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.

Sunday, March 31, 2013

China's 3 Telecoms vs. Tencents, part 2. It doesn't look good for Tencents


One can find my last post on this subject here:


Well, it is not looking good for Tencents and its awesome killer application, WeChat. Today, the head of the Ministry of Industry and Information Technology (MIIT) of China gave hints that he is going to charge money for users who uses WeChat.

See the following article (in Chinese):


In the article, the minister of MIIT gave the typical politician double talk on the subject. He said that " It is reasonable for the Telecom operators to charge WeChat users money. But we have to make sure there is no monopoly situation and to protect Tencents."

MIIT is the foremost government agency for this area. Unless, Tencents can convince the Premier or the President, it is looking more likely that Tencents is going to be forced to charge users fees for using WeChat.

Note that it is entirely possible that the telecom operator can develop similar product but won't charge users money (or gave discount rate), it could meant the end of WeChat.

I am not predicting the end of WeChat. But Tencents is definitely in for some struggle.

For Sina, it could meant a great opportunity to cut into Tencents lead in this area.

end




Thursday, March 28, 2013

China's 3 Telecoms vs. Tencents, part 1. Is Tencents in trouble?


In the past two years, two significant developments occurred in China's internet industry. One is Weibo by Sina and another is WeChat by Tencents.

Both introduced incredible functions and are revolutional to both the online and mobile internet. This article is about Tencent's WeChat.

WeChat is the closest thing to Facebook in China. It is probably the only thing developed by China that is unique (Sohu's Sogou Pinyin Input system is another, but that is in a different league).

It is getting even hotter than Weibo. But Tencent's WeChat might just hit the nerve of entrenched government state own companies.

WeChat started in online internet. Since China's online industry is largely private, competitors can only defeat WeChat by providing better products. None is successful so far. But as WeChat starts to branch out to the mobile world, it gets right up to the state monopolies and their government friends.

The three Chinese mobile state own companies are China Mobile, China Telecom and China Unicom. When WeChat starts to expand to the mobile internet, it starts to gobble up products (Wireless Value Added Products) sold by the three state own companies. The three telecom companies are not happy. But they are not good at developing new products. However, they are good at conducting monopolistic practices.

There are a lot of rumors recently that talked about how the three companies are going to attack Tencent's WeChat. Some article below:


I don't have time to go through all the rumors (which I think are trial ballons floated by the 3 telecom companies). But one most hideous approach is to force Tencent's to pay the three telecom.

Imaging two companies competing. Company A built a superior product. Company B is not capable. But Company B has "connections". So Company B force Company A to pay Company B some money any time a user uses Company A's product.

I though even in China, this is too much. But I guess not. Today, an official from NDRC said, in an official news article, that WeChat shall charge users money.

Now, this is significant. NDRC is National Development and Reform Commission and it fall directly under the State Council. State Council is the administrative organ in charge of all internal affair in China. It is headed by Premier (China's number 2 guy).

The article where the NDRC official said that WeChat shall not be free:

At this point, Tencent's Wechat is in a very dangerous place.

This might also affect Sina's Weibo. But for Weibo, it could go either ways. If the Telecoms leaves Weibo alone, it might just give Weibo a chance to expand into WeChat's space. Then Weibo would truly be a super product (it is already a super product). But if Telecoms wants to target Weibo, it could also spell trouble for Sina. But overall, I think the chance of Telecoms attacking Weibo is very low because the nature of Weibo itself (it is hard to write Weibo messages from mobile phone).

Tencent has powerful friends itself. So this is not the end of it. I will follow this since this could complete change the landscape of China's internet industry.

end.




Tuesday, March 26, 2013

China's MOBA battle, part 1 - DOTA2 by Perfect World is rumored to be released in China on 4/15/2013


I don't think I had ever written about the Perfect World before. This will be my first article on Perfect World. Perfect World (PWRD) had been doing badly. I had not being following PWRD very closely. It used to be the number 1 company in China in terms of technology. But it just can't turn that early lead in technology into popular games. Now, NTES and CYOU had caught up with it on the game engine development. It also is not good at getting interesting import games.

I am still not sure about the prospect of PWRD. But I am certain in the next major game genie in China.

In most of the earning conference calls from all the Chinese gaming companies, I kept on having analysts asking Chinese gaming companies in the new development of web games or mobile games.

