NetEase (NTES) management pressed on the impact of NCTY's WoW (1Q05 conf call quotes)

Includes: NCTY, NTES
by: Ezra Marbach

NetEase (ticker: NTES) reported Q1 2005 results on Tuesday. Here are key quotes attributed to Acting CEO Ted Sun, COO Michael Tong, and CFO Denny Lee from NetEase's Q1 earnings results conference call:

On where wireless revenue growth will come from

Acting CEO Ted Sun:

….we’re expecting a main growth will come from W-A-P.....

On The9's (ticker: NCTY) World of Warcraft (WoW)

COO Michael Tong:

…..the Chinese culture of the game….the hardware configuration and requirements for WoW -- seem to be still some of the problem for World of Warcraft.

....How this is going to affect our games.… I think both games will probably be the least games affected in the market, mainly because those are Chinese traditional games and they are 2-D games with much lower hardware requirements.

On the Q2 impact of WoW and Shanda's (ticker: SNDA) Magical Land

CFO Denny Lee:

....For the open beta of the two games of World of Warcraft and Magical Land, the assumption is that we might actually experience slower growth for May and also June during the open beta of these two games for Fantasy Westward Journey and Westward Journey Online II -- slower growth compared to that of Q1.

On NetEase game Fly for Fun

COO Michael Tong:

....For Fly for Fun, the peak concurrent users right now are around 23,000 during this open beta. Obviously, it’s a very small number and it’s lower than our own expectations. I think we will at least need to have 50,000 peak use if we are going to commercially launch the game.

(Quotes are from the CCBN StreetEvents transcript.)