Shares of Chinese online gaming upstart Perfect World
Less than a month ago, Perfect World was projecting its top line to come in between flat and a 5% sequential rise. The initial prognosis came on the heels of China ordering the country's Internet cafes to close for a three-day mourning period after last month's devastating earthquake.
Perfect World, along with peers Shanda Interactive
The quake's aftermath was sobering. The mourning break was a near-term hiccup, but could the industry continue to thrive after a natural disaster claimed many of its young gamers?
The companies were faring well before the disaster. All of the companies except NetEase blew past Wall Street's profit expectations during the first quarter.
Q1 est. |
Q1 actual |
|
---|---|---|
$0.31 |
$0.30 |
|
$0.16 |
$0.20 |
|
$0.32 |
$0.46 |
|
$0.35 |
$0.38 |
|
$0.51 |
$0.56 |
The sector has quieted in recent weeks, as investors assess the fundamentals. Outside of online gaming, ad giant Focus Media
Perfect World reversing the trend is a great sign for the company and its rivals. It closed out its first quarter with 1.7 million active paying accounts. At any given time, an average of 660,000 users are playing the company's games. If gamers are coming back to Perfect World's wares in better-than-projected fashion, it may very well be the case for all of its peers.
For investors in this space, it's a great sign to keep playing the game.