In my opinion, many Wall Street analysts put way too much emphasis on the web games or mobile games. Frankly, Chinese companies are horrible in developing anything new. A truly successful web game or mobile game is probably still 2 or 3 years from now.

But in the next two years, a brand new genre that will truly be immensely popular is the MOBA games. MOBA game is the Multiplayer Online Battle Arena game. One or (at most) up to three major MOBA games will operate in China.

At this point, it is still not clear who are the major players. For now, Tencent, Perfect World, Netease, and Activision are most likely the major combatants. But when it becomes more clear who is doing what, I will write a series of articles.

DOTA2 is a major MOBA game developed by Valve. Last year, PWRD licensed the game from Valve. Today, there is a rumor that DOTA2 will be allowed to play in China on 4/15/2013. See the following link:


This is major development for PWRD. It is still too early to tell if DOTA2 will be a blockbuster in China. But it had been a long time for PWRD to have a potential blockbuster in its staple.

end



Friday, March 22, 2013

Ctrip starts selling train tickets, part 2: status update


My last post on CTRP talks about that CTRP starts to sell train tickets. See the following:

It was pretty clear that it is directly related to China dismantled its biggest monopoly, as well as its biggest fiefdom, the Ministry of Railroad. See the following:


It had been 11 days since CTRP started train service. This is just a quick status update.

First, on 3/16/2013, or, only 5 days after it started to sell train tickets, Ctrip stopped the train ticketing service again. See the following:


Most Chinese thought that CTRP was being stopped by the old monopoly, the old Ministry of Railroad. But a few days later, Ctrip restart the train ticketing service:


Therefore, it was probably just technical related issues that cause it temporarily stopped the service. But now the service is back on. Note that all tickets requires 20 RMB insurance. It is possible that is how CTRP makes money on the tickets. It might split the insurance with the insurance company.

Since anybody can buy the tickets from the Ministry of Railroad (or whatever name the new company is going to be) directly, a customer will have to pay 20 RMB extra to get it from CTRP. Thus, it is not expected to add much revenue to CTRP in the short term.

But it still could be significant in the future.

Ministry of Railroad is going to be breaking up into two identities, a regulatory entity that is part of Ministry of Transportation and an operating entity, a Chinese railroad monopoly.

But it is possible that the regulatory entity will start to break up the ticket selling function of the monopoly. If it becomes the case, CTRP can really benefit. Especially it is starting to gain experience in working with China railroad company.

This case is a perfect demonstration of that China is anything but a law-based society. In this society, most often the one who is willing to break the rule (and more importantly, one who is smart enough to know which rule to break) will probably come out ahead.

At this point, Chinese government is still trying to break up the old bureaucracy. It is definitely not worry about something so small like ticket selling functions. I am pretty sure CTRP is doing something not strictly legal. But it is also probably not illegal since the old entity no longer exists.

At this point, CTRP is the only company that is doing this. it will be interesting to see if others follow.

Anyway, I will have to keep on following this story. I don't think it will help CTRP much in the short term. But the potential bounty in the future could be tremendous.

end


Tuesday, March 19, 2013

Netease's replay to CCTV 315 investigative report, part 3


One may find part 2 of this article here:

From my write up in part 2, CCTV actually had a pretty good target. There are about 4 or 5 3rd party companies that somehow grab the user information as contained in the cookie file through back door. It is not very clear how those 3rd party company did it.

CCTV actually make this reporting much weaker by turning it into a hit piece against Netease. It is not clear why will CCTV want to do that.

I can only think of four reasons why will CCTV wants to do this.

1st possibility: It is part of a larger plot. Government is trying to send a signal to Netease and its News editors. Netease News is famous in China for being the "News with Attitude". But the possibility for this is very low. Government can just summon NTES's CEO to Beijing for some tongue lashing. In addition, other government agencies would have gotten into the act. It had been 5 days and no other government agencies had any corresponding measures against NTES. Therefore, this possibility is very low.

2nd possibility: CCTV's 315 editor is not professional. Actually, this is not the case. The overall CCTV shows may be of low quality. But the show 315 is actually of high quality. I personally think this possibility is also very low.

3rd possibility: CCTV's 315 show actually have more materials in their pocket. I also consider this possibility is very low. Why would any editor want to make their show of low quality to begin with? That doesn't sense at all. One could hold on to some evidence while still coming out with high quality product. 315 show editor is too smart for that.

