The9 Discusses World of Warcraft, its Game Pipeline, and PC Trends in China (NCTY 2Q05 Conf Call)

Aug.25.05 | About: The9 Limited (NCTY)

The9 (ticker: NCTY) reported Q2 2005 earnings results yesterday. Key points from management's earnings results conference call:

On World of Warcraft (WoW)

  • Reached 1.5 million paying customers after a month.
  • Now has 2.0+ million paid users.
  • 450,000 PCUs and 260,000 ACUs.
  • ARPU around RMB 0.36 ($0.04).
  • Expect to open 5th server site in September.
  • WoW appealing to gamers across all demographics -- even new gamers.
  • Content pack likely in September or October 2005.

On the WoW Effect

  • WoW start of a trend toward embrace of 3D games.

On Games in Pipeline

  • Joyful Journey West -- 2D game for casual gamers -- in-house developed game -- in open beta.
  • ZhiZhun -- 3D martial arts game.
  • GE -- 3D MMORPG -- Users can control 3 characters at the same time.

On Joyful Journey West

  • Commercial launch yet to be determined -- likely in Q4.
  • Been developing game for 2 years.
  • Proprietary game.

On Strategy

  • Will target different demographic groups through MMORPG, casual games etc.

On PC Environment

  • Noticing that more players are located in wealthier areas and especially in 1st tier cities.
  • Internet cafes are increasingly upgrading PCs in order to support WoW.

On R&D Costs

  • Not expected to increase substantially in the course of the year.

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