About this Blog

The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.

Thursday, March 29, 2007

SINA – SOHU – NTES – Video Shootout part3

Video Shootout Part 3 – SINA Video Activities

In the last couple of earning conferences, SINA talked a little about their video activities. But they definitely didn’t sound as passionate as SOHU’s management. Let’s see how much effort has SINA put into their video activities.

The following is the main page of sina, www.sina.com.cn:

Right away, I am able to tell there are a lot of video programming on SINA’s site. On the left hand side, there some sample programming on SINA’s broadband programming. On the right hand side, it is some news with video in them.

Sina’s main page is similar to SOHU’s in that it has many news items, probably in the thousands. Let’s scroll down the main page to the entertainment section of the main page:

As you can see, there are a lot of items with embedded videos.

Most other sections don’t have as many video footages. But as a rough guess, I would say that SINA has probably 3 to 4 times as many stories with embedded video.

Since I had looked at the sports section of NTES and SOHU, let’s do the same for SINA. The following is the main sports page
On the right hand side, it has the TV schedules for some sports matches. On the upper left hand side, there is a button called Sports Broadband page, let’s click on that and the main Sports Broadband page appears

It is clear that when SINA say broadband, it means video. Every stories in this page has video contents in them. On the right hand side, it plays a sports match.

On the top, there is a row of video channels. They are England Soccer, Italian Soccer, Europe Soccer, Goal TV, ESPN, Tennis, Golf, F1, and Others. I believe these are some of the premier contents they licensed from the third parties (for example, European soccer leagues, etc.)

On the upper left part, there is a button called SinaTV, lets click on that and SinaTV page comes up

It is clear SinaTV is the TV channel that has Sina’s original contents. The type of programs are movies, talk shows, etc. It is similar to SOHU’s V channel. It uses Sina’s peer-to-peer programs. Therefore, it won’t require much hardware and bandwidth resource even if there are millions of viewers watching.

On the top of the page, there are a row of buttons that indicated different channels. It has CCTV, and Phoenix TV.

Finally, lets go to Sina’s new YouTube-like service, blog video: http://v.blog.sina.com.cn/

The set up is very similar to youtube. When you click on a link, the video for that link pop up. This is strictly user generated.

Now, we are able to make several observations:

1. Sina has the most video contents. There are probably 3 to 4 times more stories with embedded video than Sohu and 10 to 20 times than that of Ntes.

2. Sina signed many license deals with many 1st tier contents providers such as ESPN, CCTV, PhoenixTV, Europe soccers, etc. In terms of license partners, Sina has both quality and quantity.

3. These license would surely increase the cost of contents (unless they are profit sharing). But they also allows Sina to get many embedded video for the stories.

4. These embedded video takes a lot of resources and bandwidths because they are not peer-to-peer.

5. Sina does have a peer-to-peer TV channel called SinaTV. Most of the shows are existing TV shows or movies. The percentage of the original contents are not as high as that of Sohu.

6. Sina also have other TV channels like ESPN, CCTV, Phoenix TV. Most of the contents are broadcasted through embedded video. Sina probably spend a lot of money on buying the contents, and on hardware and bandwidth to distribute these contents.

7. Very little advertising on these video contents.

8. Unlike youtube that is a stand alone service, Sina’s blog video is part of Sina’s blog service.

9. Sina is getting a lot of celebrities to generate popular blog videos. I am pretty sure it cost Sina money to have these celebrities under contract.

10. Sina is going to integrate its instant messaging service, UC, with the blog video. Therefore, Sina is going to have its youtube, blog, and instant messaging all integrated into one service. This may have the wonderful side effect of making UC more competitive against Tencent’s QQ.

11. There is very little ads in Sina’s blogs and blog videos.

In part4 and 5, I will have a brief descriptions on other competitors. Part 6 is the conclusion.

Monday, March 26, 2007

Netease – TX2 – Strange marketing strategy

I was planning to do the SINA’s part of the video shootout series. But I think I need to give an update on the status of TX2 and its strange marketing plan.

As mentioned before, NTES provided almost no marketing prior to TX2’s open beta. Most people in China had no idea that NTES even had a game called TX2.

For the open beta, NTES did some low level marketing consists of mostly a few banner ads on the gaming website like 17173.com and some peer to peer program.

As reported, even NTES management were surprised of the little amount of players playing TX2 right now.

Well, in the last couple of weeks, even those low levels of marketing had been removed. There were ZERO marketing (as far as I can tell) for TX2 in the last 2 weeks.

A danger sign is that there are little new players in TX2. Most of the players in TX2 are high level players. It is dangerous for a game with very little new players because it destroys the balance of the game (in terms of game playing and economic system).

Today, I noticed that there is a small banner ads for TX2 on 17173.com.

