China Mobile Games and Entertainment Group (“CMGE”) reported revenue of RMB357.6 million (US$58.3 million), compared with RMB98.1 million in Q3 2013 andRMB274.6 million in Q2 2014. Revenues were 264.5% higher year-over-year and 30.2% higher quarter-over-quarter.
CMGE net income was RMB75.2 million (US$12.3 million), compared with net income of RMB25.6 million in the third quarter of 2013 and RMB54.9 million in the second quarter of 2014. Net income was 193.8% higher year-over-year and 37.0% higher quarter-over-quarter.
Total paying user accounts of CMGE for social games were 6.2 million, compared with 2.8 million in Q3 2013 and 5.0 million in Q2 2014. Average revenue per paying user account (“ARPU”) for social games was RMB45.9, compared with RMB24.9 in the third quarter of 2013 and RMB40.1 in the second quarter of 2014.
Total paying user accounts for single-player games (excluding single-player game bundles) were 4.0 million, compared with 2.6 million in Q3 2013 and 3.7 million in Q2 2014. ARPU for single-player games (excluding single-player game bundles) was RMB17.2, compared with RMB4.3 in the third quarter of 2013 and RMB15.6 in the second quarter of 2014.
Total subscriptions for single-player game bundles were 0.6 million in the third quarter of 2014, compared with 1.6 million in the third quarter of 2013 and 0.9 million in the second quarter of 2014. Average revenue per subscription for single-player game bundles was RMB4.9, compared with RMB5.5 in the third quarter of 2013 and RMB3.7 in the second quarter of 2014.
Average monthly active users (“MAUs”) for the third quarter of 2014 were 36.6 million, compared with 15.3 million in Q3 2013 and 20.6 million in Q2 2014. Average daily active users (“DAUs”) 8for the third quarter of 2014 were 5.3 million, compared with 6.4 million in the third quarter of 2013 and 3.7 million in the second quarter of 2014.
In the third quarter, CMGE launched their massively multiplayer online action role playing game (“MMOARPG”) The New Legend and War Valley II and has been intensifying its R&D efforts working on 17 self-developed products, including Naruto, One-Piece, Samurai Spirits, Shaolin Temple, Feng Zhong Qi Yuan, Ikkyu San, and Hello Kitty. We plan to begin launching these self-developed products beginning in the fourth quarter of this year.
In September, CMGE launched MMOARPG game, The New Legend, for which they have obtained the IP rights from Shanda Games. The game has incorporated an interactive tool called “YAYA Yu Yin” to facilitate real time communication among players.
The New Legend was ranked number three in the iOS paid rankings, number seven in free rankings and number 20 in gross billings rankings with average DAUs of over 100,000 for a period of time in September, while gross billings for October were more than RMB10 million. In addition, in October, our MMOARPG game, War Valley II, was launched on four major Korean platforms and was ranked number 1 in free rankings in T-store, number 1 in download rankings in Google Play and number 1 in popularity rankings in T-store and Kakao Talk. Daily gross billings for War Valley II have reached over RMB0.5 million per day on Korean platforms since launch.
In addition, CMGE will conduct closed beta testing on self-developed game Feng Zhong Qi Yuan, for which they have obtained exclusive rights to base the game on the TV drama of the same name. The TV drama debuted on October 1, 2014 and has been very popular in the Chinese TV rankings.
In addition to these new product launches, their existing self-developed card games have continued to record strong growth. Our single-player games such as Er Zhan Xiong Ying have been the driving growth in our single-player game category. They believe that the performance of their self-developed games in 2014 provide strong support for CMGE’s position as one of the world’s top leaders for mobile game development. For example, our self-developed single-player games revenue for the third quarter of 2014 has increased 244.7% compared to the prior quarter and 104.1% compared to the same quarter last year.
CMGE have pre-installed proprietary game center application, as well as a series of self-developed poker games on over 60 million handsets as of the end of third quarter of 2014. The game center application has also been launched on many free Wi-Fi environments, including shopping malls, buses and railway stations. Although these Wi-Fi partnerships are still in the early stage, CMGE believe user acquisition resulting from this strategic alliance with Chinese public Wi-Fi leaders will generate a positive impact in the upcoming few quarters.
According to the 2014 Second Quarter Mobile Game Market Analysis Report published by Analysys International, CMGE again ranks first among China’s mobile game publishers with 19.3% of market share in China (in terms of gross billings), an increase of 1.2% from the prior quarter. In August, CMGE’s Crisis Action, one of the world’s first FPS competitive mobile game, and Dance Everyday, a unique 3D dance-themed game, were selected to be official mobile game titles in the WECG.
For the fourth quarter of 2014, CMGE expects its total revenues to be between RMB380 million and RMB400 million.
The number of China’s mobile gaming users was already over 0.33 billion in H1 2014 and it is believed that there is still great potential in online gaming market with its rapid growth in users according to Nielsen. Total number of mobile gaming users on smartphones reached 190 million in 2013 according to iResearch.
Read more: China Mobile Gaming Market Snapshot in 2013