"Perfect World is emerging as an innovative leader in 3D thanks to its skillful adoption of popular local culture (such as the the game versions of film 'Red Cliff,')" Richard Ji, an analyst with Morgan Stanley, said in a June report on the company, which he regarded as "undervalued."

The company will create "green" games but the bottom line is not to use improper content to woo young people, Chi said.

The9 Ltd

Shanghai-based The9 Ltd, which owes its strength to the World of WarCraft, said yesterday it will adopt a two part strategy: to import more high-quality games and strengthen in-house development.

"We have nearly US$300 million in disposable cash, and we will invest part of this in research and development," Chen Xiaowei, The9's president, said in an interview yesterday.

The9 will continue to improve in-house development with its team of more than 200 staffers in Beijing, Shanghai, Chengdu and Nanjing.

The9 put on show its second home-developed game "Warriors of Fate Online," based on the history of Three Kingdoms, which will be launched in the second half of the year.

As well as home-development, The9 has established a joint venture with the South Korea-based game developer T3. The9 invested US$38 million to become a shareholder in T3 in April and plans to license its developed games overseas, Chen said.

Meanwhile, The9 will soon launch the widely-anticipated soccer game FIFA Online2 and the dance game Audition2 on the Chinese mainland.

The FIFA game is still waiting for approval from the regulator, Chen said.

MySpace.cn

MySpace.cn, the Chinese-language version of the world's popular online community Website, said yesterday it would provide games for the first time through its developer platform.

Yesterday MySpace launched a Pan-Asian game competition to entice people to develop games for MySpace in China, Japan, South Korea and India.