Things were going so well for China's gaming companies before last night's report from Perfect World
Along comes Perfect World to rain on the earnings parade.
Perfect World's revenue climbed 22% to $111.2 million, just shy of the $111.7 million that analysts were forecasting. Things got uglier on the way down to the bottom line. The provider of online multiplayer fantasy games clocked in with an adjusted profit of $0.53 a share, short of both the $0.60 a share it rang up a year earlier but also well shy of the $0.67 a share that the pros were looking for this time around.
Source: Yahoo! Finance.
Congratulations, Perfect World. You stand out, but for the wrong reason.
Earlier this year, Perfect World was deliberately drawing out its development cycle, hoping to improve the quality of its games and slowing the monetization process to bring in more gamers. The plan appears to have worked on the top line, but margins are a mess.
The moral of the story here is that we can't paint in broad strokes. Not all of China's gaming companies are the same.
Heading into this latest wave of earnings it seemed as if NetEase would be the one facing the biggest challenge. Activision Blizzard
So let's keep an eye on all five companies as individual entities. What's good for one isn't necessarily what best for the other.
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