Shanda Interactive Entertainment Limited, China's biggest online game operator, reported a 95 percent quarter-on-quarter drop in profits, it said yesterday.

 

Its net income for this quarter plunged to 11.8 million yuan (US$1.5 million) from 220.1 million yuan in the first quarter of last year and posted a net loss of 538.9 million yuan in the fourth quarter of 2005.

 

Total revenues slipped 31.3 percent year-over-year and 5.3 percent quarter-over-quarter to 341.4 million yuan (US$42.6 million) for its first quarter results yesterday.

 

Online game revenues, including MMORPGs and casual games, decreased 29.9 percent year-over-year and 0.7 percent quarter-over-quarter to 309.6 million yuan.

 

"Our first quarter financial results reflect stabilized online game performance as well as the continued development of our home strategy," Chen Tianqiao, Shanda's chief executive officer said in statement yesterday.

 

"The transition in our core business this quarter following the introduction of an in-game, item-based revenue model has proven to be relatively smooth," he said.

 

Shanda posted its first quarterly loss in the fourth quarter last year since it listed on Nasdaq two years ago, after it stopped charging fees for popular games that used to generate major earnings.

 

The company is now in the process of widening its entertainment and media platform with its EZ home entertainment products, which include a PC remote control, as well as software that converts a PC into an entertainment center.

 

(Shanghai Daily May 19, 2006)