THE9 SP ADR (NQ: NCTY)
-0.1600 (-2.349%)
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6.650
88,938 in Volume
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Data as of 08:10 PM EST Feb 9,2010
(NCTY) Community Analysis from
February 10, 2010
(Stock Blog Hub, 10/9/08)
The9 is tapping China's gaming obsession for big profits. The company grew revenues 69% in the second quarter. It has surprised on...(read more)
The9 (NCTY) Company Overview
The9 is a China-based online video game operator with the exclusive license to operate and distribute World of Warcraft in mainland China. It has licensed the software from Blizzard Entertainment, owned by Vivendi (EPA: VIV), and marketed it to to China's growing middle class and internet-consuming youth.

Gaining the license to distribute pre-paid game time cards for World of Warcraft in June 2005 altered the structure and growth prospects for The9's business, and the company saw over 100% revenue growth and an increase in operating margins between 2005 and 2006, from 12.2% to 26%, due to the agreement with Vivendi Universal Games.[1] In 2008, The9 primarily licenses hugely scaled online games (Massively Multiplayer Online-games) from other developers, typically based outside of China, and handles the marketing and distribution efforts within the People's Republic of China. The company has a portfolio of over 10 titles, but 99% of the company's total revenues in 2006 came from World of Warcraft.[2] In 2008, the company acquired new licenses, including the Korean game Atlantica on April 24th, 2008[3] and most importantly, the right to distribute Blizzard's second expansion game for World of Warcraft: Wrath of the Lich King.[4]

In April of 2008, The9 announced that it had achieved peak concurrent users of World of Warcraft of over 1 million, meaning at any given time over 1 million users were logged on playing the game.[5] In Q4 of 2007, the company reported average concurrent logins of 470,000.[6] Blizzard reported that there were over 3.5 million subscribers to World of Warcraft in China in the beginning of 2007, while there were only 2 million subscribes in North America, and 1.5 million in Europe.[7]

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