Shanda Games Q3 2012 Profit Down 26% YoY
Shanda, 11/27/12
Chinese online game developer and operator Shanda Games (Nasdaq: GAME) has announced its financial results for the three months ended September 30, 2012. Q3 2012 net revenues were RMB 1.08 bln (USD 170.4 mln), down 20.0% YoY from RMB 1.35 bln in Q3 2011 and down 4.4% QoQ from RMB 1.13 bln in Q2 2012.
Net income for the third quarter of 2012 was RMB 253.9 mln (USD 40.0 mln), a decrease of 25.9% YoY from RMB 342.6 mln in the third quarter of 2011 and down 17.7% QoQ from RMB 308.4 mln in the second quarter of 2012.
Net revenues from online games operated in China declined 20.7% YoY and 2.4% QoQ to RMB 1.01 bln (USD 160.1 mln). The sequential decrease was primarily due to a decline in revenue from 3D fantasy MMORPG Aion, as the initial attraction surrounding the launch of its 3.0 expansion pack in March 2012 subsided, and a decline in revenue from MMORPG Woool. This was partially offset by the first full quarter of revenue contribution from 3D fantasy MMORPG Age of Wushu, an increase in revenue from 3D MMORPG Dragon Nest following the launch of an expansion pack in August, and positive seasonal effects on games during the third quarter of 2012.
Other revenues, which primarily represent net overseas revenues generated from game licensing, game operations, and advertising, were RMB 65.4 mln (USD 10.3 mln) in the third quarter of 2012, down 10.2% YoY from RMB 72.1 mln in the third quarter of 2011 and down 20.0% QoQ RMB 90.1 mln in the second quarter of 2012. The QoQ decrease in other revenues was primarily due to a decrease in advertising revenues related to cross-marketing activities in China during the third quarter of 2012.
Average Monthly Active Users (average MAUs) for all games operated in China increased 6.2% QoQ to 18.4 mln, mainly due to the release of content updates for certain major games during Q3 2012.
Average Monthly Paying Users (average MPUs) for all games operated in China decreased 7.9% QoQ to 3.5 mln. The sequential decrease was mainly due to the content updates released for major games, which introduced a number of free functions and game play to users, resulting in a decline in low-spending paying accounts in Q3 2012.
Monthly Average Revenue per Paying User (ARPU) for all games operated in China increased 6.0% QoQ to RMB 95.7.
Business Highlights:
August 30, 2012 - Shanda Games began unlimited closed-beta testing for browser game of Woool of Paladin (Hanjiang Chuanshi), an in-house developed fantasy web game based on the Company's Woool franchise.
August 31, 2012 - NHN Korea began a second round of closed-beta testing for 3D cartoon-style MMORPG Dungeon Striker, an action MMORPG developed by Eyedentity Games, a Korea-based game studio under Shanda Games.
September 14, 2012 - Shanda Games' board of directors approved to adjust the exercise price for the share options held by the officers and employees of the Company and its subsidiaries and operating companies in China. The new exercise price for these options is USD 1.835 per Class A ordinary share, representing the average closing price of the Company's ADSs during the 15 consecutive trading days prior to September 14, 2012 divided by two.
September 25, 2012 - Mail.Ru Group, a leading internet company in Russia, began commercial operation of Shanda Games' 3D MMORPG Dragon Nest in Russia.
October 7, 2012 - Eyedentity Games signed a publishing agreement for Dungeon Striker with NHN Japan, a leading Japanese online game company. Pursuant to the agreement, NHN Japan will be the exclusive operator of Dungeon Striker in Japan.
October 16, 2012 - Shanda Games and Square Enix, a leading game developer based in Japan, announced a mobile game partnership under which the two companies will share their resources and expertise in developing and operating mobile games. The partnership includes joint development for the mobile versions of Final Fantasy I, Final Fantasy II, Final Fantasy III and Diffusion Million Arthur for distribution in China, Taiwan, Korea, and Southeast Asia.
October 16, 2012 - Eyedentity Games announced its first mobile game Dragon Nest: Labyrinth, which is based on the popular PC-based MMORPG, Dragon Nest.
October 23, 2012 - Shanda Games began the first round of closed-beta testing in Mainland China for Trion World-licensed 3D MMORPG RIFT.
In June 2012, the Company's Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to USD 100 mln worth of its outstanding ADSs during the next twelve months. As of November 23, 2012, the Company has repurchased approximately 10.9 mln ADSs for an aggregate consideration of USD 40 mln.
To view the complete report please see here.
Keywords: Dragon Nest: Labyrinth Shanda Games Internet profit Q3 2012 mobile gaming online gaming fiscal report GAME
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