4th possibility: This is the one I considered to be by far the most probable. CCTV's editors coming out with a very good investigative reporting on how unscrupulous 3rd party companies stole personal user information through the back doors of China's four major portals (Sina, Sohu, Ntes, Tencent). But the editors is being overruled by their managers. Sina, Sohu, and others purchased advertising slots on CCTV. All except one, Netease, are major purchasers of CCTV's advertising slots. For commercial reason, CCTV managers forced 315 editors to change the original program into a hit piece against Netease. I think the reason why the central themes so ambiguous is because 315 show editors have to change the focus of the show at the last second. The show never address the central themes. Why does NTES's emails have anything to do with a bunch of 3rd party companies steal users' cookie file? Why will NTES want to let those 3rd party companies steal their internal company information?

Of course, the above are only my conjecture.

Finally, Netease announced its official position on 3/16/2013:

I will translate below:
"Netease always protect user's privacy. As an company listed on NASDAQ, Netease has very strict system and technology to safe guard users privacy. We always obey all laws and industrial standards. We completely forbid any Netease organizations or Netease employees to read users email content. We always protect all citizens' constitutional rights of free and private information.

After reviewing CCTV's investigative reporting, and to completely remove any doubts by our users, Netease had established a special investigative team to investigate this matter. We will provide the result of our investigation at the earliest time. Netease wants to thank our users and CCTV for their attention and criticism. We offer our utmost gratitude for your continuous oversight."

Personally, I think it is a great reply. While I am pretty sure Ntes read the content of their users emails, it is machine that does that, not any individuals or organizations.

China is still a communist country. CCTV has the obligation to provide it users "proper guidance and to educate its users so the users can have the proper thoughts". CCTV and Netease News are not equal.

CCTV is still the most watched programs by far in China. Netease really shall spend some money to buy advertising slots on CCTV's shows. Hopefully, that will be the end of that.

end.

Netease's Reply to CCTV attack, part 2


My last Netease article talks about the attack from CCTV investigative reporting. One can find the link below:

On March 15 every year, CCTV will conduct a 2 hours special on investigative reporting on fraudulent activities conducted by companies. Every companies that got mentioned by this episode usually suffer negative publicities. Worse yet, often times, government agencies crack down on it right away.

This year's CCTV 315 show went after the following companies/industries:
Apple, several gold companies, China JAC Motors, Volkswagen, several drug companies, several broadband suppliers, Netease, and Google's Android phones operating system.

Here is some English article on its report on Apple and Volkswagen. (It is WSJ, so you need to use google search to get it)

But the English articles usually are only interested in its effect on American Companies.

The Chinese article on the CCTV 315 reporting:

It is a big deal to be on the CCTV 315 reporting. CCTV is the official government mouth piece. The 315 reporting is largely commercial in nature. But we are talking about China, most times, it is hard to tell apart governmental and commercial interests.

Company suffers negative PR from it. Most importantly, government agencies cracks down on it.

For example, one day after the reporting, China's General Administration of Quality Supervision, Inspection and Quarantine order the German company to conduct a recall. Knowing how slow Chinese government agencies work, it is pretty clear CCTV had provided those information to all the government agencies long time ago. So don't think of CCTV's 315 is just like America's 60 minutes. (I doubt any US government agency will conduct punitive order just one day after a 60 minutes show.)

See this English article (up to 680k VW autos will be recalled):

In addition, China JAC Motor just announced a 120k vehicle recall.

But I am only interested in the part on Netease. The following Chinese article gives the detailed description on CCTV 315 attack on Netease:

This TV segment is really creepy. While the 315 segments on Apple and VW are actually pretty good and professional. They actually have footage to prove what they try to investigate. The one on Netease is the opposite. It is full of innuendo and insinuation.

Unlike other segments, it is actually kind of hard to know exactly what Netease is accused of. The name of the segment is "Netease collect users personal secrets". But the part that actually directly named Netease only consists of 1/5 of the segments. In the first 3/5 of this segment, it talks about the cookie file. Cookie file is part of every internet browsers. It records the users habit. In the first 3/5 of this segment, it interviewed many 3rd party companies that collects users cookie file. Therefore, those 3rd party companies collects user behaviors for all of China's users.

