XY2 4Q2008 Prediction

My last article on XY2 can be found here:

http://chinese-net-gaming-stock.blogspot.com/2008/09/ntes-xy2-status-expansion-pact-out-on.html

There was an expansion pact released on 8/24/2008. Therefore, one do expect a couple of strong quarters (4Q2008 and 1Q2009).

As expected, on 10/1/2008, there is a new PCU record of 897k for XY2. XY2 is on its way to become NTES's 2^nd million player mega-games.

The acronyms first -

ACU = Average Concurrent Users

PCU = Peak Concurrent Users

QoQ = Quarter over Quarter

YoY = Year over Year

Now, let's do the 4Q2008 estimate for XY2.

The server counts for the XY2 can be found in the following table:

There are 3 months in a quarter. Each month has either 4 or 5 weeks. I only use 3 days in a week. I don't do server count every weekend. I only put in the number where I have a server count in both quarter. I also pick 3 days of holidays in this calculation.

As one can tell, there are a lot of open spaces in the above table. The reason is during the 3Q2008, there are errors on XY2』s main web site. For more than 1 month (August), it won't reflect XY2』s server status.

Because of the recently released expansion pact (on 8/24/2008), I expected a strong quarter. As I checked the server every week, I can sense an extremely strong quarter (for the months of November and December, the game is virtually completely full during peak time of the day). But a +24.24% QoQ increase is just out of this world. I had to double check the number to make sure I made the correct calculation.

Chinese gaming industry is full of surprises. For such an old game, a game that NTES left for dead a year ago, I don't think anybody thought it can ever have this kind of growth. I am glad NTES changed its mind and bring XY2 back from the dead.

From the 3Q2008 earning conference, the ACU for XY2 was 170k for 3Q2008 and 149k for 2Q2008. Therefore, a 24% in ACU will give the estimate for 4Q2008 to be 211k.