Chinese online game development company The9 Limited (NCTY) announced its financial results for the third quarter ended September 30, 2008 and stated that while total net revenues increased 29.3% year-over-year, they decreased 10.2% quarter-over-quarter to CNY408.4 million.
Net income for the third quarter of 2008 was CNY98.4 million, again representing an increase of 157.6% from CNY38.2 million in the third quarter of 2007 but a decrease of 15.1% from CNY115.9 million in the second quarter of 2008.
"The third quarter results demonstrate that The9's operational execution continues to strengthen, resulting in sustained popularity of our games despite the seasonal impacts we experienced in the third quarter," stated Jun Zhu, chairman and CEO of The9.
For the third quarter of 2008, The9 reported total gross revenues of CNY431.1 million, which increased 29.3% as compared to total gross revenues of CNY333.3 million in the third quarter of 2007 and represented a 10.2% decrease from CNY480.3 million in the second quarter of 2008. Total net revenues for the third quarter of 2008 were CNY408.4 million, a 29.3% increase as compared to CNY316.0 million for the same period in 2007, but a 10.2% decrease from CNY455.1 million in the second quarter of 2008.
Online game services gross revenues for the third quarter of 2008 were CNY429.3 million, which included revenue recognized from long-outstanding unused online points and CD-Key of CNY13.6 million, compared to CNY6.6 million in the second quarter of 2008. Online game service gross revenues showed a 33.5% increase from CNY321.7 million in the third quarter of 2007 and a 10.4% decrease from CNY479.1 million in the second quarter of 2008.
Gross profit for the third quarter of 2008 increased 36.8% year-over-year from CNY132.2 million and decreased 15.5% quarter-over- quarter from CNY214.0 million to CNY180.9 million. For the third quarter of 2008, operating expenses were CNY103.0 million, remaining stable compared to CNY100.3 million in the previous quarter and representing an increase of 16.4% from CNY88.5 million in the same period last year.
Net income for the third quarter of 2008 increased 157.6% from CNY38.2 million in the third quarter of 2007, and decreased 15.1% from CNY115.9 million in the second quarter of 2008, to CNY98.4 million.
As of September 30, 2008, the The9's total cash and cash equivalents and short term investment were CNY2.24 billion, which increased as compared to CNY2.07 billion as of June 30, 2008 primarily due to the cash receipts from sales of prepaid game points.