The bad news has not stopped for Chinese online gaming firm The9 Limited, as the company has now filed a Form 12b-25 with the United States Securities and Exchange Commission regarding the late filing of its annual report on Form 20-F for the year ended December 31, 2008.
On April 16, 2009, The9 announced that it had learned that Blizzard's World of Warcraft would be licensed to another China-based online game company following the expiration of the license agreement between Blizzard Entertainment and the The9 on June 7, 2009. World of Warcraft accounts for a substantial majority of The9's revenue, and the company is finalizing its financial reporting treatment and related disclosures resulting from the non-renewal as reflected in its financial statements as of and for the year ended December 31, 2008.
As a result of the non-renewal of the World of Warcraft license agreement, as well as taking into consideration certain other events that occurred subsequent to year-end in connection with certain other licensed games and lower than expected operating performance of one of its games, the company will record impairment and certain other charges in its financial statements for the year ended December 31, 2008. As a result of these charges, net income for the year ended December 31, 2008, presented in its annual report on Form 20-F is expected to be between 55% and 75% lower than net income for the same period presented in the Form 6-K filed by The9 on February 24, 2009. The company intends to file the Form 20-F on or before July 15, 2009.
Chinese gaming rival NetEase.com won rights to operate the WoW game and NetEase is currently planning to re-launch the game servers soon.
