DT2 and Chuangshi Xiyou gaining momentum. With recent NetEase (NTES) related news headlines dominated by World of Warcraft (WoW) and MSN China, I would like to remind investors that NetEase's new 2.5D game DT2 (Da Tang Wu Shuang) has become a significant earnings contributor. According to my research, DT2's Peak Concurrent Users (PCU) have surpassed 120K since entering unlimited closed beta on April 16. I believe DT2's revenue will likely surpass $8 million in 3Q10, which has not been included in most analysts' estimates. In addition to DT2's strong performance, NetEase's 3D game "Genesis: Journey to the West (Chuangshi Xiyou)" has been well-received since entering unlimited closed beta on April 15. As DT2 and Chuangshi Xiyou continue to gain momentum, I believe Wall Street analysts will increase their 2010 earnings forecasts on NetEase, providing upside momentum for the stock.
Updates on other new games. According to my checks, NetEase's three-kingdom-themed 2.5D game Yi Sanguo has had a disappointing start: it had to merge its three server groups into one server group merely 20 days after entering unlimited closed beta on April 9. Supernatural-tales-themed 2.5D game Ghost (Qian Nv You Hun) is currently in the second internal testing stage with two server groups. I forecast Ghost will achieve similar success to DT2 in 2H10. Robots-themed TF Online is still going through its unlimited closed beta which started June 19, 2009. My research suggests this game still needs lots of improvements before it can enter open beta. Martial-arts-themed 2.5D game DTW (Datang Haoxia Waizhuan) has been very quietly going through its second technical testing since November 6, 2009. This game complements DT and DT2 to form "Datang Series", which is NetEase's major franchise in the 2.5D martial arts game category.
Disclosure: No positions