CDC Games Revenue Increases When Many Others Fall

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CDC Games, a subsidiary of CDC Corporation this week released their third quarter 2008 numbers, and while many are cutting and slashing due to economic woes, they seem to be enjoying large profits.

CDC Games published and operates online games in China (EVE Online, Lunia, The Lord of the Rings Online: Shadows of Angmar, Shaiya), total revenue from continuing operations during Q3 2008 was (U.S.) $12.1 million. This represents an 83 percent increase compared to the same quarter last year.

Gross margin from continuing operations for CDC Games during Q3 2008 was 40 percent. CDC Games also generated positive Adjusted EBITDA from continuing operations in Q3 2008 of (U.S.) $3.1 million. These results were achieved despite the impact of the Olympics, which negatively affected the entire on-line games industry in China. During Q3 2008, CDC Corporation ceased its games operations in the U.S., Japan and Korea and, as such, all financial information presented herein relating to CDC Games is derived solely from CDC Games’ China operations.

Q3 2008 highlights for CDC Games included:

  • In late September 2008, CDC Games launched Digimon RPG, an online role-playing game based on the popular Japanese television animated series. For several continuous weeks Digimon, secured the No. 1 ranking on the "Gamers’ Recommendation List" on http://g.baidu.com, the top search engine in China.
  • Although CDC Games did see a slight decline in average daily revenue (ADR) from continuing operations during the Olympics, as expected, on August 29, 2008, CDC Games reported an all-time daily revenue from continuing operations record at approximately $212,000, or RMB 1.46 million, post Olympics.
  • CDC Games announced its plans to offer additional "green online games" for an emerging genre in China. "Green online games" refers to games with content that is considered to be healthy, non-violent, non-pornographic and non-addictive.
  • A major new upgrade to the popular Legend of Mir 3, a 2D fantasy-themed massive multiplayer online role-playing game (MMORPG), for gamers in China was launched late during Q3 2008.
  •  Yulgang 3.0, a major new version entitled “The Magic Labyrinth of Ice” launched early in Q4 2008.
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