Compared with what other companies were doing with marketing their games, NTES is probably spending less than 1% of what its competitor did on marketing.

I just hope a good game like TX2 won’t go to waste because of NTES’s seemly psychologically distaste for marketing.

Friday, March 23, 2007

SINA – SOHU – NTES – Video Shootout part2

Video Shootout Part 2 – SOHU Video Activities

During the last couple of Sohu’s earning conference calls, Sohu management had been very enthusiastic about the future of video related activities in the company's future. Out of the three companies, I will have to say it was Sohu that did the best job in clearly articulating the importance of the video contents and what it means to the online ad business.

Now let us go to its main web site www.sohu.com

Unlike Netease’s main web site (and like Sina’s main web site), sohu.com has incredible amount of information on its main web site. Unlike western information portals, Chinese web portals cram every information possible on its main site. The above picture is the top of sohu.com. At the top, there are v and s that indicate the two main video channels that represents sohu’s main video intiatives. In addition, there are also individual news that have embedded video attach to it.

Now, lets scroll down the main page,

This is still on the main sohu.com page. But it is about one third down. On the left hand side, there are some news with embedded video. But on the right hand side, it has the schedules of Sohu’s two main TV channels (S and V channels).

Now, let’s go to Sohu’s sports page:

Right away, something interesting pops up on the lower right hand sides. It is a TV-like commercial for Asus (a computer company). The video is about 30 seconds. This is the most clear example of where Sohu thinks the future lies in online ads. Instead of the newspaper like contents, it is going to video or TV like in both content and ads.

I am sure average company likes the TV ads much more than just a picture ad.

Now let us click these ads away to show what is underneath the sports page:

Again, some news with an embedded video. On the right hand side is the schedule time for some of the S-channel TV programs. But on top, there are four items, they are NBA videos, CBA (Chinese basketball) Videos, Chinese soccer Video, and Olympic videos. Now, let us see what happens when we click the CBA Videos:

Right away, an embedded video is played. I am not able to capture the video, but the video did play. The whole page consists of links to embedded videos. Sohu has a lot of video contents on CBA. But I believe all the videos are embedded videos.

Now, lets go to one of the main channel, the S-channel:

On the left hand side, it plays the video. Again, I am not able to screen capture the video, but the video did play. The S-channel is more like a regular TV channel in that when you go to the S-Channel, it will show at whatever point the show is at. Unlike an embedded video where it is one to one (one video stream from Sohu to the viewer), S-Channel uses peer to peer technology and is one to many (one video stream from Sohu to many viewers).

On the left hand side, there are links to other videos. But those videos are embedded videos. There are also schedules of the S-Channel.

Finally, lets go to another main TV channel that Sohu is developing, the V-Channel. V-channel is developed for entertainment. While S-channel is targeted for men, the V-channel is targeted for women. The following is the V-channel:

On the upper left hand side is the video player that plays the V-channel. Both the S and V channels are developed by Sohu. Most of the contents of S-channels are sports games. Commentators hired by Sohu provide the play-by-play. There are also sports talk show programs. For the V-channel, a lot of programs are simple programs where attractive girls and boys get together and talk about dating, gossips about movie stars, or singing shows.

There are also 24 hours schedules for the V-channel. On the right hand sides are the stories with embedded videos.

However, there is something interesting on this page that is different than the S-Channel. Right below the video player are the list of 8 TV stations. The default station is the V-channel that is developed by Sohu. The other 7 TV stations seems to be from the third party partners. They seems to use peer to peer TV broadcast also. One of them is news channel and three of them are the provincial channels. They seem to be out of place in the entertainment section.

There are several observations that can be made:

1. There are more video contents than that of Netease. But the vast majority of the news doesn’t have embedded video.

2. Sohu themselves generate a lot of the news content. But they are in newspaper form. Will they start to generate news in the video form?

3. Sohu has a lot of video contents in sports and entertainment.

4. There are three types of videos. The first kind is the embedded video that is attached to a particular story or news item. This is one to one format and will take a lot of resource and bandwidth from Sohu if many users watch the same embedded video.

5. The second kind of video is the s and v channels. They are Sohu-generated video. It uses peer to peer technology like Napster or Kazaa. It will only take minimal amount of resources and bandwidth to support large amount (even up to millions) of users.

6. The third kind of video is the third party TV channels. Next to the V-channel, there are 7third-partner channels. Sohu seems to use peer to peer technology to broadcast these channels. These channels are 2nd tier channels in China (not first tier like CCTV, etc.)

7. Sohu seems to be pushing for its self-generated S and V-channel. That might explain the mis-placement of some the third party TV channels.

