6 Sep 2010 12:03

Tencent to enhance performance through MMORPG - analysts

Shanghai. September 6. INTERFAX -CHINA - Tencent Holdings Ltd., China's leading Internet company, is adding a massively multi-player online role playing game (MMORPG) by a highly regarded South Korean developer to its portfolio to boost its lukewarm performance in the domestic MMORPG sector, analysts told Interfax on Sept. 6.

Web portal Sina reported on Sept. 2 that Hong Kong-listed Tencent spent more than $40 million to secure the operating rights to "ArcheAge," a 3D MMORPG game developed by South Korea's XLGames Inc.

XLGames started developing ArcheAge in 2006. The game is due to be released commercially in 2011, the report said.

Tencent's acquisition represents the second highest price paid by a mainland game operator for a South Korean game. The price is behind only the $50 million Shanda Interactive Entertainment Ltd. paid in 2007 for "AION - The Tower of Eternity" developed by NCsoft Corp, according to the Sina report.

Zhao Xufeng, an analyst with domestic consulting company iResearch, told Interfax that though Tencent has had success with casual games such as QQ Speed and QQ Dancer, its track record with MMORPGs has lagged behind the other major domestic game operators, all of which have at least one flagship MMORPG.

"The move shows Tencent's determination to get a piece of the lucrative MMORPG market," said Zhao.

Yu Yi, an analyst with Analysys International, told Interfax that "ArcheAge" is likely to do well in China due to its use of advanced technology, as well as design by renowned developer XLGames.

MMORPGs accounted for 79 percent of China's online game market by revenue in 2009, according to a white paper issued by the Ministry of Culture (MoC).

Around 45.9 percent of Tencent's total revenue in the second quarter of 2010 came from online games, or RMB 2.14 billion ($315.3 million), according to the company's Q2 financial results.