CDC Games inks 'Yulgang' deal

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HONG KONG � Hong Kong-based CDC Games announced Friday a strategic investment in MGame, the South Korean developer whose hit game "Yulgang" has operated in China since 2004.

In a signing ceremony on the last day of the Hong Kong Filmart, the two companies also extended the operation agreement for the "free to play, pay for merchandise" game until 2010, and agreed that CDC, an online gaming unit of CDC Corp., would take exclusive rights to distribute MGame's next massive multiplayer online role playing game (MMORPG).��

"Yulgang," a martial arts fighting game featuring flying monsters and lots of swordplay, earned in excess of $40 million in 2006 and had 46.5 million users in China, according to John Lee, president of CDC Games.

"We believe this is the first step between promoting and improving the relations between the China and Korea interactive gaming market," said Lee.

Lee said that MGame's technology was strong enough to stop hackers from pirating "Yulgang" in China, where online piracy is widespread.� "We've had almost no issue with this at all," he said.

The amount of CDC's strategic investment was not disclosed, but makes the company the largest non-Korean shareholder in MGame, and comes as a part of a larger, previously announced $100 million initiative to develop games from around the world for the Chinese market.

Fred Wang, CDC Games chairman and the president of Hong Kong based motion picture company Salon Films, said the extended partnership with MGame made sense for Hong Kong.

"Movies, animation and gaming are all coming closer together. We all know that the U.S. gaming market's income is bigger than its boxoffice, so we can see the future," Wang said. "We believe Korean companies have lots of know-how and a good Asian culture. They can help very fast development of technology here."

"Wind Fire Forest Mountain," MGame's next MMORPG, is designed to look like an animated motion picture and appeal to a pan-Asian audience with its mix of characters whose names are alternately Japanese, Chinese or Korean-sounding.

Founded in 1996, MGame has over 50 different games serviced from the company's web site and has 19 million registered users. The company has five internal game developing studios employing more than 750 employees in South Korea, and has offices in China, the United States and Japan.
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