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.

Wednesday, April 7, 2010

3 new NTES games within the next 10 days, YSG, DT2, and CSXY

One can find my last NTES related post here:


Right now, everybody is waiting to see when GAPP and Ministry of Culture will approve World of Warcraft』s next expansion pact. But everybody is missing two much more important recent developments.

Within the next 10 days, three new games will enter unlimited Closed Beta with permanent player statistics. Unlimited means anybody can play. This 「Closed Beta」 is not by invitation only. In addition, all player statistics will be permanent. That is, player statistics will not be erased at the end of this 「Closed Beta」. Thus, compare to the west, this is really commercial launch.

On the other hand, I think there will be minimal marketing for the 「Closed Beta」. NTES had been well known to be penny pinching on marketing.

YSG will enter unlimited Closed Beta with permanent player statistics on 4/9/2010. YSG is a 2.5D Turn based MMORPG game, based on Tale of three countries. It will be a free to play. But it is not a true item-based game. There are no items to purchase in this game. On the other hand, player can pay to buy 「essence level」 (精力). Any time a player wants to get any goodies (such as experience, in-game currency, in-game items, etc.), he has to use up some of his 「essence level」. One can still play without paying any money. But he won』t get any 「essence level」. Thus one can』t get experience or item without 「essence level」. One can also get 「essence level」 through playing as team leader (or more like baby-sitter to other players). There is only one item in the online store, the 「essence level」, you can』t buy any other items in the online store. For PK (player kill), it incorporates 「Battle Chess」 style of play. It emphasizes the usage of battle formations. Therefore, there is a lot of strategy involved in player combat.

Therefore, this game is really NTES』s attempt to investigate another paying model (other than time-based, and item-based).

CSXY will enter its unlimited Closed Beta on 4/15/2010. This closed beta will have permanent player statistics. This game』s development starts in 2005. It is a turned based 3D game, based on BigWorld game engine. It will be a free to play, item-based game. It will be the third game behind the two blockbusters, XYQ and XY3.

DT2 will enter its unlimited closed beta on 4/16/2010. Again, this closed beta will have permanent player statistics. It is a 2.5D real time game. It will be a free-to-play, item-based game. This game emphasize player PK. This game encourages PvP but there are also some PvE elements. Basically this is a game for PK.

DT2 has promotional video for its closed beta. One can find it here:


I had always defined a game to be a blockbuster if its PCU can break the important 500k barrier. For MMORPG (without counting the casual game), one can count all the blockbusters in China with two hands. NTES has three of them, WOW, XYQ, and XY2.

Of NTES』s other existing games, TX2 will probably reach blockbuster status by 2011 (it probably has PCU closed to 300k and is still growing strongly).

But out of about 10 new games in the pipeline, I can only see two games that have the chance to reach blockbuster status. These two games are DT2 and CSXY.

A new WOW expansion pact is important in that it will probably give a 10% to 20% kick to the amount of WOW players. It will also indicate the closure between the unpleasantness between GAPP and NTES. But the additional revenue will be shared between NTES and Blizzard.

A brand new blockbuster on the other hand will contribute much more to the bottom line. Somehow, the developments of these two games (DT2 and CSXY) are completely ignored by Wall Street.

At this point, there doesn』t seem to be a major marketing push for the 「Closed Beta」. NTES will probably using this period to continuously modify the game design. In a few months time, NTES will probably conduct a major marketing push for the 「Open Beta」.

But in two to three weeks, we would have some indication of the potential of these two games.

Thursday, March 25, 2010

Players revolt in WOW

My last WOW related post can be found here:

In the last three days, there is a mini-player revolt for Netease's WOW. Sina's game channel had a special section on this revolt. Sina's section can be found here:

I will provide a quick summary of what happened below:

On 3/23/2010, an individual WOW player hook up with a WOW clique to do a raid in WOW. After they kill the in-game monster, the clique took all the in-game reward (gold) from the monster. The individual felt he is victimized by the power clique (at least according to that individual).

