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NetEase Profits Slip 20% QoQ

June 11, 2010 By: vio Category: Games, News, Report

NetEase (Nasdaq:NTES) recorded net income of RMB 452.26 million the first quarter of 2010, down from RMB 571.77 million in the prior quarter and up against RMB 416.72 million in the first quarter of 2009, the company reported May 19. Diluted earnings per American depository share (ADS) came to RMB 3.47. During the period, NetEase recognized revenues of RMB 1.19 billion, compared with RMB 1.29 billion and RMB 781.7 million in the preceding and year-ago quarters, respectively. Of the total, the company’s online games business generated RMB 1.085 billion in the quarter, compared with RMB1.089 billion in the previous quarter and RMB 724.02 million in the first quarter of 2009, while advertising revenues halved to RMB 91.55 million from RMB 183.68 million in the previous quarter but having doubled compared against RMB 41.03 million in the first three months of 2009. The company reported a foreign exchange loss of RMB 39.5 million in the quarter.

NetEase said it plans to launch an expansion of its 2.5D martial arts MMORPG Heroes of Tang Dynasty in the fourth quarter of 2010, as well as expansions for Westward Journey II and III in the third quarter. The company said its application to release the second expansion of World of Warcraft, “Wrath of the Lich King” (WLK) is still under regulatory review.

NetEase Still Waiting on “WLK” Sanction

April 22, 2010 By: vio Category: Games, News

NetEase (Nasdaq:NTES) has denied recent industry rumors that Wrath of the Lich King (“WLK”), the second expansion of its licensed 3D MMORPG World of Warcraft, has been rejected by the General Administration of Press and Publication of China (GAPP), duowan.com reported April 20 citing a company public relations officer.

NetEase has submitted the game for review and received no negative feedback from the GAPP to date, company PR said, according to the report.

The GAPP said in March that its Shanghai branch was reviewing “WLK” but did not disclose any timeline for its approval.

The9 Reports RMB 409m Loss in 2009

April 20, 2010 By: vio Category: Games, News, Report

The9 (Nasdaq:NCTY) recorded a net loss of RMB 409.93 million in 2009, compared with net profit of RMB 96.18 million in 2008, according to its annual report filed with the US Securities and Exchange Commission on April 19.

Company revenue slumped 55.56% year-on-year to RMB 802.63 million in 2009, mainly due to the loss of the operating license for 3D MMORPG World of Warcraft (WoW). Revenue contributed from online game operations shrank to RMB 795.48 million in 2009, down from RMB 1.8 billion in the previous year.

The company currently has one game in development, one ready for testing and another that has finished testing, according to the report.

The9′s President To Be Replaced By CEO In Mid-May

March 23, 2010 By: vio Category: Games, News

The9 (Nasdaq:NCTY) announced March 19 that its employment contract with President Xiaowei Chen will be expired on May 16 and not extended due to personal development reasons and The9′s Chairman and CEO Zhu Jun will be acting President since theday, reports Sina. Rumors about Xiaowei Chen’s resignation started April, 2009 when The9 lost the World of Wartcraft license to NetEase (Nasdaq:NTES) and rumor last June said that she has renewed her contract with The9 for another two years.
Former president of CDC Corporation (Nasdaq: CHINA) subsidiaries CDC Games and China.com (8006.HK) joined The9 on May 16, 2008.

Rob Pardo speaks about Blizzard game design

March 15, 2010 By: vio Category: Games, News

The tenth annual Game Developers Conference is in full swing in San Francisco, CA — and yesterday included a panel by Rob Pardo, Executive Vice President of Game Design at Blizzard Entertainment. Pardo spoke about design philosophy and how Blizzard approaches it, sharing not only Blizzard’s success stories, but where they failed along the way, and what they did to fix it. Blizzard’s design philosophy follows some key elements:

Gameplay First: Before anything else, you want to concentrate the game on the fun. All aspects of the game — the design, the mechanics of encounters, the quests and story are focused on making the game fun to play. Not only fun to play — but fun to play for players, not developers. The challenge is to keep players jumping through the correct hoops, while making those hoops fun. Sometimes this involves making some changes — for example, only night elf males could be druids in Warcraft III, but for the sake of making the druid class, something that sounded like all kinds of fun, they had to be made accessible to both genders, and both sides. So the lore was adjusted so that females and tauren could both be druids — otherwise they couldn’t have introduced the class at all. And that wouldn’t be any fun.

pardo easytolearndifficultt Rob Pardo speaks about Blizzard game design

Easy to Learn, Difficult to Master: The concept here is to keep game play simple in terms of mechanics and objectives, but design the game in a way that the challenges scale with the ability of play. Pardo stated that Blizzard is focusing more on designing for multiplayer games first now, rather than single player, so they design for the multiplayer aspects, giving games a lot of depth so that players won’t get bored with it. He also said that WoW is a pretty hardcore game, but the key is that it’s accessible to a lot more gamers — endgame content like raiding and arenas are a lot more hardcore than leveling itself.

