Game on for Shanda with record revenue

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NEW YORK -- Chinese online game firm Shanda Interactive Entertainment Ltd. said Tuesday that its first-quarter earnings multiplied as operating expenses declined and online game revenue set a company record.

Shanda, based in Shanghai, said its first-quarter profit reached 448.8 million yuan ($58 million), up from the 11.8 million yuan recorded a year ago. The figures exceeded expectations.

Revenue jumped 55.9% year-over-year and 13.1% over the previous quarter to 532.3 million yuan ($68.8 million), beating the company's own guidance.

Online game revenue in the latest period, which ended March 31, soared 63.1% to a record 505 million yuan ($65.3 million).

Revenue from massive multiplayer online role playing games jumped 83.9% year-over-year to 414 million yuan ($53.3 million). Casual game revenue rose 7.8% thanks to new expansion packs of such games as "Maple Story," "GetAmped" and "Crazy Kart."

"Driven by online game revenues that hit a historical high, our results in the first quarter of 2007 were very strong," Shanda chairman and CEO Tianqiao Chen said. "We managed to leverage our come-stay-pay model and operating platform to launch new expansion packs for our main game titles and hold special themed promotions over the holiday period to achieve growth in (average revenue per user) and active paying accounts."

The CEO also predicted further revenue gains in the coming year.

Before the company's earnings report Tuesday, Shanda shares on the Nasdaq closed up 3% at $28.64 after going as high as $28.66 in intraday trading. That was close to the stock's 52-week high of $28.70. The shares gained in after-hours trading.

China's online gaming market is competitive but fast-growing, according to industry observers.
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