Further negotiation results in the clique threaten to "kill" the individual.

That evening, when that WOW player logged on to the game, he is informed that his account is being frozen by NTES (the WOW operator).

That player complained on a popular instant messaging channel. Things like this happens a lot and a lot of individual players had been victimized by the power cliques (or clans).

Thing like this happens all the time and nothing usually happens. But somehow, this time, this player's circumstance somehow draw the attention of a lot of other WOW players.

These players then went to WOW and start to attack that clique. After the angry mob finished off the clique, they start to attack the game operator (NTES). For a while, all of in-game communication channels are dominated by angry players accusing NTES of negligence. That in turn attracted more players' attention.

By the morning of 3/25/2010, several tens of thousands of players were talking about this at various game forums. By the morning of 3/25/2010, NTES contacted that individual player and told the player that his account was frozen not because of any attack by a power clique, but because he had used illegal game point purchased from an illegal source. In addition, his account is only frozen for one day. Three will be no other punishment to that individual player.

Satisfied, that player get on the instant message channel and told the crowd that this issue had been resolved.

But the mob is not satisfied and the mass protest continues.

As of this evening (3/25/2010), accounts of several of leading protesting WOW players have been frozen.

Sina had hired a lawyer to provide legal advice to support the protesting WOW players. Oh, by the way, SINA and NTES are competitors.

While I don't think this thing has any long term affect, it is still interesting to follow this development.

Friday, February 12, 2010

Coiled Spring - NTES

My last WOW related post can be found here:


Now that WOW is finally being approved by GAPP. Better yet, NTES is probably not going to get panelized. Let me look forward to see how the fundamental is going to shape NTES.

Sometimes bad news worked out for the best.

The whole WOW-GAPP episode was definite a bad news for NTES last year.

But as we get to 2010 and as WOW is now officially approved, everything is most likely going to work out for the best.

NTES's TX2 is a competitor to WOW. If WOW got approved last year and the expansion pact (Wrath of the Lich King) got approved, it would had squeeze all the oxygen out of TX2.

As it turned out, NTES can't get WOW approved and it turns all its energy in TX2. As a result, TX2 has established a thriving and highly devoted fan base, it is on its way to become the next mega hit in China. TX2 has got to the point of being able to stand on its own feet now.

Now that NTES has got its license to WOW approved, it has three mega (WOW-related) events coming up. It has two new expansion pacts (Wrath of Lich King and Cataclysm) and Starcraft 2 coming up. In normal time, these events are staggered about 2 to 3 years apart. Each of these events would had been the dominate events in China’s gaming world.

Now, because of the unique circumstance (or incompetence) of GAPP, all three events are being squeezed into one year. In other words, 6 to 7 years of game changing events are being squeezed into one year time. For the next year to 18 months, NTES is able to release the Wrath of Lich King expansion, followed by Starcraft 2 and finished by coming out with the Cataclysm expansion pact.

NTES is going to have all of China’s gaming market all to itself in the next 12 to 18 months.

Better yet, NTES doesn’t have to sacrifice TX2 for it.

NTES has about 15 major games in later stage of development right now. But two of them has early signs of being the next mega hits. They are DT2 and CSXY. None of them are the direct competitor to WOW. Both of these two games are probably going to out within the next 12 to 18 months.

NTES is already dominant in the 2D cartoonish turn-based game, it is going to be dominant in 3D mythical games with WOW and TX2. With Starcraft 2 and the new battle.net, it is going to carve out a new area (that does not exist right now) in on-line battle matching. DT2 is targeting directly at the martial art games of PWRD, GA, and CYOU. CSXY is going to create another new area that does not exist in China’s gaming world.

18 months from now, there is a good chance NTES would achieve near monopolistic position on virtually all the different areas (except casual games) of China’s gaming market.

I don't think I could have been more optimistic about a company than I am about today's NTES.


A test for now