davidinchina

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    • Tue Apr 10th 09:25 AM | Rating: 0 0
      Commented on:
      Webzen: Undervalued Asian Name?
      The $US35m you mention for Huxley is not an upfront payment, most of it is guaranteed royalty payments that are payable if the game reaches certain milestones after launching such as a certain level of users. Like most games that The9 licenses the money payable upfront is not much at all but $US35m is a good headline for both parties.

      I don't think it is even scheduled to launch in Korea until 2008 so it won't be in China until after that.
      View article »
    • Fri Mar 30th 06:39 AM | Rating: 0 0
      Commented on:
      Ten Steps Microsoft Should Take To Jumpstart Vista
      11. Make sure your product is actually ready before releasing it. I just bought a Thinkpad with Vista in Hong Kong and within a week had had it downgraded to Win XP. There have been so many complaints here about Vista that a number of dealers have got permission from Microsoft to downgrade to Win XP, and then they give you Vista recovery disks so that you can try upgrading back to Vista at some point in the future when its ready.

      12. Don't make annoying, seemingly pointless changes just so it looks different from XP - such as renaming common tasks in the Control Panel and changing the file directory structure. This means that it takes your users much longer to get used to Vista.
      View article »
    • Sat Jan 6th 21:23 PM | Rating: 0 0
      Commented on:
      China's Volatile Gaming Industry
      Stephen,

      I have been involved in the Chinese games industry for a number of years and talk regularly to senior executives from many of these companies, including Shanda.

      Paul,

      I agree that overall the games market in China will continue to grow quickly. The point is that the fortunes of the early leaders - Shanda, Netease and The9 - will remain volatile as new competitors and new games enter the market, and games based on the "play for free, pay for items" model gain traction.
      View article »
    • Wed Jan 3rd 23:43 PM | Rating: 0 0
      Commented on:
      Investing In China's Online Gaming Sector
      Shaun,

      You bring up some good points. Having been actively involved in the Chinese games industry I would like to add some further comments.

      1. In addition to the major players you mention other publicly listed companies that deserve a mention are Tencent, the leader in the casual games space with its QQ Game platform, and CDC Games, who have been quite successful operating "Yulgang" through their 17game subsidiary. They also recently announced that they have licensed the MMOG, "Lord of the Rings" (LOTR), which should launch in China later in 2007 or early 2008.

      2. One of the reasons why the western publishers such as EA struggle in China is that due to regulatory issues they can't directly publish online games so they need to work with a local partner. Korean companies such as NC Soft who have licensed numerous games to Chinese companies are worth looking at. The game consoles (Xbox, PS3 etc) has too many issues at this point (regulatory, piracy, business model) so the market will continue to be PC-game dominated for the forseeable future.

      3. A big issue for the Chinese games industry is the shortage of quality game developers, especially game designers, and low level of game developer education. While Netease has been successful at developing their own 2D/ 2.5D titles no Chinese conmpany has managed to develop a quality 3D title. Imitation still rules over innovation with many copycat games being developed.

      4. I would expect all of the Chinese game companies, including Netease, to license foreign titles in the future. This is partly due to the poor state of the local game development industry as mentioned above, and also because WoW has shown that a lot of money can be made from licensing a blockbuster title even if royalties have to be paid out to a foreign party. Due to the risk averse nature of many of these companies they will try to secure western titles that have reached open beta testing or have already launched in the west, or are being developed by famous developers who already have a track record. While this lowers their risk it also means that they will likely have to pay higher licensing and royalties for these titles.

      5. Expect to see more games operated on a "play for free, pay for items" model compared to the traditional subscription model. The Korean games industry has already moved in this direction and Shanda and CDC Games/ 17game have shown that it is a viable model in China.

      As you mention it is likely that all of these stocks will remain voltile due to the nature of the games business. Netease has some strong positives including their management team and past success at game development, however a big test for them will be whether their upcoming 3D title, Tianxia II, is a commercial success. If not then they don't have much else in the pipeline and licensing will become a priority.

      The9 has had a good run with WoW and has licensed numerous upcoming titles but it is not obvious to me how a company that has essentially been operating one game could expect to be successfully operating up to six games within the next 18-24 months. I suspect that their strategy has more to do with "locking up" as many of these titles as possible - Granada Espada was originally meant to launch at the end of 2004 but still hasn't - by paying a small upfront fee and then only paying the bulk of the licensing fees when/ if they actually launch the game. While this may suit The9 it isn't good for their licensing partners and so I don't see them being the "Chinese partner of choice" for foreign companies as some have stated.

