The9 Limited Reports First and Second Quarter 2010 Unaudited Financial Results

TAGs: online game developer, online game operator, The9 limited

SHANGHAI, China, Aug. 24 /PRNewswire-Asia-FirstCall/ — The9 Limited (NASDAQ:NCTY) (“The9”), an online game operator and developer in China, announced today its unaudited financial results for the quarters ended March 31 and June 30, 2010.

Financial Highlights:

  • First Quarter 2010– Net revenues for the first quarter of 2010 increased by 6% quarter- over-quarter but decreased by 95% year-over-year to RMB22.1 million (US$3.3 million).– Net loss for the first quarter of 2010 decreased by 63% quarter-over-quarter but increased by 62% year-over-year to RMB75.8 million (US$11.2million).
  • Second Quarter 2010– Net revenues for the second quarter of 2010 increased by 15% quarter-over-quarter but decreased by 91% year-over-year to RMB25.4 million (US$3.7 million).– Net loss for the second quarter of 2010 decreased by 13% quarter-over-quarter and decreased by 17% year-over-year to RMB65.8 million (US$9.7 million).

The decrease in year-over-year net revenues in both quarters was mainly due to the decrease in revenue from World of Warcraft (“WoW”), for which the license agreement expired on June 7, 2009.

Business Highlights:

  • In January 2010, The9 launched its first proprietary 2D MMORPG, World of Fighter, which has been well received by China domestic game players and licensed to Hong Kong, Macau, Taiwan, Korea, Vietnam and Thailand.
  • In April 2010, The9 acquired a majority interest in Red 5 Studios, Inc., an online game studio based in Los Angeles.
  • In June 2010, The9 set up The9 Interactive, Inc., a wholly owned subsidiary based in San Jose, to focus on operating our proprietary games in the U.S. and searching for overseas business opportunity.
  • In June 2010, The9 and Sony Online Entertainment entered into an agreement pursuant to which The9 obtained an exclusive license to operate Free Realms, a 3D cartoon fairy massively multiplayer online role-playing game in mainland China.
  • In July 2010, The9 made a strategic minority equity investment in Aurora Feint Inc, a San Francisco-based company that develops mobile games and operates OpenFeint, a leading mobile social platform for iphones and smart phones. Thousands of mobile game developers use OpenFeint and there are more than 28 million registered users and 2,200 games live in the Apple App Store.

Management Comments:

Commenting on the first half 2010 results, Jun Zhu, Chairman and Chief Executive Officer of The9 said,
The first half 2010 has been a meaningful and important period to The9. We took this opportunity to restructure and reposition The9. We now have a very clear direction to our future business model in the global internet market. Our global strategy includes three core tactics. First of all, we view our internet business from a global perspective, for example, by investing in US-based companies to enter into the global market; secondly, regarding the domestic online game market, we will further expand by various means including proprietary development, cooperation, licensing etc.; thirdly, we will step into different sections in the global internet market in respondent to new changes in the market, including mobile internet. Although today The9 is still making a loss, we firmly believe that as long as we implement our global internet strategy and be innovative to changes in internet market, we will pass through the transition period and our financial results will be improved.”

About The9 Limited the9 unlimited

The9 Limited is an online game operator and developer in China. The9’s business is primarily focused on developing and operating high-quality games for online game market. The9 directly, or through affiliates, operates licensed MMORPGs and advanced casual games including Soul of TheĀ  Ultimate Nation(TM), Granado Espada, EA SPORTS(TM) FIFA Online 2, Atlantica and Kingdom Heroes 2 Online, as well as its proprietary games World of Fighter, Jiu Zhou Zhan Ji and Winning Goal, in mainland China. It has also obtained exclusive licenses to operate other games in mainland China, including Free Realms, Audition 2 and others. In addition, The9 is developing various proprietary games, including Shen Xian Zhuan and other MMORPGs and advanced causal games.

For further information, please contact:

Ms. Phyllis Sai
Manager, Investor Relations
The9 Limited
Tel: +86-21-5172-9990


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