He cited the Diablo II death penalty as a failure in this aspect — the death penalty was simply ‘you die, you lose half your gold’, but this was easily circumvented by dropping your gold off in town and not accessing it unless you wanted to buy something, which inflated the economy to the point that gold was meaningless, leading to players bartering and trading items rather than just using gold. They took those failures into account with WoW, not only designing the death penalty as a ‘tax’ of sorts where you’d have to pay to repair your gear, but by introducing money sinks that would make you want to spend your hard-earned gold like fancy mounts. The auction house was developed so that the player economy would revolve around gold, rather than simple bartering.
pardo whatisthefantasy Rob Pardo speaks about Blizzard game design

What is the Fantasy? In other words, what should the game look like — Pardo talked a little bit about the UI system, and how they intended for it to be simple to use and intuitive. He said the UI system was something that he considered a failure — not because it was bad necessarily. But from a development standpoint, if the majority of your player base is using addons to modify the existing UI, that’s a clue that something wasn’t quite right with the way the UI was originally designed.

pardo makeeverythingoverpow Rob Pardo speaks about Blizzard game design

Make Everything Overpowered: Every unit, every class should feel unstoppable, overpowered and epic — because it’s just more fun that way. Pardo told a short story about Designer Island, an area that used to exist in game for designers to play with landscapes and NPCs. He said he was given two abilities on his bar that you don’t see in game – a grow button, and a shrink button that would either grow or shrink the target by 10%. After bringing in Nefarian, he said he must have hit the grow button about twenty times before he finally stopped and said “That’s the size we want him.” Afterward he noted “I don’t even know why they gave me the shrink spell, I’ve never used it to this day!”

pardo concentratedcoolness Rob Pardo speaks about Blizzard game design

Concentrated Coolness: Less is more when ‘less’ is concentrated into one simple, overpowered and fun class to play. Rather than having 27 different classes in WoW, they took the best elements from units in Warcraft III (Thunderclap from the Mountain King, Critical Strikes from the Blademaster, Shockwave from the Tauren Chieftain) and combined those into one ‘super-concentrated cool class’ with many fun abilities — the warrior. Other classes were approached with this ‘concentrating’ concept in mind.

The interesting part was that he cited vehicles in Wrath as a failure — he said it was a fantastic concept originally designed for Wintergrasp only, but the concept was so cool that the designers went overboard with it. Soon they had quests, zones, and even instances that revolved around the concept of vehicular combat, and it caused the vehicle system to lose the wow factor that made it so unique and entertaining in the first place.

pardo playdonttell Rob Pardo speaks about Blizzard game design

Play, Don’t Tell: Players should be playing as much of the story as possible, and text, voiceovers and movies should be used to enhance the story as it moves along. He cited the death knight starting area as a success, the introduction of phasing allowing the zone itself to change around the player as the story was played out, with players having a very ‘real’ impact on the world around them. What was interesting was that he spoke about the tendency of players to simply skip over or skim quest text. He asks quest designers, “If you make a quest, and players don’t read any of the quest text, would they have a basic understanding of the storyline?” and tells them to keep that in mind, adding quest text after the quest has been developed. Quest text shouldn’t be necessary to understand the story — it should be there to enhance the story that’s already obviously playing out.

pardo makeitabonus Rob Pardo speaks about Blizzard game design

Make it a Bonus: Players respond better to incentives than to punishment. That’s a no-brainer, but Pardo had a couple of funny stories from the WoW beta to back it up. He said that originally the Rest System in WoW worked like this: You started out gaining 100% xp, but the longer you played, the more that percentage dropped, eventually falling to 50%. This was to discourage players from playing more than a few hours at a time. Beta players hated this system — so Pardo changed it by doubling the amount of xp required to reach maximum level in the game, starting players out with 200% xp gained, and slowly dropping it to 100% xp as they played. Same effect, same numbers, the only difference was the way the numbers were presented — and people applauded the ‘change’.

