NetEase.com Inc's billionaire founder, William Ding, plans to
use US$420 million to develop online games and for acquisitions as
competition increases.
The maker of video games including Fantasy Westward Journey aims
to strengthen its product range and advertising sales over "a
couple of years" with the spending, said Ding, 34, whose fortune
was estimated by Forbes magazine in November to be worth US$1.27
billion.
"The company needs to expand to keep ahead of competition as
well as diversify to minimize risk from potential regulation," said
Edward Yu, chief executive of Analysis International, a
Beijing-based market researcher.
Local rivals such as Shanda Interactive Entertainment Ltd
started offering free games, threatening the pay-to-play market
share of Beijing-based NetEase, which has not released a new title
in two years.
"NetEase games are quite suitable for youths," Ding said in a
February 24 interview.
Ding said he supports greater regulation of content in the
online games market, which he forecasts will grow sixfold to 17.2
billion yuan (US$2.1 billion) by 2010. NetEase began an
experimental time limit last year on some games, cutting points
players may earn after spending more than three hours online.
NetEase plans this year to introduce two titles, Big Tang and
Under the Heavens, both martial arts games featuring characters
from Chinese history and mythology. More than 1.5 million people
play the two main versions of Westward Journey a day.
"NetEase has a good model in that its games are focused on
traditional Chinese culture and are less violent," Yu said.
Ding, China's third-richest person, founded NetEase in 1997 as
the nation's first free, dual-language e-mail service with 20
employees, drawing on his background as a communications engineer
for China Telecommunications Corp, the nation's biggest telephone
company. He currently employs 1,600 and has offices in Beijing,
Shanghai, Guangzhou and Hangzhou.
NetEase's profit more than doubled in 2005 to 932 million yuan
(US$116 million) on sales that rose 76.8 percent to 1.69 billion
yuan (US$210.3 million).
Revenue from the online games division rose 119 percent. The
company is also expanding in Internet advertising, earning 241.2
million yuan (US$30 million) in 2005, up 41 percent from a year
earlier.
(China Daily March 4, 2006)