8. Most of the S Channel are third party sports matches (European football, NBA, or CBA matches) with Sohu provides commentary and play-by-play. Thus the % of content is mostly the matches themselves.

9. Most of the V Channels are completely self generated by Sohu. They can be very simple talk show format or Sogou music programs, etc.

10. The existence of video ads on Sohu’s web site.

Clearly, Sohu is putting a lot of effort in its video activities. It is especially concentrating in creating its own content (rather than licensing from third parties).

In part 3, I will investigate SINA's video activities. In part4 and 5, I will have a brief descriptions on other competitors. Part 6 is the conclusion.

Thursday, March 22, 2007

SINA – SOHU – NTES – Video Shootout part1

Video Shootout Part 1 – NTES Video Activities

Video is going to be the major growth engine for China’s online ad. I am going to review the video activities of China’s 3 main web portals and hopefully gain insights on which company is doing the best in this critical area of growth. I am also going to talk about other competitors against these three portals.

The first stop is NTES and its main web site www.163.com

From the main web site, there is virtually no embedded video. No news items with video signs next to them. The main page looks and acts like a newspaper.

The two areas that usually have embedded video are the sports channel and the entertainment channel. Let’s go there.

The following is the CBA (Chinese Basketball Association) portion of the sports section.

On the CBA page, two of the top 7 stories have embedded videos with them.

The next page is the page with all the CBA stories that have embedded videos with them:

There are about 4 to 5 stories with embedded videos per day on CBA.

Next, we go to the entertainment channel:

The top story for tonight has three embedded video. If we click one of the link, we get the following:

A video of a singer sang a song when he was much younger.

There are several observations that can be made:

1. There are very few videos. The ratio is probably 100 to 1. For every 100 stories, only one has embedded video in them.

2. NTES doesn’t have TV stations. It has a hard time getting video clips. To get video, it has to somehow get it from partners. Except in sports area, I don’t think it has sign many partners.

3. All the videos are embedded video.

4. There is no third party TV station.

5. There is no NTES created TV station

6. There is no hint of video on the main page.

Overall, only one word can best describe NTES’s video activities: disappointing.

In part 2, I will investigate SOHU's video activities. In part 3, I will investigate SINA's video activities. In part4 and 5, I will have a brief descriptions on other competitors. Part 6 is the conclusion.

Tuesday, March 20, 2007

Netease – TX2 – Interesting Interview

Some times one comes across an interview that says much about how a company is ran. The more I follow Netease, the more it reminds me of a startup in Silicon Valley in the 80’s.

Netease maintains two web sites for TX2, one is called official TX2 site and the other is called TX2 Users site. The following article is on the TX2 users sites:


It is an interview with the Netease’s product manager. I will translate part of the interview that I think is interesting. Note that the sentence inside the parenthesis is my thoughts.


Question: Did the open beta meet your expectation?

Answer: Better than what I expected. The users came out with many game-playing issues that weren’t expected by the game designers. We are busying correcting these issues. On the other hand, THE NUMBER OF PLAYERS WERE NOT AS MANY AS WE EXPECTED.

(Now we know why Netease hasn’t announced the PCU yet. On the other hand, unlike most Chinese game companies, Netease is not shy about announcing her shortcomings to the players).


Question: What are some of the major features that will be added to the game?

Answer: In the short term, gang war; in the medium term, school and money tree; in the long term, commerce group, dungeons, and battleground, will be added.

(As can be seen, there are a lot of PvP features. Some of them are especially designed for large scale gang warfare. In addition, TX2 also will have quests in the form of dungeons.)

…….They discuss many game-playing features here………….

Question: Finally, could you say something to the players?

Answer: Ah, let me say something I really mean. If you believe TX2 will get better and better, please stay. But if you believe TX2 is a trash, please leave.

(Ah.., certainly talks like a geek who hasn’t had a day of class in marketing. Personally, I think it is a breath of fresh air. But how will it play in China is anyone's guess!)

Monday, March 19, 2007

NTES – NCTY – TX2 – WOW – Guilds War – Shootout (Part 3)

3 Games Shootout (Part 3) – Conclusion on TX2

As discussed previously, TX2 is a ground-breaking game. A game that will appeal to many Chinese players. But it does have risks.

It will be a game dominated by gangs (tribes, if you don’t like the word “gang”).

First, in the real world, if you are defeated, you probably just join the victor. People tend to work for the side to obtain protection. But in the game world, if a gang is defeated, the players in the gang probably leave the game all together.

There will be a lot of emotion. The victor will crow about their accomplishment while the loser will feel they being betrayed, deceived, or/and disrespected, etc. During closed beta, the gang that won the battle frequent times were not the stronger one. The way the castle warfare is designed, it allow gangs with more cohesion and more strategic acumen a good chance over a gang with more members.

