The9 scored another market-thumping quarter, according to the numbers released last night. No surprise there, since that is what the company has done in each of the past six quarters. Thanks to the Warcraft stallion, The9 saw net revenue soar 27% higher as earnings clocked in at $0.34 per American depositary share. The pros thought the company was only good for a profit of $0.32 a share.
Blizzard's game is a global hit, so why shouldn't it be an online sensation in a country with a booming economy and more than 100,000 Internet cafes? The9 has activated 7.5 million paid accounts. At any given time, an average of 330,000 users are playing the fantasy game. There were as many as 680,000 users playing at the same time this past quarter.
A couple of years ago, The9 was a low-profile company that earned its keep by distributing titles in mainland China that were made by South Korea's WebZen
Sure, there is a big expansion pack coming out for the game. The company is also in open beta testing of WebZen's Soul of the Ultimate Nation. Things look promising there, with as many as 400,000 people checking it out at its peak. However, there's a different kind of blizzard in the company's future: yesterday's announcement that Electronic Arts
The EA news led to a 10% stock surge yesterday, and that was before the company posted its impressive first-quarter results after the market's closing bell rang. It may be just the beginning, too. Until EA stepped into the picture, The9 didn't have the varied catalog of titles that older and larger leaders such as NetEase
The9 has ridden that one-trick pony well. Here come the horses.
Longtime Fool contributor Rick Munarriz has been a fan of China's high-margin gaming stocks for a long time. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.