But the four major portals (Sina, Sohu, Ntes, and Tencent) won't allow the 3rd party to collect cookie file. But by putting the ads on those portals, the 3rd party companies can collect users' cookie.

The part where it attacked Netease is on the 4/5 of the segment. It said that in addition to cookie, Netease also use its email service to collect user's behavior. Netease is dominant in China's email market. It has about 70% of China's market. CCTV actually get a Netease email branch manager to say that they can see the content of users email. Netease can use email's content to analyze the users. Netease then can target the advertising more precisely.

The last fifth of the segment go back to cookie again.

Therefore, the totality of this segment gives the impression that Netease is really bad in protecting user privacy. It not just gives 3rd party cookie permission. It also do more than that and snooping users email content.

But if reviewing this segment in detail, it never prove that Netease gives 3rd party company permission to users cookie file. The part about Netease email service is really not central to what this segment is about. I am pretty sure google email or yahoo email uses content of users email to generate target advertising. I shall know. I have both gmail and yahoo email, the advertising I got certainly seem to be highly targeted only to my interest.

More importantly, the part about Netease is not highly tangential to the core of this segment. What does email privacy have anything to do with 3rd party companies snooping users cookie file?

I ran out of time. I will provide Netease's official response in my next post.

end.

Friday, March 15, 2013

Netease being attacked by China State TV station


My last post on NTES can be found here:

I had not finished that series yet. But something else happened.

Within 30 minutes of trading this morning, NTES went down -5% on super heavy volume (300k shares exchanged hand, while the average trading is 800k per day).

The only thing I can find is that China's official TV station, CCTV, had accused NTES of wrong-doings.

NTES has China's number 1 Email service. Most Chinese use NTES Email service. CCTV accused NTES of monitoring its users emails. Thus, NTES is able to obtain users behavior and provide targeted advertising to its users.

See the following link:

In the same episode, CCTV also targeted Apple and Google's Android operating system of similar behavior.

I don't know whether I shall laugh or cry. Considering that current Chinese society is full of conceit and deception, CCTV would attack a common western practice of mining user behavior and to generate targeted advertising.

What is doubly ironic is, on this same day, President of China was "elected" with a vote of 2952 for, 1 against, and 3 abstentions. He was elected by a higher percentage (99.86%) than Bashar Hafez al-Assad of Syria (97.62)!

See the following post:

Talking about deceptions at the highest level!

China may be the number 2 country in economy in the world. Its accomplishment in the area of economy is amazing. But in the area of personal freedom, freedom from mind control, and democracy, it is worse than banana republic (most of the African, South American, and South Asian countries have free elections now).

Anyway, this could be nothing or it could be start of something major negative.

CCTV is China's official news organ. But it is also subject to commercial interest. It does do 60 minutes type of investigative reporting. It may have horrendous standard (when compared to 60 minutes). If this is just a sensational piece to generate eye balls, the effect to NTES will be minimal. NTES got minimal amount of money from its email service. The behavior exposed in the CCTV episode is so mild compared to the common practices in China today.

But if CCTV is carrying Chinese government's position, it will be major negative for NTES. If that is the case, more negative reporting on other areas will come out against NTES shortly. Those will form a pretense for the government to punish NTES.

We will have to wait for a couple of weeks. NTES has strong backing of the southern Guandong province chief. If another branch of government or even central government want to attack NTES, it would generate several negative stories in short duration. It is similar to the "struggling session" that every Chinese had learned during his/her high school and college political classes.

Anyway, we will have to wait for a couple of weeks to see which way this goes. If it is only one episode from CCTV, it means nothing. But if other news stations accuses NTES of other wrong-doings, it could be very negative for NTES.

end.

Sina starts major Weibo advertising


My last post on Sina is here:

Sina had been trying to make money from Weibo. But so far, it had proved to be hard going. It made 21.3M from Weibo in the last quarter. It is not insignificant, but considering how much influence it had, it is pitiful.

Sina had some brand advertising on weibo. On the right hand side of Weibo, it had some advertising. But most users completely ignore them. People go to weibo to read messages. But if Sina can make advertising as part of the message, it could make tons of money.

From the following post:

Starting today, 3/15/2013 , Sina is going to start the promoted news feed advertising system. The cost will be CPM = 5 RMB per thousand impressions.

By 3/18/2013, average Weibo users will be seeing these ads.

