ChangYou's Q3 Revenues Up 25% To Record $85.6M

Chinese online game developer and operator ChangYou, a subsidiary of Sohu, reported record revenues of $85.6 million for the third fiscal quarter of 2010 (ending September 30th), up 25 percent over the same period last year and 10 percent over the previous quarter. The company also saw its profits for the quarter reach an all-time high of $45.3 million, rising 20 percent year-over-year and 8 percent quarter-over-quarter. For Q4 2010, the company expects total revenues of between $86 million and $89 million. Most of the firm's revenues, around $83.6 million, came from its game operations for titles like Tian Long Ba Bu (Dragon Oath in North America). Overseas licensing revenues made up the remaining $2 million, down 7 percent quarter-over-quarter but up 11 percent year-over-year. An increase in registered accounts, paying accounts, and "average revenue per paying account" helped ChangYou reach these record numbers -- its aggregate registered accounts grew 40 percent year-over-year and 7 percent quarter-over-quarter to 105.2 million The number of paying users decreased 6 percent quarter-over-quarter to 2.61 million, though that's a 9 percent jump year-over-year. Those accounts spent an average of RMB 214, or around $32, 13 percent more quarter-over-quarter and 16 percent more year-over-year. Outlining business developments for the quarter, ChangYou noted that it began open beta testing for Immortal Faith, a 2D MMORPG based on Chinese mythology; and that it is constructing a new $146 million office in Beijing that will serve as its new headquarters and accommodate its growth. "Our solid financial and operational results in the third quarter once again demonstrate the merits of using feedback to direct research and development efforts in our games," says ChangYou CEO Tao Wang. Wang continues, "[Tian Long Ba Bu], our flagship title, continues to be one of the most popular online games in China primarily due to our ongoing ability to deliver fresh content that meets the needs of today's users." "With continual investments in employee recruitment and training and plans for a new corporate headquarter in place, we have a positive outlook on the industry and look to bring more proprietary games to market with an expanded team of talented engineers to reinforce our position as one of the premier online game brands in China."