It can be hard for the losing side to swallow its pride especially if they were the more powerful gang. And Chinese don’t like to lose face.

It is important for the TX2 game designer to allow the disgruntled players to switch to another servers without losing too much credits. TX2 will be a high turn-over game. It is important for TX2 to make sure the turn over is between the servers and not from TX2 to its competitor games.

Second, as the gang start to occupy more castles and gets too powerful, it is going to make it uncomfortable for rival gang to compete and for the non-gang member. It is human nature that some gang member will start to pick on non-gang members. How is Netease going to handle this is going to be a challenge.

In the end, I think TX2 will be a very successful game, but not a true block-buster. I think its PCU at its absolute peak will be more like 300k rather than 1.5M. In summary, it will suffer from the following problems:

1. High entry requirement. Only players with recently purchased computers will be able to play. Castle Warfare will be the most pressing on the player’s computer. There is only a sub section of Chinese player who have the powerful computer to play this game.

2. For a World Domination game like this, I think a lot of players will check it out. But I think a lot of them will leave if the player or the player’s gang doesn’t do well.

But of course, it is extremely hard to predict how Netease’s game will evolve in 3 years.

Finally, TX2 says a lot about Netease the company. It is telling me that Netease is really a company that run like Apple rather than Microsoft.

Rather than going the easy route of developing a WOW-clone, it went about the more risk route of developing a completely new type of game.

It is a company that ran by technocrats. Its 20s/30s something chief game designers were continually been raided by its competitors. Yet, the next guy in line raised through the rank and there is hardly a hiccup.

Every game they make, they want to push the envelope of China’s (or even the world’s) game technology. They are innovative and they are successful, but why do I get the feeling of them just waiting to get wiped out by a Microsoft-like company.

If the young Bill Gates is in charge of Netease now, in addition to thinking about the next great game-playing features, he would be thinking about how to kill off his competitors and monopolize the industry. Instead of the 5 or 6 new games in the pipeline, Bill Gates would have 20 games in the pipeline. He would probably brought out a 3d engine foreign companies and a domestic free-to-play game design company.

I am happy that Netease is emphasize quality. But rather than spending 100M every 6 months buying shares back, why can’t it spend it on more hiring, making more titles and purchasing more companies.

I had read an article where the chief designer of TX2 talked about why he doesn’t emphasize quests. The point he tried to make is that since each player only went thought quest once, it is an inefficient way to use programmers.

I can’t disagree more. To me, a quest-like game shall be the competitive advantage for Netease over foreign game companies. A company like Blizzard can hire programmers cost 100k/year vs. Netease hiring programmers cost 5k/year, who will have more competitive advantage.?

A WOW quest where average Chinese player can’t really relate to vs. a quest based on mythical Chinese legends, which one do you think average Chinese players prefer?

Anyway, a WOW-clone that is dominated by quests will be extremely popular in China. But that game is NOT TX2. Either Netease do it, or somebody else will.

Friday, March 16, 2007

NTES – NCTY – TX2 – WOW – Guilds War – Shootout (Part 2)

3 Games Shootout (Part 2) – My Prediction


WOW is really the standard bear that all future 3d games in China shall copy. It has everything. Its quest systems (PvE) introduce the new players to the game and keeps players involved in the game. After players becomes high level players and become tired of that particular aspect of the game, it keeps them busy by its PvP features.

But when it comes down to it, I am not sure play features are the real reason it is the number 1 3d game in China. I think they are so popular in China because they are the number 1 game in the world and all the fashion chasing Chinese want to look cool by playing the game.

The rich play features makes WOW the number 1 game of the world. The title of world’s number 1 makes it a cool thing for Chinese youth to play. The rich playing features of WOW keeps the Chinese players in the game once they started it.

This probably is the reason why so many good western games bomb out in China. They failed in China not because they don’t have great playing feature (they do), but because they don’t have that lofty title of “world’s best”.

WOW is a little weak right now according to the server tracking. But it is just temporary. When the new expansion pact arrives, it will no doubt starting to grow again.

But since NCTY is not able to get the contract term nailed until very late, it gives TX2 a chance to shine. I am not sure about whose fault is it. I am surprised that expansion pact is not included in the original contract. I am also sure that Blizzard wants to squeeze as much money out of NCTY as possible.

When it comes down to it, it is the life of junior partner. Companies like NCTY and SNDA who doesn’t add much value are in a very weak position. As people realize there are money to be made here, more and more competition will come up and bid to run the game. Even if they out-bid the competition, and the game becomes successful, they get screwed by the game developer.

Guilds War –

I personally think Guilds War is a great game. But how is NCTY going to market the game?

Is this going to be marketed as a traditional MMORPG? It is not and market it as so will doom any chance of Guilds War.