This is a high risk high reward move. This will disrupt Weibo users habit. They will get to see a lot of messages that they didn't want. Worst yet, Sina's Weibo has a strong number 2 player right behind it, the Tencent Weibo.

If Sina doesn't play this right, it could lose it all to Tencent.

On the other hand, if Sina doing it right, then this will be the start of real major monetization.

I don't know what is the right way to do it. Netease seems to figure out how to manage high risk high reward maneuvers. 4 or 5 years ago, when NTES wants to upgrades its number 3 game XY2 and transition to XY3, it forced players to migrate to XY3. Players revolted and NTES relented. It kept both games and vast majority of players stayed in XY2 (even though XY3 is a much better and more modern game).

Recently, NTES increased the gaming fee of its number 1 game and number 3 games, (XYQ and XY2), as well as XY3, by 50%. Players revolts just as strongly. There is no explanation, no discussion with player representatives. NTES just pretended nothing had happened, except it now charge players 50% more. A month later, all player demonstration and revolt dissipated.

Clearly, NTES had figured out a way to truly gauge how much players are willing to suffer.

So far, I am not sure SINA had figure it out. In the next couple of months, I will check my Weibo account to see how disruptive is this new advertising system and how much does the users complain.

end.

Tuesday, March 12, 2013

Ctrip starts selling train tickets


I don't think I had ever writen a post about Ctrip (CTRP). This may be my first post regards CTRP.

Yesterday, Ctrip starts selling train tickets.

First, some background information, China's railroad ministry is notorious for horrible (and dangerous) service at high prices. But it is at the top of political hierarchy. It has its own ministry (the same level as transportation ministry). It had powerful politicians.

But two years ago, that politician was removed due to bullet train accident. Now, the ministry is demoted and will subject itself under the ministry of transportation.

See the following article: (China Plans Overhaul of Railway System)

That left a sliver of opening. Today, CTRP started to sell cheap train tickets. See the following article:
or

The CTRP train ordering web site:

This could be a game changer for CTRP. There are a lot more people taking train than airplane or hotel. Many order of magnitude more. In addition, price of high end train tickets (such as bullet train) can be very expensive, more expensive than airplane tickets.

But for now, we still have to wait a little longer to see if this change is for real. Will the government shut down CTRP new train ordering site? or if the CTRP train ordering site is with the blessing of the government?

Only time can tell. But this could be the start of something exciting.

end

Monday, March 4, 2013

XYQ and XY2 Players Number Update, part 8


One can find my last NTES related post here:

The numbers are wonderful for NTES. It is definitely better than what I thought. The following are the player statistics numbers:
-----------------------------------------------------------------
The following is the player statistics for XYQ:


Date
Date
Number of Players (in thousands)
Comments
1
1/12/2013
Saturday
1420

2
1/19/2013
Saturday
1377

3
1/26/2013
Saturday
1395

4
2/2/2013
Saturday
1299

5
2/9/2013
Saturday
1153
New Year Eve
6
2/10/2013
Sunday
1170
50% fee increase, New Year Holiday
7
2/11/2013
Monday
1047
Chinese New Year Holiday
8
2/12/2013
Tuesday
1046
Chinese New Year Holiday
9
2/13/2013
Wednesday
1068
Chinese New Year Holiday
10
2/16/2013
Saturday

Work date, server count not recorded
11
2/23/2013
Saturday
1377
Holiday + Weekend
12
3/2/2013
Saturday
1166


As one can see, there is a distinct decrease in the number players playing XYQ. If we make 2/9/2013 as the separation point, and average the first four row (number 1 to 4) and compare to the average the next five rows (number 5 to 9). In addition, we compare to the average of last two rows (number 11 and 12), we will have the following numbers:

Average number of XYQ players BEFORE the 50% fee increase = average of 1 to 4 = 1373
Average number of XYQ players immediately AFTER the 50% fee increase = average of 5 to 9 = 1097
Average number of XYQ players several weeks AFTER the 50% fee increase = average of 11 and 12 = 1272

Thus, the decrease immediately after the 50% fee increase = (1097-1373)/1373 = -20.1%
and the decrease several weeks after the 50% fee increase = (1272-1373)/1373 = -7.4%

