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Top online game companies suffer drop in Q2 income

By Ji Beibei (Global Times)

10:53, August 31, 2012

The total income of China's six leading online game developers suffered negative growth for the first time since 2009 in the second quarter this year, and analysts said Thursday it signaled a period of transition and that the companies will need to adjust to meet the challenge.

"One of the reasons for the poor performance is that the second quarter is traditionally a weak season for the game industry, and few companies promote their products," Sun Mengzi, a tech analyst at Analysys International, told the Global Times Thursday.

"But the performance also mirrors the sector, which has stopped growing quickly and entered a transition period. Companies may see their market ranking changed and more diversified products will be offered," said Sun.

The six companies are Tencent Holding Ltd, Shanda Games Ltd, Beijing Perfect World Network Technology Co, Giant Interactive Group Inc, ChangYou.com Ltd and NetEase Inc. These developers together have a share of some 80 percent of the online game market, Sina Tech reported Wednesday.

All the developers unveiled their Q2 financial reports by Tuesday and half of them saw their revenues falling compared with the previous quarter. The poor results signaled a dangerous time ahead for the sector, the report said.

Perfect World's revenue registered a quarter-on-quarter decline of 5.9 percent while Shanda Games's transaction revenue dropped 18.6 percent compared with the first quarter, according to their financial reports.

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