      Shanda will likely remain very volatile. Their strategy of licensing 2nd tier titles and using their core competencies e.g. card distribution and marketing ability to promote them aggressively, has not been successful recently. Their inhouse game development efforts have been poor and it is doubtful whether Dungeons & Dragons will even launch commercially as initial feedback has not been good and the game, in my opinion, is not well suited for Chinese gamers. However if they license some good titles and abandon their misguided "Shanda box" strategy then they could perform well. BTW, the game you mentioned is called "Archlord", not "Overlord Land".

      Disclosure: I don't own any of these stocks but do have business dealings with some of these companies.
      View article »
    • Fri Jul 14th 22:47 PM | Rating: 0 0
      Commented on:
      Will Competition Save WVAS Providers in China?
      David,

      I am not convinced that the arrival of 3G will make much difference to the current gloomy situation that WVAS providers face. China Mobile will continue to dominate the mobile landscape unless, in an unlikely scenario, they get lumped with a TD-SCDMA license. Whoever gets a TD-SCDMA license is unlikely to be a serious contender in the 3G landscape due to it being a technology that clearly has problems, a lack of economies of scale for handsets and network equipment and the fact that Nokia, Motorola and Samsung etc are not likely to develop leading edge or stylish handsets based on this standard. It will be left to China's numerous handset design houses to come up with mediocre "me too" TD-SCDMA phones.

      All of the mobile operators in the new 3G world will continue to be Chinese SOEs and deep down their mentality is "why let someone else make money if we can make it ourselves?" There are many examples of Chinese SOEs working with partners but once they understand the business/ technology then they try to do it themselves. This is what is happening with the independent WVASs now - China Mobile needed them while it couldn't provide the services themselves. Now, as they think they can do more themselves, they will make life harder for the WVASs and eventually try to kick them out altogether or maybe keep a handful of subservient partners.

      Is it likely that China Mobile can provide better content compared to the independent MVAS providers? Probably not. Does it matter? No. When you are a monopoly/ duopoly it doesn't really matter whether the consumer gets the best content or service.

      The fact is that the MVASs don't have the ability to create distinctive, compelling content and it will be easy enough for China Mobile to deal directly with the MTVs, Viacoms, News Corps, SMGs and CCTVs of the world, especially if mobile TV does become a killer app.
      View article »
    • Sun Jan 22nd 19:47 PM | Rating: 0 0
      Commented on:
      BusinessWeek Recommends PacificNet (PACT)
      Its hard to know what these guys are really up to as they seem to be investing in a diverse range of businesses. Based on my own experience of dealing with Chinese telcos it can be very hard getting paid on time and generally avoid getting screwed. They are monopolies and think that they can do what they want. If PacificNet were to be positioned as a systems integrator to the telcos then look at the fates of AsiaInfo and UT Starcom.
      View article »
    • Tue Dec 13th 01:46 AM | Rating: 0 0
      Commented on:
      China Book Giveaway: Winners and China Stock Recommendations (CNTF, SVA, SINA, ADIY, FMCN)
      Something to improve - with your new format it is hard to see what postings have attracted comments. Postings that have comments are likely to attract more comments, especially if there are a number of postings related to a similar topic.
      View article »
    • Thu Nov 17th 11:45 AM | Rating: 0 0
      Commented on:
      China Techfaith Wireless Beats By $0.04; Guides Above Consensus; Stock Up 12% in After-Hours Trading (CNTF 3Q05 Earnings)
      I was talking to an ex-Motorola person in Beijing recently, he made an offhand comment that CNTF had taken a lot of Motorola employees and that they had designed a crappy phone for Motorola. It didn't sound like Motorola will use them anytime soon.
      View article »
    • Wed Nov 9th 12:54 PM | Rating: 0 0
      Commented on:
      Sohu on Being Official Internet Content Sponsor for the Beijing 2008 Olympic Games (SOHU 3Q05 Conf Call Quotes)
      It also gives Charles Zhang the chance to mix with famous athletes and stars, which is something he likes doing.

      BTW, Bokoff is actually BOCOG (Beijing Organizing Committe Olympic Games). It will have cost them a lot to secure the deal but they should be able to find a way to make money out of it as Chinese advertisers are going crazy on Olympic-related advertising in the runup to 2008.
      View article »
    • Wed Nov 9th 06:08 AM | Rating: 0 0
      Commented on:
      We're Giving Away 5 Copies of "An Introduction to Project Finance" by Andrew Fight
      Sounds good!
      View article »
    • Mon Oct 3rd 03:29 AM | Rating: 0 0
      Commented on:
      Investor Assesses China Techfaith Wireless' Weak Stock Performance (CNTF)
      I think that there is probably more competition in this industry than CNTF care to admit. What do people know about Cellon? cellon.com They are backed by Intel and Softbank amongst others and are in a very similar business to CNTF, I understand that they had a very rough Q1 but are picking up new business again. If you rely on a handful of customers in this business then losing one or two could be very detrimental.
      View article »
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