He also said you don’t want to fight player psychology. In the original beta, when a player was inspecting you, you’d receive a notice about it. The thought of being inspected creeped players out, and they said they didn’t want people to do that. So rather than remove the inspect system, they simply removed the message, and everyone was happy.

pardo controlisking Rob Pardo speaks about Blizzard game design
Control is King: Controls should be as responsive as possible. While players have clamored for different animations and effects, Pardo gave some very specific examples of why they simply wouldn’t work. As it stands, when you summon a mount it simply appears beneath you in a puff of smoke — the animation department suggested that it would be really cool if you’d actually call your mount and have it run to you so you could hop on it, going so far as to mock up the animation for it. But there was a downside to this — it took several seconds for that animation to play out, and if say, a rogue jumped out to stun lock you, you probably didn’t want to be stuck stunned and rapidly dying while watching your horse gallop up to meet you. So they settled with the puff of smoke we’re all familiar with.
pardo tuneitup Rob Pardo speaks about Blizzard game design

Tuning It Up: Pardo noted that tuning is easy to do, but hard to do well — that you have to keep in mind who you’re tuning your game for. With World of Warcraft, they succeeded in matching the level curve to the level of content, making it so that every player can solo all the way to max level if they want to, adding enough quests that it didn’t feel necessary to grind along the way. Pardo also noted that there was a myth about reaching max level — that players would simply quit the game once they reached the level cap. Blizzard took the stance of ‘if the game is enough fun for someone to get to level 60, they’ll want to play the game again’ — a stance that seems to be working remarkably well for them so far.

pardo avoidthegrandreveal Rob Pardo speaks about Blizzard game design

Avoid the Grand Reveal: Blizzard encourages designers and developers to show their work to everyone else often and avoid the ‘I can’t show this to anyone until it’s perfect’ mentality, creating an environment where feedback is encouraged and it feels ‘safe to fail.’ He cited Silvermoon City as a failure in this aspect — the city itself was designed in parts, and so difficult to weld together in game that they didn’t really do it more than once or twice while developing it. This resulted in a really beautiful city that didn’t feel like it was very well put together. Arathi Basin was noted as a success — the original map was very simple, and the designers simply built up from there, resulting in a battleground map that was playable from day one.

pardo cultureofpolish Rob Pardo speaks about Blizzard game design

Culture of Polish: With Blizzard, polish isn’t something that happens at the end, it’s something that happens all the way through development. Pardo mentioned that it’s an atmosphere of a team that is making their favorite game even better — that people love the game they are working on. Once the game gets far enough along, ‘strike teams’ are brought in — a cross section of developers from other teams, artists, programmer, designers, both new and experienced players, and they play test for feedback and a fresh perspective.

He pointed out that every voice matters — and that when dealing with player feedback, it’s a matter of keeping in mind that the more passionate your player base is about your game, the more you’re doing something right. He said if players are complaining about the game, they try to look at it from the perspective of ‘this person is just trying to make the game better.’

Pardo followed up with a short note — don’t ship your game until it’s ready. Self-explanatory, but refreshing to see that Blizzard is the sort of company that would rather a game be complete than push it out the door half finished.

With over 11.5 million players in WoW alone, it’s clear Blizzard is doing something right — and the panel did an excellent job of shedding a little light on what that something is. Game developers take note — this is the way you want to start. Check out the rest of the slides from the panel in the gallery below.

Blizzard, The9 Told to Pay in “WoW” Copyright Case

March 02, 2010 By: vio Category: Games, News

The Beijing Municipal Higher People’s Court has ordered Blizzard Entertainment, The9 (Nasdaq:NCTY) and other two parties to pay compensation of RMB 1.45 million to Chinese PC maker Founder Technology Group (600601.SH)for copyright infringement, the Economic Observer reported March 1 citing Founder Technology President Liu Xiaokun.

In August 2007, Founder Technology Group sued Blizzard Entertainment and The9 for copyright infringement, claiming that Blizzard used five of Founder’s registered fonts for the Chinese characters in the Chinese version of its MMORPG World of Warcraft. The9 operated Blizzard MMO WoW in mainland China until its license expired on June 8, 2009.

Founder had requested compensation of RMB 408 million, Liu Xiaokun said. The9 has appealed the court’s decision, the report said.

Founder plans to seek partners and investment opportunities in Taiwan, beginning with biopharmaceuticals and then expanding to digital resources and publishing technology, reported China Securities Journal. Founder has already invested more than RMB 4 billion in Taiwan, according to the report.

