30 Nov 2009 14:14

Kingsoft and Shanda to take on joint game operations

(Editor's note: Due to a coding error, the original version of this article had several omissions, which have been addressed in the below).

Shanghai. November 30. INTERFAX-CHINA - Kingsoft Corp. and Shanda Interactive Entertainment Ltd. will work together to jointly operate online games, a senior Kingsoft official told Interfax on Nov. 30.

"The JW, Kingsoft's flagship game, is the first of a number of Kingsoft games to be launched on Shanda's CGA online game operation platform," Zou Tao, the chief executive officer (CEO) Kingsoft's online game subsidiary, said.

When contacted by Interfax on Nov. 30, Zou declined to reveal any details of Kingsoft's contract with Shanda, but said that the two parties would make an official announcement shortly.

According to Zou, Kingsoft is currently strengthening its game operation capacity and plans to launch 10 new self-developed games in 2010.

Zhao Xufeng, an industry analyst with iResearch, told Interfax on Nov. 30 that such joint operation partnerships will become a trend as China's online game market matures.

"Whoever owns the online game platform with the largest user base will ultimately dominate the market," said Zhao.

Zhao pointed out, however, that the outcome of Kingsoft's partnership with Shanda is still unclear, as CGA platform users are different from Kingsoft's target user base for its JX game series, which includes the JW.

The CGA platform commenced operations in 2002 and was acquired by Shanda in 2006. The platform has become one of the largest online game operation platforms in the world with most concurrent users at any given time.

Kingsoft generated total revenue of RMB 162.8 million ($23.83 million) from online game operation in the third quarter of 2009, up 9 percent year-on-year, according to financial figures on Nov. 26.

Average monthly active pay users increased by 17 percent quarter-on-quarter and 25 percent year-on-year to 1.54 million in the third quarter, according to the same figures.