Game demand injects Shanda's big Q3
EmptyChinese online gaming company Shanda Interactive Entertainment said Wednesday that its third-quarter profit rose 66%, boosted by strong demand for its games.
Shanghai-based Shanda's games include "The Legend of Mir II" and "Woool." Analysts expect expansion packs for these and newer games to help boost revenue again in the fourth quarter.
China's fast-growing and highly competitive online gaming industry is in the midst of adopting a free-to-play model that charges users money only for such features as weapons and accessories chosen to enhance the play of their favorite games.
Shanda's third-quarter revenue was 656.3 million yuan ($87.4 million), up 50.3% from a year ago.
Third-quarter profit of 238.9 million yuan ($31.8 million) beat previous Wall Street forecasts of about $30.3 million. Marketing expenses doubled from a year ago to 60.7 million yuan ($8.2 million).
Shanda also named Grace Wu as CFO, moving up from her post as vp strategic investments and replacing former CFO Daniel Zhang, who resigned in August. Zhang remains on Shanda's board.
China's gaming market is forecast to grow 35% to $1.3 billion this year, according to Credit Suisse, amid strong growth in Internet users, the introduction of higher-quality games and the appreciation of China's yuan.
Shanda, with a 19.3% market share, is followed closely by rival Netease.com with 17.1%, research firm Analysys International said.
Other Chinese competitors include Nasdaq-listed The9, Hong Kong-listed Tencent, Nasdaq-listed Sohu.com and the recently NYSE-listed Giant Interactive Group.
China has about 37.5 million people, mostly young males, who play at least one online game a month.
Reuters contributed to this report.