It's amazing what a single hit game can do. Chinese gaming upstart The9 (NASDAQ:NCTY) had another blowout quarter, thanks to the popularity of the licensed version of Blizzard's World of Warcraft, which is taking off nicely in the world's most populous nation.
The game is doubtlessly familiar to many stateside gamers. Vivendi's Blizzard Entertainment has created an epic multiplayer fantasy game, and it seems to be a hit in just about every country where it is introduced.
During the quarter, The9 saw revenues soar 363% higher to $32.2 million. All but $0.2 million of that sum is coming from World of Warcraft. Earnings clocked in at $0.43 a share, well above the $0.33-per-share mark Wall Street was expecting.
Yes, one game can make a huge difference. A little more than a year ago, The9 was mostly a forgotten player, trying to make it in China by porting titles from Korean game maker Webzen (NASDAQ:WZEN). World of Warcraft has now blown open the door of opportunity for The9.
The company can now claim five million paid accounts. At any given moment, 330,000 diehard Chinese gamers are playing the game at the same time, with usage peaking at 630,000 enthusiasts.
The game's popularity continues to grow. When we checked in on the company three months ago, it had just 4.3 million paying users, with the average and peak usage totals coming in at 300,000 and 610,000, respectively.
As these beefy numbers illustrate, online gaming is an important part of the growing leisure time and discretionary income that are becoming available in China's booming economy. The Rule Breakers newsletter service has embraced the trend for some time, with NetEase (NASDAQ:NTES) and Shanda Interactive (NASDAQ:SNDA) as active recommendations.
NetEase and Shanda are both set to report quarterly earnings early next week. The9's strong quarter is a good sign, as long as its success isn't coming at the expense of its rivals. That's always possible, though the growing dynamics in China give ample room for several heady growers.
It would be great to see the company add to its product line -- one-hit wonders can be pretty risky -- but at least it's still growing its cash cow. WoW isn't just the World of Warcraft acronym. It's an appropriate exclamation, after the great past few quarters that The9 has put together.
Longtime Fool contributor Rick Munarriz believes in the sector, but he does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
