The Turnout of the Game

2012 third quarter financial results

Income

The total revenue in the third quarter of 2012 are two billion yuan to 2 billion yuan ($ 325 million) in the previous quarter and the same period last year.

Online game services revenue in the third quarter of 2012 to 1.7 billion yuan ($ 277 million) in the previous quarter and the same period last year to 1.7 billion yuan and 1.8 billion yuan respectively.

Advertising service revenue in the third quarter of 2012 to 243 million yuan (3,867 million U.S. dollars) in the previous quarter and the same period last year to 204 million yuan and 220 million yuan.

The third quarter of 2012, E-mail, wireless value-added services and other business income to 6,192 yuan ($ 9.85 million) in the previous quarter and the same period last year were 51.4 million yuan and 31.3 million yuan.

Gross profit

Gross profit margin for the third quarter of 2012 were 1.3 billion yuan to 1.4 billion yuan ($ 217 million) in the previous quarter and the same period last year.

Gross profit increased mainly due to revenue growth of advertising services and self-developed game, "World of Warcraft" but was partially offset by lower income. Advertising gross profit qoq growth was mainly due to seasonal factors, and the coverage of the Olympic Games in London. Self-developed game revenue sequential growth is mainly due to the "Fantasy Westward Journey, Westward Journey Online II" and two new the game "Wuhun", "chopped soul" revenue growth. Stable performance this quarter, "the world" and "Ghost Story".

The gross profit year-on-year growth was mainly due to the revenue growth of the self-developed game, but "World of Warcraft" decline in revenue, as well as the increase partially offset by labor costs, the cost of video content and advertising costs. Self-developed game revenue year-on-year increase was primarily due to the growth in revenue "Fantasy Westward Journey," "Ghost Story" and "the world", "Westward Journey Online II" and the new game "Wuhun" and "chopped soul".

Gross profit (loss) margin

Online game in the third quarter of 2012 gross margin was 74.2%, 73.3% and 71.5% in the previous quarter and the same period last year, respectively. The increase in gross profit margin was mainly due to the self-developed game revenue accounted for the increase in the proportion of the total revenue of the online game.

Advertising services in the third quarter of 2012 gross margin was 36.2%, 33.0% and 48.4% in the previous quarter and the same period last year, respectively. Ring than the growth of the gross profit margin was mainly due to economies of scale with the increase in advertising revenue in the third quarter. The gross margin fell mainly due to the increase in labor costs and content costs related to the London Olympics.

The third quarter of 2012, E-mail, wireless value-added services and other business gross margin was 6.0% in the previous quarter and the same period last year gross loss rate of 11.6% and 13.2%, respectively. The improvement in gross margin was mainly due to the game ancillary products, such as growth in sales of the limited edition of the online game client.