A little note on the player numbers on 2/23/2013 and 3/2/2013. On 2/23/2013, it is the lantern festival in China. Every year during lantern festival, XYQ has special promotion where players gets extra experience points. It is nice to see XYQ can still get lots of players playing. On 3/2/2013, it is just a typical weekend. While not as good as on 2/23/2013 (because there are no special promotion), there are definitely much more players than during the Chinese New Year holiday (and immediately after the gaming fee increase). It is clear that the players are coming back. The initial player loss due to the 50% fee increase is receding quickly. This is great news to NTES investors.
--------------------------------
The following is the player statistics for XY2:

Date
Date
Number of Players (in thousands)
Comments
1
1/12/2013
Saturday
708

2
1/19/2013
Saturday
710

3
1/26/2013
Saturday
705

4
2/2/2013
Saturday
696

5
2/9/2013
Saturday
587
New Year Eve
6
2/10/2013
Sunday
605
50% fee increase, New Year Holiday
7
2/11/2013
Monday
604
Chinese New Year Holiday
8
2/12/2013
Tuesday
597
Chinese New Year Holiday
9
2/16/2013
Saturday

Work date, server count not recorded
10
2/23/2013
Saturday
648
Holiday + Weekend
11
3/2/2013
Saturday
665


Again, we make 2/9/2013 as the date of separation, and average the first four rows (number 1 to 4) and compare to the average the next four rows (number 5 to 8). In addition, we also compare to the average of the last two rows (number 10 and 11), we will have the following numbers:

Average number of XY2 players BEFORE the 50% fee increase = average of 1 to 4 = 705
Average number of XY2 players immediately AFTER the 50% fee increase = average of 5 to 8 = 598
Average number of XY2 players several weeks AFTER the 50% fee increase = average of 10 and 11 = 657

Thus, the decrease immediately after the 50% fee increase = (598-705)/705 = -15.2%
and the decrease several weeks after the 50% fee increase = (657-705)/705 = -6.8%

Just like XYQ, the players are coming back quickly to XY2 after the initial shock.
-----------------------
Finally, let me compile the above data into a final table to more clearly see the pattern of players loss after the 50% gaming fee increase.


Gaming fee increase immediate impact
Gaming fee increase medium term impact
XYQ
-20.1%
-7.4%
XY2
-15.2%
-6.8%

The above table is telling us several points.

First, as expected, players don't like the new policy of increased fee to play the game as well as the addition of item-based purchase to time-based games.

Second, the impact on XY2 is less pronounced than that of XYQ. I didn't expect that since XY2 is the oldest game in NTES staple. As the oldest game, one would think it would be the weaker game, thus should suffer more player loss. But it turns out to be the opposite. One possible explanation is that XY2 is so old that players regards it more as a social game. Thus, players stay because their friends are staying. XY2 is extremely sticky.

Third, the immediate impact is 15% to 20% player loss. But as time goes by, majority of those players come back as they see the games are still healthy and their friends are staying. Thus, at this point, the player loss is only about 6% to 7%.

This is great news for NTES. The net effect of 50% gaming fee increase is going to be 150%*(100%-7%) = 1.5*0.93 = 1.395 = around 1.4. Or roughly 40% increase in revenue.

So far, NTES stopped all advertising for those games. The last thing NTES wants is to generate publicity when there are negative news (gaming fee increase is regarded as negative by the players). Also, NTES doesn't need to spend money to purchase new equipment or hire new engineers since there is no player increase. But this is great news for NTES investors, this gaming fee increase doesn't requires any NTES expenditure. All the 40% additional revenue increase go directly to the earning. Finally, the policy is permanent. Those revenue and earnings increases are permanent going forward.

I am a little surprised that only 15% to 20% stopped playing at the beginning. I am even more surprised how fast most of those players come back. It is very clear that those old games (XY2 is about 11 years old and XYQ is about 9 years old) are really becoming social games. They are extremely sticky because, unlike more modern games, players go there to socialize. As long as their friends are there, they will stay (no matter how mad they are at the 50% increase in gaming fee).

Finally, one probably get more certain one month from now. But the direction is pretty certain. I am pretty confident that NTES had played an extremely dangerous game of poker with their customers and won. My calculation above of 1.395 or 39.5% revenue increase is still a little premature and one do need to get more data points. But the most likely scenario is that even more players will continue to come back, thus there might be even more than 39.5% additional revenue from those games.

end.

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