NEW YORK - Shanda Games Ltd, the Chinese maker of such video games as "Mir 2" and "Woool", plans to expand in the United States, South Korea and Japan this year, as its business matures in its home country.
The company also wants to break into Malaysia and Indonesia, Shanda President Hai Ling told Reuters.
The Shanghai-based company, which spun off from Shanda Interactive after an initial public offering in 2009, develops games and sells online accessories such as game costumes and weapons. More than 95 percent of its annual revenue comes from China.
The Asian market "is easier to enter due to cultural similarity", Ling said. "Malaysia and Indonesia are potential markets owing to the size and growth opportunity," he added. He declined to say which games would be released in those countries.
The company opened an office in Singapore last year to "expedite expansion" in these new markets, which will help the company distribute and operate games in the region, he said. Shanda is one of the few publicly traded video game companies that focuses exclusively on digital games that are not played on consoles.
Competition in China has become fierce with rivals such as Tencent Holdings Ltd and NetEase.com taking big slices of the online games market. Growth in gaming is slowing in China, and Shanda is on the right track to expand to countries where the gaming market is less mature, said ThinkEquity analyst Atul Bagga.
"Shanda has a good chance of succeeding in those new geographies where the market is relatively much smaller and has room for growth," Bagga said, referring to Southeast Asian markets.
Shanda, which has 2,800 employees, has a market capitalization of $1.8 billion and made $640 million in revenue in 2010. The company seeks to generate 10 percent of its revenue from markets outside China in 2012. About 4 percent of its revenue came from international markets in the fourth quarter of 2010.
This year, it will launch "Dragon Nest" in the United States and "Luvinia Online" in the US and Japan.
Reuters