When it comes down to it, it is a LAN that shall compete with games like Counter Strike. Except Counter Strike is “free” in China.

How about charge each player a set fee per match? After the match, the winner gets a reward while loser gets nothing.

Yes, tournament games. Maybe that is what NCTY shall do. Make this a tournament game with NCTY getting a cut of the entry fee.

TX2 -

The advantage of hundreds of (or even thousands of) players battle is players really feel like they are part of something greater than they are. They will feel like they are writing the story.

But since it is basically a strategic game, the impact of each individual players is going to be very small. Will the players still play after the initial novelty wear off? This is where the dedication of the gang gets involved. This is why TX2 is going all out to entice existing gangs and encourage players themselves to form gangs.

The fun is not just the battle themselves, but the strategic session before the battle and the alliance between the gangs.

(By the way, is this a good thing? I am sure some members of the “gang” will probably be out on the street and be a real gang-banger if not for TX2. How will the old Mandarin in Beijing look at this? Anyway, this is out of scope for this article.)

But still, I wish TX2 will have tactical game (much like the battleground in WOW or Guilds in Guilds war) where the skill of the players mean a lot.

In addition, is it possible for TX2 to incorporate both strategic and tactical together?

But the above is just my speculation. But a unique feature of all Netease games are their adaptation as times goes by. As long as the game has a good foundation (game engine), Netease would eventually add so much features that the game in operation after 3 years bear little resemblance to the game just starts operating.

Combines with all the special activities that NTES always arranges, this game shall be a mini-block-buster (maybe with a PCU = 300k).

Continue to part 3

Thursday, March 15, 2007

NTES – NCTY – TX2 – WOW – Guilds War – Shootout (Part 1)

3 Games Shootout (Part 1) –

Now I have investigated all 3 games, I am able to do some comparison about the three games. One is also able to get an idea of how successful can each game be in China. In part 1, I will provide all the background information. In part 2, I will provide my guess on how successful each game is going to be in China. Part 3 is the conclusion.

Information on my blog on these games:



Guilds War:







WOW – many servers, each server can support thousands of players.

TX2 – many servers, each server can support up to 5000 (?) players.

Guilds War – One server (supported by many computers). Player can interact with millions of other players.


WOW – basically a PvE game. Dominate by thousands of quests. Have instance dungeon for high level players. In this case, each “instance” of dungeon is created for the player (or players group) and the player (group) won’t interact with other players (players play in a LAN type of setting).

Guild War – Basically a PvP game. Its PvE aspects are dominated by quests. In PvE, the player plays in a setting like a single player or LAN setting.

TX2 – I am guessing it will be a PvP dominated game. Its PvE is dominated by a few (5 or 6) main story lines. At this point, there is no quest. There might be a few quests in the future (for high level players?), but this won’t be a quest dominated game.

The PvE aspect of TX2 is most likely main story lines plus monsters hack. The bad thing about main story lines are a lot of other players are doing the same thing as you are. There will be conflicts (other player might steal your monster kill, etc.). The advantage is you are always interact with thousands of other users, one might make friends easier.

Another big advantage of TX2 will be its many activities. It had always been Netease’s calling card and I don’t expect it to change.


WOW – Has PvP server – Player vs. Player battles are allowed here.

Battleground – allows 2 groups (up to 40 players) to do battle. This is very much like the LAN games battle over many maps.

For a PvE dominated game, WOW has many PvP features as well.

Guilds War – This is basically a PvP game. Players form guild (up to 12 players) and fight it out with other guild. This is just a glorified old battle.net on a global scale. Almost like a LAN game where the sides are matched by the game and can come from anywhere in the world. The chief designer of this game was the chief designer of battle.net. This is the reason that they don’t charge fees for this game in the US. They make money by selling expansion pacts. It is rather difficult to see how Guild War can make money in China.

TX2 – Pure speculation on my part at this point. I believe the core of TX2 is going to be castle warfare. There is no theoretical upper limits for the number of players. But as more and more players get congregated to a small area, it will start to lag on the player with not-so-powerful computers. At this point, I would guess it would be 200 vs. 200 on each side. But as Netease optimize its programming code and as players get more powerful PCs (as time goes by), I would guess it might even be up to 500 vs. 500 in the future.

For WOW and Guilds War, the result of battleground or guilds warfare don’t really impact the story of the game. But for TX2, the result of these castle warfare is the main story. The story of the game is going to be controlled by the players themselves and not by the game designers.

Continue to part 2

Wednesday, March 14, 2007

NCTY - WOW - Game Review

WOW is such a popular game that there are tons of reviews available by just searching it on google. But I am doing it so I can use this as a measuring stick for newer games. Therefore, my empahsis is going to be on the game-playing features.

