Information Technology News
- Shanda Interactive plans acquisitions
Date: 18-Jul-2007 Sources: (Shenzhen Daily)
DOMESTIC online game developer Shanda Interactive Entertainment Ltd. plans to spend 2 billion yuan (US$263.16 million) to buy other domestic firms to help expand its stable of game titles, president Tang Jun said yesterday.
Tang didn't give a timetable or identify specific companies, but said Shanda isn't likely to invest the total amount in the coming year.
'In reality, I don't think over 12 months we can spend 2 billion yuan,'he said, referring to the investment opportunities available. He added that the company has more than enough cash to cover any acquisitions.
'We like to invest in studio-type companies. Shanda is an operational-type company, and we'd like to cover the areas we're lacking, which is titles,'he said.
He said Shanda would look to wholly acquire more firms like Chengdu Aurora Technology Development Co., a developer and operator of multi-player online role-playing games that Shanda said it was buying earlier this month.
Tang declined to say how much his firm agreed to pay for Aurora, but said local media reports that put the total around 100 million yuan were close to the correct amount.
Tang also said Shanda would make venture capital type investments of around 1 million yuan for start-ups in the online games sector.
Tang was speaking to reporters on the sidelines of a forum on in-game advertising.
Shanda, which lets users play its games for free, is looking to introduce third-party advertisements into its products, such as branded T-shirts or shoes in basketball games, as an alternative revenue driver.
Earlier this month, Tang said the company had solved technical difficulties in placing and updating advertisements in games, but was still working on the business model.
Tang said yesterday Shanda would probably be ready to launch in-game advertising by the end of this year.
'You're not going to see it in the first couple of quarters, but once it takes off, I think you're going to see a very meaningful contribution?to the company's profit, Tang said.
He said in the next three to five years it would be unlikely to generate as much profit as sales of extra in-game features - such as more powerful swords in adventure games - where the firm currently makes much of its revenue.
Tang said Shanda has no plans to launch a virtual world similar to U.S. Internet role-playing title Second Life, denying recent media reports.
'In reality, it's still too early. Even Second Life itself is still in the early stages in the U.S., and moving that to China would be difficult,'he said.
Sponsor Results:
