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.

Friday, January 18, 2008

XY2 & XY3 Server Status

My previous post on XY2 and XY3 is here:


From my previous articles, NTES originally planned to use XY3 to replace XY2, but they changed their mind and keep both XY2 and XY3 as separate games. Both game have different development teams.

In the 2nd quarter of 2007, XY2 has a PCU (Peak Concurrent Users) = 505k. In 3Q2007, it has a PCU = 305k.

In this article, I will give a chronological order of the XY2 and XY3 development.

For XY2, the last PCU record occurred on 10/1/2006. It had a PCU = 603k. But XY2 is an old game and is slowly dying. It can never get another PCU record again.

On 4/15/2007, it is the last time XY2 has a health PCU = 482k. After that, XY2 is clearly aging.

On 5/20/2007, it is about the time XY3 went into external closed beta. On that date, XY2 has a PCU =304k.

From then on, users can get to play XY3 for free (XY3 is in beta testing) and a lot of XY2 players start to migrate to XY3.

Therefore, on 9/9/2007, the Sunday prior to XY3 went into commercial operation, XY2 has a PCU = 190k.

But even after XY3 goes into commercial operation, a lot of XY2 players are revolting against Netease. A lot of XY2 players don’t want to migrate to XY3. They already had very high level player characters. Even though Netease promise them that they can migrate their player characters to XY3, a lot of XY2 users think that their characters wouldn’t be as powerful in XY3.

Netease relented. On 10/8/2007, Netease announced that they will keep XY2 alive. Rather than using XY3 to replace XY2, Netease will keep XY2 and XY3 as two separate games. There will be two separate development teams to develop those two games.

After that, XY2 is start to grow again. On 1/13/2008, the last Sunday, XY2 has a PCU = 294k.

On the same day, 1/13/2008, XY3 has a PCU = 152k.

If we adds the PCU of both XY2 and XY3 together, we will get a PCU = 446k on 1/13/2008.

Now, that is significant higher than the 3Q PCU of 305k. It is getting close to the 2Q PCU of 505k.

At this point, it is clear that both XY2 and XY3 are growing again. XY3 is growing by attracting a lot of non-XY2 players. XY2 is growing by attracting a lot of old XY2 players (who left 1 or 2 years ago) back.

After all this, by screwing up the execution, Netease got lucky. Now, from a dying title, Netease got two (or really 1.5) major titles. XY2 will keep on going to be a major title for probably another 2 to 3 years. At this point, with a PCU of 150k, XY3 is a very good hit. But it can definitely able to grow to be a major hit.

Chinese market almost amazes me.

In the United States, it is always important to follow the pre-determined milestones on schedule. But in China, it is probably more important to be nimble. Rather than sticking to the work plan and schedule, it is probably better to continuing modifying since the market condition in China changes so fast.

Wednesday, January 16, 2008

FF2 Status

My last post on FF2 is as follows:


From that article, FF2 was supposed to go into closed beta on May 2007 and open beta on August 2007. Clearly, it didn’t happen. It hasn’t go into closed beta yet.

Some news starts to come out. From the following link, http://ff.netease.com/viewthread.php?tid=3437480&extra=page%3D1

FF2 is going to start limited closed beta soon. But since they are only going to invite 50 to 100 players and only have the first 15 levels of game plays, it looks like very beginning of closed beta stage. They might have 1 or 2 more closed beta testing after this. After that they will definitely have open beta after that.

Everything is pure guess on my part. But we could be seeing 3Q or 4Q 2008 for the commercial operation of FF2.

At this point, since TX2 is going to be the first free-to-play game for Netease, the importance of FF2 is significantly reduced.

But FF2 could still be a moderately popular game. It will probably be a game that get lots of users, but I don’t think it will be a major hit as far as revenue generation goes.

Tuesday, January 15, 2008

TX2 will be free-to-play

My last post on TX2 is as followed:

This is certainly unexpected. Just a few days after my last update on TX2, Netease announced that TX2 will be a free-to-play pay-by-item game.

See the following link:

The article said that Netease CEO announced that TX2 will be a free-to-play game. It will be start beta right after the Chinese New Year. It is expected to be in commercial operation during the 1st half of 2008.

I have to say that this is a great news to Netease investors.

If TX2 is a paying game, it is competing with World of Warcraft. From my previous articles on TX2, I predicted that it will be out in the 3Q2008. And I also predict that this game might surprise people.

But now TX2 is going to be a free-to-play game. The competition becomes much weaker all in a sudden. TX2 is going to be the best free-to-play game in China. I have no doubt that this game will be a major hit. On top of that, this game will be out in the 2Q 2008.

Excellent news.