First, Official Trailer can be found:


Some Gameplay Video:


A pretty good review from Gamespot:


Some background information on WOW:

WOW was released on November 23, 2004 in the USA. It was released in China on June 6, 2005. On January 16, 2007, the expansion pact The Burning Crusade was released in the USA.

In WOW, the players can choose from 2 factions, 8 different races and 9 different character classes. In addition, the player can choose professions.

There are two types of servers, normal (or PvE) and PvP servers. The vast majority of servers are the PvE (Player vs Environment) servers. On these servers, the players can’t be attacked by other players unless permission is given.

On PvP servers, players can be attacked by players from the other faction.

The vast majority of servers are PvE. WOW are basically a PvE game. Its emphasis is on role-playing. Its defining characteristics are its thousands of quests player can play.

Every players can have up to 20 quests available to them at any given time. The beginning quests are usually to introduce players to a certain area. The later quests are to allow players get random items, etc.

There are two basic type of quests. The basic quest and the instances. The instance are dungeon that are created just for you or your group. Therefore, you won’t compete with other player groups in the instance. This aspect is very similar to LAN (Local Area Network) game rather than a MMO game.

There is also auction house where players can buy/sell items from/to other players. This allows for an economic system.

There are also battlegound where up to 40 players on each side can go in and battle each other. Again, this aspect is like a LAN game.

In its core, WOW is really a PvE Role Playing game that is dominated by quests. The players can play the quests all game long and never have to do anything else.

For higher level players, it has many PvP features that keep players in the game after they are tired of the quests.

At this point, WOW is the most popular 3D game in China and is the benchmark for all future 3D games in China.

Tuesday, March 13, 2007

NCTY - Guild War

So far NCTY had not released its PCU number for Guilds War yet. For Netease, she has also not released the PCU number for TX2 yet.

Usually, if the number is anything like 120k or 200k, the companies would had eagerly publish the number to build publicity.

If you read my previous posts, I didn't expect TX2 to be extremely popular at the beginning, but I did expect Guilds War to be very popular considering the amount of marketing NCTY had done.

I am a little surprised that Guilds War doesn't seem to do as well as I thought it would. But this is of course just my speculation at this time. We won't know for sure until the companies published their PCU numbers.

At this point, NCTY had not announced whether Guilds War would be a free-to-play game or a paying game. Could this be the case for its not-so-wonderful performance?

Any way, Guilds War is going to release its final (third) expansion pact (Nightfall) on 3/16/2007. That might give it a kick.

see link: http://gw.the9.com/news/main/56632.shtml

For TX2, it is progressing well. Every week, there are vast amount of new contents being added. It is indicating that the Netease's game programmers are hard at work. But mostly, it indicates that the game is really still in development stage.

Friday, March 9, 2007

SOHU – TL – Open Beta soon?

SOHU – TL – Open Beta soon?


TLBB is a new game that is in development by Sohu’s game division. This is a domestically developed game .

This is an interesting game that could be very popular or completely fails.

But so far, SOHU had been doing what NTES had been doing, that is, keeping a low profile and hard at work. Typical Chinese game companies will spend 2 years in internal development and 3 to 4 months in close beta before open beta. They produce games like toy assembly line production.

This game (just like all NTES’s games) had been different. It starts external close beta on 6/15/2006. It had been adding tremendous amount of contents week by week. It is clear that this is going to be a game with excellent amount of game-playing.

But nobody knows about this game because, unlike most other Chinese companies, SOHU hasn’t advertise it yet.

As far as I can tell (could always change since the game is so young), the knock against it is (1). The graphics is not up to the 1st tier games and (2). No innovative features.

If SOHU positions this game as free-to-play and put marketing muscles into it, it could be the dark horse game in 2007/2008. Besides Tencents, SOHU is the company that has the most potential in marketing a game. It has the 2nd most popular portal (sohu.com), it has the larget gaming web site (17173.com), and the largest alumni community site (chinaren.com), all of these can reach plenty of PC gamers.

Anyway, it is going to into pressure testing on 3/22/2007. Pressure test had always been the last step before open beta.

The link:


SOHU had not disclosed when it will be in open beta yet. But my guess is probably sometimes in April or May.

For Sohu investors, this can be the surprise that will give the second half earning a kick because nobody think this game will amount to anything.

Thursday, March 8, 2007

Netease – XY3 – Ahead of schedule

During the 4Q Earning Conference call, Netease management said that XY3 will start internal close beta in 2Q2007. But from the following link (from Netease’s official website), XY3 development team will complete the rough draft of a complete XY3 game that allows for the internal close beta by the middle of March. Internal close beta means having company employees as the beta tester. In addition, they are starting to write the first expansion pact of XY3 in parallel. Don’t ask me why they are doing the expansion pact already, I am just the translator.