Xunlei Releases Game Download Ranking

March 02, 2010 By: vio Category: Games, News

Shenzhen-based download software provider Xunlei released an updated online game ranking based on client-end downloads from Xunlei’s site gougou.com on March 1. The top ten online games for the week ending February 28 were:

1. Cross Fire (Operator, Developer: Tencent (0700.HK), SmileGate)
2. QQ Speed (Tencent)
3. TianXia II (TX2) (NetEase (Nasdaq:NTES)
4. Kart Rider (Shiji Tiancheng, Nexon)
5. World of Warcraft (NetEase, Blizzard Entertainment)
6. Legend of Mir 2 (Shanda (Nasdaq:SNDA), Wemade)
7. Dungeon and Fighter (Tencent, Neople)
8. Tian Long Ba Bu (Changyou (Nasdaq:CYOU))
9. Chuan Yue Online (Shanda, Beijing Chuanyue Shidai Information Technology)
10. Zhu Xian Online (Perfect World (Nasdaq:PWRD))

NetEase: “WoW” Project Chief Resigns

March 01, 2010 By: vio Category: Games, News

The project chief for NetEase’s (Nasdaq:NTES) licensed MMORPG World of Warcraft (WoW), Li Riqiang, has resigned, National Business Daily reports February 24.

NetEase’s official, written statement to the press did not address the company’s choice of a replacement for Li, the report said. An unnamed NetEase employee said that the company does not plan to appoint another person who will be responsible for speaking to the press, the report said.

Li joined NetEase’s marketing department in 2003, the Economic Observer reported in July 2009.

China’s General Administration of Press and Publications announced on February 12 that it had approved NetEase affiliate Shanghai EaseNet Network Technology to operate “The Burning Crusade,” the first expansion of WoW, in China.

NetEase: “WoW” Drives Q4 Revs 62% Y-o-y

March 01, 2010 By: vio Category: Games, News

Internet and online game service provider NetEase (Nasdaq:NTES) booked net profit of $83.8 million for the fourth quarter of 2009, or diluted earnings of $0.64 per American depositary share, compared to $84.4 million in the year-ago period and $57.7 million in the third quarter of 2009. Total revenues grew 62.2% annually and 47.8% sequentially to $189 million in the quarter.

Fourth quarter online game revenue spiked 63.6% annually and 41.9% from the previous quarter to $159.4 million, as NetEase recorded a full quarter of operations of 3D MMORPG World of Warcraft following the game’s re-launch in September 19, 2009. The royalties, amortization of license fees and technical consultancy service fees associated with a full quarter of WoW operation trimmed the gross profit margin for NetEase’s online game business to 70.8% in the fourth quarter, compared to 88% and 79.9% in the year- and quarter-ago periods.

Advertising services revenue climbed 64.3% year-on-year and 113.6% quarter-on-quarter to $26.9 million in the fourth quarter, as consumer spending rebounded and NetEase restructured its portal business and launched new marketing strategies. Revenues from wireless value-added services and other channels were roughly flat from the previous quarter at $2.7 million.

For the full year 2009, NetEase book net profit of $271.1 million, up 18.8% from 2008, and total revenues of $560.1 million, up 26.7% on an annual basis. The increase in revenue was partially offset by an increase in the cost of revenues, from RMB 559.6 million in 2008 to RMB 952.2 million in 2009, due to staff expenses, licensing and other fees associated with operating World of Warcraft.

NetEase’s fourth quarter launches included the ninth expansion pack for Fantasy Westward Journey in October 2009; an expansion pack for Tianxia II in December; and the commercial launch of the company’s second webgame, Storm of Empires in December, said company CEO and Director William Ding.

NetEase Submits “WoW” to GAPP, Halts New Registration

February 09, 2010 By: vio Category: Games, News

NetEase (Nasdaq:NTES) will temporarily suspend new gamer registration for its licensed 3D MMORPG World of Warcraft (WoW) between February 8 and February 14, and will submit an application to the General Administration of Press and Publications (GAPP) soon for the game’s first expansion, “The Burning Crusade,” NetEase announced February 7. Between February 8 and February 14, NetEase plans to offer existing gamers three hours of free gaming time per day.

GAPP announced February 8 in a notice posted on its site that it had agreed to review NetEase’s application.

Between February 8 and February 14, NetEase plans to offer existing gamers three hours of free gaming time per day.

Reports in September noted that NetEase had resumed commercial operations of WoW without GAPP’s approval, and GAPP later called for NetEase to halt the “illegal” charging and account registrations for the game.

The MoC posted a notice on its website in September 2009, saying that online games do not count as ‘publications’ and thus are the responsibility of the MoC alone, while games distributed in hard copy form — for example CD-based client-end data — fall under the jurisdiction of the GAPP. The MoC has the sole right to punish companies operating online games without GAPP approval, the document said.

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