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, June 5, 2008

TX2 – Commercial operation before Open Beta

My last post on TX2 can be found here:


In my last post, I mentioned that TX2 will start open beta on 6/6/2008. Well, it turns out it is not exactly right. According to the following announcement, it will still be closed beta on 6/6/2008:


Or, is it?

For a typical game, it starts out with game development. After the foundation is build and a lot of basic gameplays had been written, a game goes into internal beta. The beta testers are the workers of the game company itself.

After the internal beta, the game goes into a closed beta. During the closed beta, the beta testers are regular game players that don’t work for the company. The game characters of the closed beta won’t be saved after the game goes into commercial operation.

After one, two or three rounds of closed beta, the game goes into the final beta, the open beta. The difference between the close beta and open beta is that for the closed beta, the numbers of players are limited and are invited. But for the open beta, anybody can play. Therefore, closed beta is closed to the general public and are available only for the invited few (for example, the first 1000 players who applied). On the other hand, open beta is available for anybody. The game company has to make enough game servers available to accommodate any numbers of players who want to try.

During the beta testing, whether it is internal, closed, or open beta testing, players are supposed to play for free. The company only makes money after all the beta testing phases were completed and the game goes into formal commercial operation.

But there is an exception to the rule, for the free-to-play games, since the game is free, open beta is the same thing as formal commercial operation.

Of course, there are exceptions to the exceptions to the rules. For example, Sohu’s TLBB started to charge money for items right after open beta. But they have another formal commercial launch about 4 to 5 months after the open beta. In that case, the open beta for all practical purpose is really commercial launch and the formal commercial launch is really the first expansion pact. Sohu did it completely for marketing reason. Having two major milestones (open beta and commercial launch are two separate mile stones) rather than one (open beta and commercial launch is one combined milestone) allows Sohu two chances to put ads out there to attract game players.

For NTES’s TX2, we might have exception to the exceptions to the exceptions to the rules. From the above article, NTES proclaim TX2 will have another round of closed beta on 6/6/2008. But this closed beta has two major differences from other closed betas.

First, it is unlimited. Any players can play in this “closed” beta. You might be confused as how can this be a “closed” beta if this is open to everybody.

Second, the game characters players play during this closed beta won’t be erased. As I explained before, beta is for testing only. Everything shall start from the beginning after beta testing is finished so the game can start from the beginning. So how is this closed beta different than the official start of the game?

Actually, you can start to buy game items in amazon.cn already:


What do I think? I think 6/6/2008 is really the commercial launch of the game. If the game does not catch on at the beginning, NTES can have two more chances (open beta and commercial launch) for major marketing push to draw players to play TX2.

I think this is purely a marketing move by NTES.

Only in China will you see commercial launch before open beta!

By the way, there are more TX2 movie trailers to be downloaded:

The following is the official trailer. It is dated 05_04_08. Unlike other movie trailers, this one is completely cut from in-game graphics. Therefore, the computer graphic is not as impressive as specially made movie trailers for other games. But on the other hand, the quality of the in-game graphic is very impressive.


The following is the official trailer for weapons and skills for all eight disciplines. This is a kick-ass video. The top level skills (or special ability) for each discipline are absolutely gorgeous.


The following is the official trailer for costumes. Again, another very beautiful video.


The following is a player generated movie. It is 30 minutes long. Not much to say about its story line.


Also, a good article about what additional features TX2 will provide in the near future.


This article is a little to long for me to translate. But overall, TX2 is in good shape. There will be a lot of new playable features to be added after 6/6 to keep players busy for a while.

Wednesday, June 4, 2008

Another new game for Netease

My last post on XY3 can be found in the following:


No, this post is not about XY3.

Back in February, during the 4th quarter 2007 earning conference call, NTES management talked about another version of XY3, except that this version is free-to-play. The stock analysts in the conference call don’t seem very interested.

In May, during the 1st quarter 2008 earning conference call, the analysts don’t even bother to ask about this version of the game.

Well, I think wall street is under-estimating the importance of this new development.

First of all, I had always believed that it won’t be another version of an existing game. I think NTES will make it into a brand new game.

I am right. It will be a new game. The following are two articles. The first article is written by the developers of XY2 talking about there is minimal relationship between XY2 and this new game.


The second article is written by the developers of XY3 talking about there is minimal relationship between XY3 and this new game.


I predict NTES will treat this game as a new game. Just like the difference between XY2 and XY3. Even though they shared similar name, they are distinctively different games. There are two completely separate game developers. They have different schedules and their features are different. When NTES make advertisement, it never put both game in the same spot. It is either a banner ad for XY2 or a banner ad for XY3, never together.

