Giant Q3 2012 Profit Down 14% YoY
Giant, 11/14/12
Chinese online game developer and operator Giant Interactive (NYSE: GA) has announced its financial results for the three months ended September 30, 2012. Q3 2012 revenue was RMB 543.2 mln (USD 86.4 mln), representing a 2.8% increase QoQ from RMB 528.2 mln in Q2 2012, and an 18.6% increase YoY from RMB 457.9 mln in Q3 2011.
Net income attributable to shareholders was RMB 311.7 mln (USD 49.6 mln), representing a 1.4% increase QoQ from RMB 307.2 mln in Q2 2012, but a 13.7% decrease YoY from RMB 361.3 mln in Q3 2011.
Revenue from online games in the third quarter 2012 totaled RMB 523.8 mln (USD 83.3mln), representing a 3.5% increase QoQ from RMB 505.9 mln in Q2 2012, and an 18.0% increase YoY from RMB 443.9 mln in Q3 2011. The increases were mainly due to the growth of the company's self developed MMORPG franchise ZT Online.
APA for online games in the third quarter 2012 was 2,241,000, representing a 1.1% sequential increase and a 7.4% increase over the third quarter 2011. The sequential and year-over-year increases in APA were mainly due to an increase in ZT Online 2 users. ARPU for online games in the third quarter 2012 was RMB 238, representing a 2.4% sequential increase and a 9.6% increase over the third quarter 2011. The slight sequential and year-over-year increases in ARPU were due to ZT Online 2 users spending more as they progress through the game. ACU for online games in the third quarter 2012 was 694,000, representing a 1.3% sequential increase and a 4.9% increase over the third quarter 2011. PCU for online games in the third quarter 2012 was 2,328,000, representing a 0.9% sequential increase and a 1.4% increase over the third quarter 2011. The slight sequential and year-over-year increases in ACU and PCU were mainly due to the continual popularity of the ZT Online franchise.
Existing Games:
ZT Online 1 Series - During the third quarter 2012, the company held several ZT Online PK tournaments and introduced new gameplay designed to encourage interaction among gamers, both of which received positive feedback from gamers. The company also plans to launch an expansion pack for ZT Online in the first quarter 2013. In addition, the company released a selection of new ZT Online Classic Edition gameplay centered on farming and guild functions and, for the ZT Online Green Edition, optimized the pet raising and equipment upgrading systems.
ZT Online 2 - In August, the company launched the first part of a new ZT Online 2 expansion pack to attract gamers during the summer holiday. The first part of the expansion pack included new in-game activities and gameplay that were well received by gamers. During the fourth quarter, the company will release the second part of the much anticipated expansion pack, which includes two new professions and additional in-game activities. The micro-client version of ZT Online 2 has gained positive momentum since the beginning of its testing on Chinese Internet services and security software provider Qihoo 360 (NYSE: QIHU)'s platform in September. The company plans to add additional servers for the micro-client version during the fourth quarter 2012.
Elsword - In third quarter 2012, the company released a new expansion pack for 3D MMORPG Elsword during the summer holiday that was directed towards younger gamers and increased user activity for the game. In the fourth quarter 2012, the company plans to introduce another expansion pack to commemorate the first anniversary of the game's commercial launch in order to further boost momentum.
Allods Online - 3D MMORPG Allods Online began its closed beta testing on August 30, 2012 and its performance has met with the company's expectations. Its 3D western-style fantasy and science fiction theme has also helped attract a more diverse user base. The company expects to launch its first expansion pack in the fourth quarter 2012.
Pipeline Games:
World of Xianxia - World of Xianxia is a self-developed 3D Chinese fantasy-style MMORPG with an ancient Chinese mythological theme. The game allows users to compete against each other as part of small groups. In September 2012, the company conducted the second round of engineering testing with limited accounts. The testing results have been positive, demonstrating the high quality of the game and its ability to continuously attract and engage gamers. The development team is currently working to improve new gamers' experience based on user feedback and add additional content to the game. The company plans to begin unlimited closed beta testing in the fourth quarter 2012, supported by large scale marketing campaigns in March or April 2013.
Webgames - Genesis of the Empire is an action role playing game (ARPG) based on the Three Kingdoms period of ancient Chinese history. The Sky is an ARPG incorporating core gameplay mechanics from the ZT Online series. The company conducted engineering testing for both games in the third quarter 2012 and expects to commercially launch the games in the first quarter2013.
Glorious Mission - Glorious Mission is the company's first self-developed first person shooter (FPS) game and is currently the only game in the world that is playable from the perspective of China's military, the People's Liberation Army (PLA). During the third quarter 2012, the company released an upgraded single-player campaign version of the game based on the version the company delivered to the PLA in June 2011, which has attracted over one mln downloads. The development team is working on the online version and the company is targeting the first quarter 2013 for an engineering testing.
The company expects sequential growth to be higher in the fourth quarter 2012 when compared to the third quarter 2012 due to contributions from multiple new games.
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Keywords: FPS Giant Giant Interactive ZT Online 2012 ARPU closed beta content Internet pipeline profit revenue software users MMORPG GA ACU APA PCU expansion pack Allods Elsword Classic Edition ZT Online Classic Glorious Mission World of XianXia downloads Genesis of the Empire The Sky Q3 2012 online gaming reduction fiscal report ZT Online II self-developed game 3D game
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