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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.

Tuesday, January 6, 2009

XY2 4Q2008 Prediction

My last article on XY2 can be found here:


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 2nd 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.

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