like martial arts or the wars of the nation’s ancient Three Kingdoms era. But China’s game companies face a new culture, different user preferences and competition from market leaders like Activision Blizzard as they work to expand in the U.S.

Shanda Games drew eyes last week by unveiling plans to acquire Mochi Media, a U.S.-based game network that Shanda says will distribute its games worldwide. Shanda, which like Changyou and Perfect World has raised funds by listing its stock in the U.S., will dish out US$80 million in the acquisition.

The move highlighted Shanda’s ambitions abroad. Shanda also has plans with local operators to offer six of its games in the U.S., said Diana Li, CEO of Shanda Games, in a phone interview. Li declined to name the games but said they would keep the free-to-play model they have used in China. By contrast, many U.S. games rely on subscription fees for revenue and do not sell in-game items for real cash.

Shanda’s popular titles include fantasy role-playing games World of Legend and Legend of Mir. Shanda is also looking at offering games in Europe, Li said.

Shanda rival Perfect World has already launched several games in the U.S. and offers them under altered names including Jade Dynasty and Ether Saga. Changyou late last year started open beta testing in the U.S. for Dragon Oath, a martial arts game.

Source : Konaxis

A Beijing company accused Shanda of abusing its dominate position in the online literature market, implementing monopolistic behaviors.

The plaintiff in the case is Beijing Scholar Electronic Technology Co., Ltd, operators of “Reading bar net” Scholar Electronic said in the writ, the company commissioned Kou Bin whose online nickname is known as “do not eat tomatoes” to write “Xingchenbian After”, and put series on “Reading bar net”. However, “the starting point of Chinese net” required the author to stop creation for the “Reading bar net”, and sent the letter of apology on the site.

Scholar Electronic believed that, because of the monopolistic position in the industry, Shanda ordered Kou Bin to stop creation, and subsequently claimed that the novel infringed copyrights demanding “Reading bar net” to remove the work. Therefore, the acts were alleged to abuse the market dominance position.

Scholar Electronic brought the two companies -Shanda and Yuen-ting technology- to the court, and called for an end to monopolistic practices, apology and compensation for the loss. At present, the case is still in progress. It was reported that both the plaintiff and defendant had another reputation case went to the Pudong New Area court, which was also under review.

The growth figure show that global economic chaos didi not negatively affect the Chinese online game market in 2008.

The firm projected that the market will grow to $5.5 billion in 2012.

The Pearl report said that the Chinese game operators are optimistic about the years ahead, saying the global economic downturn has had little impact on their businesses, as games are “small-ticket” items that people are still willing to buy.

The most popular online game in China is Netease’s Fantasy Westward Journey, which reached over 1.8 million peak concurrent users. Following that title is Giant?s Zhengtu Online (1.5 million users), Tencent’s Dungeon Fighter (1.2 million) and Blizzard’s World of Warcraft (1 million).

Pearl also said there are six game operators in China that have crossed the $200 million revenue mark: Tencent, Changyou, The9, Netease, Shanda and Giant.

About 70 percent of China’s 298 million Internet users are under 30 years old, Pearl said.

Pearl’s Allison Luong elaborated on the study. ?Trends to track in 2009 include the growth of social networking sites in China, with over 55 million users, and their cross-pollination with games.

“One overall concern is the lack of diversification with many game operators relying on a single title for the bulk of revenues.

“In addition, a glut of content with more than 200 games on the market, makes releasing a breakout hit increasingly difficult.?

Source : Konaxis

“Gui Chui Deng Online”, “Creation of the Gods” and “World Hegemony” are expected to commence beta testing in the first half of 2008.

“We are excited to see that Shanda has further diversified its content resources by establishing partnerships with Maishi and Lingyu following the successful acquisition of Aurora Technology in July of this year” said Tianqiao Chen, Shanda’s chairman and CEO. “In addition, the newly introduced web game once again demonstrates the strength and quality of our in-house R&D team. Looking forward, we will work hard to enrich our content through multiple channels, in an effort to constantly provide our gamers with a fun and entertaining game experience.”

Source : Chinatechnews