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Renren reportedly set to cut back on gaming efforts

  • Marbridge Consulting reports Renren (RENN +1.2%) CEO Joe Chen stated in an internal e-mail his company will narrow its gaming efforts in order to focus on its social networking ops.
  • Gaming-related weakness (blamed on game launch delays) led Renren to issue a Q2 warning in July, and provide weak Q3 guidance in August. The company's gaming ops, which face tough competition from Tencent, NetEase, Shanda, Qihoo, and many other Chinese game providers, totaled $22.4M in Q2, up 1.4% Y/Y and equal to 45% of total revenue.
  • Renren's social networking ops face have their own challenges: The company's ad revenue only rose 2.4% Y/Y in Q2 to $15.4M, as Chinese Web/mobile users embrace rival social networking platforms such as Tencent's WeChat and Sina's Weibo.
  • Q3 results are due this month.
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