Sunday, January 13, 2008

DT Status

My previous post on DT can be found here:


DaTang was a big disappointment for Netease. It is still in operation. But there is very little players playing this game. There is hardly any new content being developed and Netease is not marketing the game to attract new players. Netease is busying developing DaTang 2 as the first major free-to-play game from Netease. The original thinking is to make DT undergoing a slow and graceful death so that DT2 will replace it when it is ready.

But interestingly, I think there is a complete change of thinking on DaTang within the management of Netease.

The developer of DaTang announced the new direction of development for DaTang. It is very short but has tremendous amount of information. The link is as follows:


The developer of DT had been hinting of new direction in several postings in the last two months. Together with the above posting, I am starting to get a more complete picture.

My translation and my though is as follows:

- There will be no new contents announced until Chinese Spring Festival (Feb 7th, 2008).

- During November and December, 2007, Netease hired a lot of new programmers and developers to DT’s development team.

- Major contents will be released around Spring Festival.

- Netease will start major marketing push for DaTang after the Spring Festival.

- A big area of the new content is to provide more material for the new players.

- More activities.

- More features.

I am starting to get a full picture now.

Based on my server count, it is clear now that XY2 and XY3 had been successful. Originally, Netease planned to use XY3 to replace XY2. But now, both XY2 and XY3 are doing great and are two stand alone games.

XY3 is used to attract new users and XY2 is used to keep the old players. It is clear based on the server count that the combination of both games had exceeded the old XY2 by itself.

It is interesting to observe the Chinese market. Unlike other market, Chinese don't seem to mind playing the prequel and sequel at the same time.

I believe Netease is going to do similar thing with DaTang. Rather than using DT2 to replace DT, I believe Netease is going to make these two games separate (though related) games. DT will be a paying game while DT2 will be a free-to-play game.

Like XY2 and XY3, both DT and DT2 will be developed by two separate and distinct teams. DT2 is probably not going to be ready until 3Q or 4Q. But Netease is going to do some major push for DT after February 2008.

2008 is going to an important year for Netease. XYQ is still growing (last PCU record occurred on 12/2/2007), though slowly. XY2 is starting to grow again. XY3 is also growing. They are going to do a major push for DT in the 1Q and 2Q. After that, TX2 is going into commercial operation. FF2 will probably go commercial some times in the first half of 2008. Finally, DT2 will probably be out in the 2nd half of 2008.

And let’s not forget about the Olympics and all the advertising dollars that will go to Netease (as the number 3 portal in China) as a result.

2008 is going to be an interesting and profitable year for Netease.

Friday, January 11, 2008

TX2 In-game graphics

There are a little more information on TX2. My previous post on TX2 is as follows:


One of TX2’s graphic designer was interviewed. As expected, he said the new TX2 will be very beautiful. I won’t provide a translation for it since it really doesn’t add too much.

But it also provides several in-game graphics. The first link has the graphics of several game characters:


The second link has graphics for the in-game sceneries:


As you can tell, the new TX2 is going to be a very beautiful game. I will say more beautiful than WOW (World of Warcraft) and definitely more Chinese.

Of course, the big question is whether these graphic complexity can be supported by entry level computers. If average Chinese’s PC can play TX2 with this kind of graphic details without any lag or stutter, then TX2 will be an awesome game.

At this point, WOW is the only major paying-3D game in China. There are a lot of good 3d games, but they are all free-to-play games. But WOW is starting to get a little long in her tooth. It is about time there comes another major paying 3D game with game playing features similar to WOW. If that game is Chinese centric, it would be even better.

If TX2 solves some technical issues and make a lot of interesting side-quests, it could be the first new paying game that hit major in the last two years. In the time where most major hits are free-to-play, TX2 could really surprise people.

Thursday, January 10, 2008

TX2 Status

My previous post on TX2 can be found here:


Netease’s TX2 developer answered some questions regards to the new game. The link is as follows:


I will translate the important point.

- There will be a lot more contents.

- A lot more main quests.

- Allows more costumes and in game items.

- Allows the players more options to turn on/off various graphics options.

- Much more Player vs Player (PvP) features. In addition to the existing features of castle siege and gang-warfare, it will adds three new PvP features, battlefield, fighting ring and beast fighting ring.

- Closed beta will start after the Spring Festival (2/7/2008).

My impression is as follows:

One of the main knock against TX2 before is that the game is too much for the players with old computers. It looks Netease is taking a three-prawn approaches. It will use the latest version of the game engine. It will re-write the game from the ground up, but this times emphasize on the game resource allocation. Finally, it will allow players more options that will allow them to turn off graphic options dynamically when the players are in the middle of major battle field. Hopefully, this will solve this problem.

I was a little surprised at the emphasis on the PvP features. But after further reading, it starts to make sense. The older PvP features (castle siege and gang warfare) are designed specifically for major gangs and tribes. The old TX2 was a game for global domination. But the new PvP features are more for individual and for small groups.