I believe this new game will be the same.

In February, NTES manager talked about commercial operation during the second half of this year for this new game. I have no doubt the game developers would have no trouble making the deadline. But for marketing and scheduling reason, I think it would probably be some time next year.

On June 6th this year, TX2 will start to operate (or do them?). In addition, DT2 and FF3 would probably also going to start operation in the second half of this year. On top of that, there are talks of revamping the existing DT game later this year.

All of NTES’s new development will be ready in the second half of this year. For scheduling reasons and avoiding self-competition, I think NTES will delay one or two of these games into next year.

Tuesday, June 3, 2008

Quick Sohu games status update

My previous post on Sohu’s TLBB game can be found here:


This is just a quick update on Sohu games.

TLBB Quick Check

Over the weekend, I was wondering the effect of Olympics relay troubles and earthquakes had on the games in general and TLBB in particular. So I went back to my server monitoring to see if there are anything going on.

The trouble with the Olympics relay started in Europe around 4/6/2008. The earthquake occurs on 5/12/2008 in Sichuan. The 3 days mourning period is on 5/19/2008 to 5/21/2008.

From a quick check, by just adding the server counts of 3 Saturdays in April, and comparing that with 3 Saturdays in January, April’s count suffers a -4% decrease in ACU than that of January. It could be due to seasonal factor or it could be due to the trouble with Olympics relay were drawing many players to TVs.

Similarly, I did a quick check on May vs. February. By adding 3 Saturdays in May and comparing that of February give me a +7.7% increase from February to May. Its server statistics had been very strong after the 3 days mourning period. As matter of fact, TLBB most likely had another PCU record on 5/24/2008. I would estimate its new PCU would be around 650k to 670k and it occurs on 5/24/2008, the weekend right after the 3 days mourning period!

I am a little surprised at the strong momentum of China’s game market. Both major events (Olympics relay troubles and earthquakes) may have some slowing effect at the beginning. But the growth afterward had been accelerating. It is clear that China’s gaming market is still growing.

BO quick Check

Sohu’s Blade Online is still on-going. It is a very small game but it had been growing a little quarter by quarter. My server count had shown this pattern. In addition, it is going to have an expansion pact on 6/19/2008. It had been awhile since Blade online had an expansion pact.

Blade online is a small game. Nothing will make it a major title. But it is clear that it will continuing this growth trajectory for the next few quarters.

LDJ Quick Check

LDJ is going to be Sohu’s next major title. But there were zero information about it so far. That changed a couple of days ago. The official blog for the game had opened. Sohu provided a little information on this game. The blog can be found here:


There is still too little information for me to draw any conclusion yet. But it is going to be a 2D cartoon Q-style game. There are going to have a lot of cute and funny characters in this game. In the blog, the game developers put the game operation time at the second half of this year. But I think it is a little too optimistic. I will estimate that this game will start operation either by the end of this year or beginning of next year.

Monday, June 2, 2008

New PCU record at XY2

My last post on XY2 can be found here:


My last post on XYQ can be found here:


There are a lot of activities happening in NTES right now. It is going to take me a few articles to go through them.

NTES’s XY2 is a game that really surprised me. It is a 6 years old game. Even NTES thinks it is a dying game. But it is becoming clear that it now have a second chance. As a matter of fact, it is not just growing, it is accelerating.

On 6/1/12008, NTES got a PCU record for XY2. Its new record is PCU=544018. See the following link:

It is amazing how fast is XY2 growing.

According to the 1Q earning conference, the PCU for 4Q 2007 is 387k, and for 1Q 2008 is 385k.

So far in the 2Q 2008, the new PCU is 544k.

XY2 is not just growing, it is accelerating. What is even more interesting is that it occurs just a few weeks after the great earthquake.

Furthermore, the ninth expansion pact for XY2 shall be out in a month or so. Unlike most other Chinese games, NTES doesn’t develop expansion pact often. XY2 has a new expansion pact about every 9 months (or 9th in 6 years).

It is amazing that XY2 is able to grow so fast without coming out with an expansion pact yet.

It is almost like that most XY2 players had given up on XY2 by the middle of last year. But when NTES comes out with XY3, most XY2 players had a change of heart and said “not so fast, I changed my mind. I want to play the old XY2 again”.

If anything, this shows that in China, players values community much more than they value fancy computer graphics, beautiful eye candies, and advanced game playing features.

Also, on the same date, 6/1/2008, according to my server monitoring, XYQ is having a near record breaking day for PCU as well.

The strength of both XY2 and XYQ (a 6 years old and 4 years old title) really surprises me.


A test for now