Link: http://gamebase.163.com/200702/frame_13.html

Clearly, XY3 is progressing nicely and is ahead of schedule.

Wednesday, March 7, 2007

NCTY – Guild Wars

It is an interesting game that is more like Quake arena than most MMORPG games. It went to open beta today in China. By the way, this game was released in the rest of the world on April 26, 2005.

That’s right, you hear me, April 2005, Almost two years ago.The following is a good review of the game:


An in-game game play video:


I think it is a very innovative game. But I am not quite sure of its success in China. This game has a great technology in that it is able to use a single server (or actually a server consists of many computers). Therefore, it allows for truly massive multi-player playing. Instead of limit to a server of 5000 users, you are really playing in a world of millions of players.

If only TX2 has that kind of technology, imaging how wonderful will that be when doing castle seige.

But back to Guild Wars, by doing single server configuration, it severely limits players interactions. The RPG part of the game are limited to quests, it plays almost like if you are playing a single player game or a local area network game during the quest.

The calling card of this game is not the RPG part, but the guild warfare. Players form little guild and fight it out with other guilds from all over the world. But then, it will be very similar to Local area network game.

There are tons of pirate servers that allows players to play multiplayer version of starcraft or warcraft for free in China, hard to see why would players pay.

In the west, NCSoft doesn’t make money from Guild Wars from players paying monthly fee, but buying expansion pacts. There is no way they can do that because of the piracy. I don’t know how NCTY will monetize this game.

For an innovative game like this, I do expect a widely successful open beta. But it will be interesting to see how this game fares in China after commercial operation.

Tuesday, March 6, 2007

Netease – TX2 – My prediction

Today is March 6th, 2007. It is almost a week since the start of open beta. Netease hasn’t annouced any users statistics yet. Nor has she done much marketing promotion. All she had done is to put up some ads on gaming websites.

But overall, it pretty much matched my expectation.

I don’t necessarily agree with Netease’s marketing strategy, but I think I understand why they are doing certain things at a certain way.

Self developed games have many advantages over import games. But it does have one disadvantage, it won’t be as stable as the import games at the beginning. For all the import games, they had been operated and in commercial operation for months if not for years in their home market. By the time the import games had arrived in China, all the bugs had been stamped out, the game plays had been balanced and the servers had been stabilized.

TX2 had been in development for 3 and a half year (almost unheard of in China) and in closed beta for 1 year, the game developers had done all they could. But there are something they can’t do until open beta.

When it comes down to it, by the time of open beta, Netease’s games will look like a half completed game while import games would look like well-polished games.

There goes the rationales for the difference in marketing these different types of games. For import games, open beta doesn’t serve as open beta in conventional sense. It’s more like free trial time. Like giving candies to little kids until the kids get addicted. Therefore, the major marketing is done before open beta to build momentum.

But for Netease’s game, they can’t do that. The game is only partially completed. They did all they could. But they still have to go through the “real” open beta development period.

For Netease, the real marketing push comes a couple of weeks before the game goes to commercial operation. That is when Netease feels most of the bugs had been removed and the game is somewhat polished.

For TX2, it is a statement game. Just like Quake in the US, only a limited number of users can play. Only players with recently purchased computers can play TX2. Netease is coming out with patches so more users with less powerful PC can play. But they can only do so much.

For import games, the time of open beta is extremely important to get users interested. The 1 year mark is also important for the import games because it determine whether the game has legs.

For TX2, the first 6 months after commercial operation is extremely important. If it can get by the first 6 months and still have a sizable player with new players coming in, it will be a successful game. The reason is after 6 months, after TX2 is on a level-playing field with the import games in terms of game readiness, the advantage of a self-developed game will start to show. If TX2 can survive the first 6 months, then Netease will have the advantage over imported games of been able to provide quicker patches, more frequent and more relevant activities, and faster reaction time to users complaints/requests. In addition, as time goes by, the number of potential users with acceptable computers will increase. The potential pools of users that can play TX2 will increase with time.

Given the above reasoning, we can construct a schedule that assumes a successful TX2:

3/1/07: Open beta. PCU = 60k.

Rationale: Very little marketing done so far. Most people had no idea what is TX2.

3/4/07: First Sunday. PCU = 70k.

Rationale: Shall be a little increase. But this is the Lantern Festival weekend, and most existing games have major promotions going on. Most players will stick with whatever games they are playing and TX2 is not going to get much increase this weekend.

3/7/07: Major competitor goes open beta.

Rationale: NCTY’s Guild War went to open beta today. I predict they will have a PCU=150k to 200k because of the aggressive marketing of NCTY. Besides, Guild War seems to be a pretty good game.