World of Warcraft is a game that had thousands of side-guests that will keep players busy for long time. In addition, it has a lot of PvP features that keeps the players interested after they finished the side quests.

The older TX2 was a completely different game. It was a global domination game that are designed for big gangs (or tribes) that have hundreds or thousands of members.

I always wished TX2 can be a WOW clone. If TX2 adds many more side-guests, the transformation will be complete. A WOW clone will give TX2 a good chance to be a major hit in China.

They are going to start closed beta in mid to late February, 2008. The closed beta could be 2 to 4 months in duration followed by 1 month of open beta.

My speculation is we might be seeing commercial operation somewhere either from middle of 2Q to the end of 3Q.

Note: From the following link, the 2nd closed beta will most likely be early March. The link:


Tuesday, January 8, 2008

CNNIC Blog survey report:

CNNIC came out with a survey report on China’s 2007 Blog. To give some background, I also find its 2006 report. The following is the important part of the report:

For 2006 report, the link is as follows:


Internet user: 123 million

Blogger: 17.5 million. (14.2% of internet users)

Active Blogger: 7.7 million (44% of Bloggers)

Blog: 33.7 milion

Blog reader: 75.6 million (60% of internet users)

48.9% of Blogger are male and 51.1% are female.

Didn’t have survey result on who is the most popular blog sites. But from the report, it seems Blogcn, Sina Blog, MSN blogs, QQ blogs, Bokee Blog, Tianya Blog, Blog.com.cn, Netease Blog, Sohu Blog, Mop Blog, and Baidu Blog (in order of popularity) are the most popular blogs.

For 2007 report, the link is as follows:


Internet user: 180 million

Bloger: 47 million (27.6% of internet users), or about 170% year over year growth.

Active Blogger: 16.9 million (36% of Bloggers), or about 120% year over year growth.

Blog: 72.8 million

Didn’t talk about who is the most popular blog sites. But it implies the portals are very popular for the bloggers. It said QQ space, Sina Blog, Netease Blog and Sohu Blog are very popular.

From the report itself, it is hard to tell if portals such as Sina, Netease and Sohu are gaining market shares from the standalone blog companies. But if they grow over 120% year over year, then we know they are gaining market shares. Hopefully, they will published the year over year increase number for the blog during their next earning conference.

Monday, January 7, 2008

Sohu starts major hires for its game division

My last post on Sohu’s games such as TL is as follows:


On 12/27/2007, Sohu starts major hiring for their gaming division. There is a total of 35 different kinds of positions they are looking for.

The details is as follows:


  1. Customer Support for TLBB. 100 positions
  2. Assistant. 3 position
  3. Database programmers. 5 positions.
  4. Game management engineer. 5 positions.
  5. 3D graphics artists. 20 positions.
  6. Graphics designers. 20 positions.
  7. Gameplaying designers. 20 positions.
  8. Game programmers. 40 positions.
  9. Linux programmers. 5 positions.
  10. QA (Quality Assurance) engineers. 40 positions.
  11. Database (DBA) management. 3 positions.
  12. Client gaming programmers. 10 positions.
  13. 3D engine developers. 10 positions.
  14. Game server management engineers. 10 positions.
  15. Game support assistant. 5 positions.
  16. Game plot authors. 5 positions.
  17. Game promotion area managers. 10 positions.
  18. Business administration support. 2 positions.
  19. Lawyers. 3 positions.
  20. Gaming market researchers. 10 positions.
  21. Ads. Designers. 5 positions.
  22. JAVA programmers. 3 positions.
  23. Web programmers. 10 positions.
  24. Game promotion department. 20 positions.
  25. Game training managers. 5 positions.
  26. Game management department. 3 positions.
  27. Personnel management. 3 positions.
  28. MIS engineer. 3 positions.
  29. Statistical Analysis. 5 positions.
  30. Client services quality control. 5 positions.
  31. Web developers. 5 positions.
  32. Anti-pirate servers specialists. 5 positions.
  33. Game analysis specialists. 5 positions.
  34. International branch product managers. 2 positions.
  35. Salesmen. 20 positions.

It adds up to 425 new hires for their gaming division.

What is most interesting is that they are adding 100 new customer supports for their existing games (TLBB and Blade Online). It is pretty clear its hit game TLBB is growing exponentially.

Sohu managers may be talking about TLBB leveling off after the 1Q2008. But their action (major hiring) is telling a different story. I think the manager is purposely talking down their success in TL during the earning conference so that they can come out with earning surprise in the future.

In addition, they must be cranking up their new game development with those 300 new game designers and programmers.

In the positive way, I think TLBB will surprise through the next few quarters and won’t level off for quite a few quarters.

On the other hands, Sohu’s expenses will go up as they starts to develop many new games.


A test for now