Unlike common U.S. game formats that use consoles, China’s gaming community focuses on games that can be accessed online through personal computers by hundreds of thousands of players simultaneously.
ChangYou.com allows users to play its games for free, and makes money by selling virtual items, such as gems or skills.
ChangYou is a fast-growing Chinese developer of online fantasy games and is the latest company to test investors’ appetite for initial public offerings in the U.S.
The Wall Street Journal said that ChangYou.com unveiled its first product just two years ago and earns its money by creating online role-playing games for the Chinese market. Its products include a fantasy 2-D martial-arts saga called Tian Long Ba Bu, based on a book that translates into ‘Novel of Eight Demigods.’
ChangYou.com’s growth since Tian Long Ba Bu’s launch in May 2007 is very real. Revenue in 2008 jumped nearly fivefold to $202 million, while net income rose by a factor of 20 to $108 million, compared with 2007.
Ben Holmes, publisher of research site Morningnotes.com said, ‘Their numbers are amazing. It’s also a very small deal with just 7.5 million shares, so it’s set up right away with scarcity built in.’