[photopress:fantasy_westward.jpg,full,alignright]NetEase.com, one of China’s biggest online game providers, posted 15% growth in the fourth quarter as profit surpassed expectations. The company operates the popular Westward Online Journey II game.
Daniel Vlad, an analyst from Casual Analyst, earlier predicted that Fantasy Westward Journey’s average concurrent users (ACU) in the fourth quarter would decrease by 8% to 430,000, from 468,000 in the previous quarter, while the ACU of Westward Online Journey II fell around 2%. The two games contributed 98% of NetEase’s online gaming revenue.
Liu Ning, an analyst from research house BDA China, said NetEase’s revenue decrease in the fourth quarter was mostly due to the fading appeal of its two flagship games and the company’s subscription-based business model. He said, ‘Every game has its life cycle in which at the end it becomes less appealing to users.’
NetEase plans to launch a new game, Tian Xia II, on March 1 and to upgrade its Westward Journey Online II to Westward Journey Online III in the second quarter of this year.
Liu Ning said if NetEase does not change its current subscription-based business model, it may find itself in a difficult position competing with rivals like Shanda, which offers role-playing games for free and receives nearly half of its revenue by selling virtual weapons and vehicles rather than charging subscription fees.
Source: China Daily