3/10/07: Second Sunday. PCU = 60k

Rationale: Because of the competition from Guild War, there will be pressures.

3/31/07: After 1 month. PCU = 100k

Rationale: At this point, I predict the game is ready. I predict this is when the major marketing push starts.

4/8/07: Announce date of Commercial Operation. PCU = 140k

Rationale: PCU will start to crash after Netease announce the date of commercial operation. Many players who were only in for the free ride will start to leave.

4/15/07: Commercial Operation: PCU = 50k

Rationale: Free play is over. But I hope the major marketing includes enough promotion that many players gets to play for free for the next few months.

10/14/07: 6 months after Commercial Operation: PCU = 70k

Rationale: By this time, the major marketing push had ended. If at this point, TX2 is still growing and have a stable user base, they are home free.

4/15/09: 2 years after commercial operation: PCU = 300k

Rationale: 6 months is the do or die point. If TX2 passed 6 months without losing vast majority of the users, they will have another block buster on their hand.

The above is my prediction. I will check back from time to time to see how accurate I am.

Monday, March 5, 2007

Netease - XYQ - Accelerated Growth

It is now confirmed that we have a new record for XYQ. Again, what is surprising is not the new record, but the size of the new record.

Link: http://xyq.163.com/2007/3/5/99_171422.html

The following is the record for the last year:

Date _______ PCU ____ % from last record ___ Comments
3/4/2007 ___ 1500k ___ 11% _____________ 2007 Lantern Festival
12/25/2006 _ 1335k ___ 0.4%
12/24/2006 _ 1330k ___ 1.5%
5/28/2006 __ 1310k ___ 1.6%
4/23/2006 __ 1289k ___ 4.1%
3/26/2006 __ 1236k ___ 4.7%
3/5/2006 ___ 1180k ___ 0.4%
2/26/2006 __ 1175k ___ 3%
2/24/2006 __ 1140k ___ 8% _______________ 2006 Lantern Festival
1/1/2006 ___ 1053k

The reason for the new record is because of the Lantern Festival and the new expansion pact that just came out (see my previous post for more details).

last year's great 8% increase powered XYQ to multiple record and a great run in the first half of last year. This year's 11% increase has the potential to do the same.

The stage is set, (and we need a few more smaller new records in the next 2 to 3 months for confirmation), to show that we haven't see the peak of XYQ yet!

I think we are going to have a great 6 months just due to XYQ alone! And considering that we will also have DaTang 2, FF2, TX2, and XY3 coming up, it will be a great 2007 for Netease investors.

Sunday, March 4, 2007

Netease - TX2 - FF2 - Game status

On 3/1/2007, TX2 went into open beta while FF with new game engine went to closed beta, so far both games seem to go fine.

On TX2, Netease came out with a new patch that seems to improve the game code. Games are much more playable for even average PCs. A big complaint involves little support for newbies. But it is something that can be easily cured by adding some simple programming codes. Or just write some tutorial on the game web site.

Again, I don't think Netease had really start the real marketing campaign for TX2 yet. But so far, it seems the game is pretty stable and there is no fundamental or catastrophic programming bugs. As an ex-programmer, it seems all the complaints by the players can be easily solved by modify little computer code fragments.

For Fly for Fun (FF) with the expansion pact (the one with the brand new game engine), I am pleasantly surprised by the stability of the new game engine.

The game engine is the most difficult part of a PC game (by far). There were 5 patches that came out in the last 3 days that attempt to improve the efficiency of the programming code. According to a poll on Netease's user forum, 15% of players feels the game is still too much of a resource hog, 66% feels improvement but still wish Netease can further optimize the code, 15% feels big improvement and is happy, and 3% feels extremely happy.

This is basically the first stage of the closed beta, the performance of the new engine is definitely beyond all expectation.

Netease - XYQ - New record

This is now 2am US central time on March 4, Sunday (4pm China time). It is pretty clear we are going to have another PCU record for XYQ today.

It is not surprising that XYQ will have a record on China's Lantern Festival (XYQ had a new record last year on the same festival), but the scale of the new record is surprising.

Netease hadn't announced the new record yet, but from the server reading, it not just break the record, but smash the record. It is surprising that for a somewhat old game like XYQ, it still can do this in such a convincing way. It looks like XYQ still have a long way to go.

XY2, on the other hand, is slowing fading. It will be perfect timing when XY3 come on board later this year. Looks like Netease timed XY3 just right. Not too fast (XY2 is not too old) and not too slow (people completely forgot the game).

For TX2, Netease had not announced the player statistics yet. But my guess is PCU of 60k on the first date of open beta (3/1) and 70k today (3/4). It will be interesting to see what the official PCU will be.


A test for now