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Shanda Adopts Additional Online Gaming Revenue Model

Trying to muster more strength in its online gaming properties, Shanda (SNDA) has announced that in addition to the existing subscription based pay-to-play revenue model, it has adopted a free-to-play and pay-for in-game

value-added services revenue model for two of its MMORPGs – The Legend of Mir

II and Magical Land.

Most of Mir II's existing server groups were scheduled to switch to the new revenue model yesterday, while certain number of server groups will remain as pure pay-to-play model.

Magical Land has already adopted the new model on all of its server groups starting from November 24, 2005.

Shanda will gradually adopt this new model for its other existing MMORPGs, including The World of Legend. This new revenue model was introduced as Chinese gamers' consumption patterns and market conditions of China's

online game industry have changed significantly since Shanda first standardized the pay-to-play revenue model for MMORPGs more than four years

ago.

Under the new model, while gamers benefit from being able to play the basic functions of a MMORPG for free, they could choose to purchase in-game value-added services, including certain in-game items and premium features, based on their own interest and purchasing power.

"After several years of operating our casual games under the similar revenue model and after extensive research into the Chinese online games market, we believe that adopting the Avatar-based revenue model for more games

will benefit the company in the long run," commented Tianqiao Chen, CEO of Shanda, "however, it might have a negative impact on the short-term revenues of our MMORPGs."

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