When Chinese gaming company The9 lost its licence to operate the popular “World of Warcraft” game in China, most expected its business to take a hit. But last night the company revealed just how heavily it had come to rely on the game to drive overall revenue.
The9 reported that Q2 ’09 revenue declined 32% to about $40 million while the company swung to a loss of about $12 million from a gain of $14.5 million in Q2 ’08.
That’s a pretty big impact given that the company operated WoW for two of the three months in the quarter.
In April, WoW owner Activision Blizzard said it had chosen competitor NetEase to operate the game in China and The9’s licence expired on June 7, 2009. After some back and forth with the government, NetEase released a slightly altered WoW in early August.
Given that WoW consisted of nearly all of the company’s revenue, it’s unclear how The9 will revive its business. For its part, management said in the earnings release that it had invested in a few game development studios and had entered into licensing agreement for other games like World of Fighter and Kingdom Heroes 2.
Still, investors have been sceptical. The stock fell nearly 50% when Activision announced it was pulling its licence back in April and has hovered at that level since.
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