Grand transformation stuffed 500 million single season will not adjust the company strategy huge loss

For the first time after the listing of a substantial loss, the spokesman said it had been expected, the company will not adjust the established strategy

Chen Tianqiao believes that after the target, paranoid to succeed.

The newspaper news (reporter Yin Jie Intern Peng Wu) yesterday, the 2005 fourth quarter and full year grand release unaudited financial results, the Q4 net loss reached 538 million 900 thousand yuan (US $66 million 800 thousand), which is also the first loss since listing shanda. Data show that the grand last year operating income reached 1 billion 897 million yuan, compared with 2004 annual growth of 1 billion 299 million yuan of RMB 46%; annual net profit of 165 million yuan, compared to 2004 fell 72.9%. Shanda spokesman explained that the last game for free on the grand revenue to a certain extent affected, and bring the throes of transition.

Free impact revenue

Since December last year, announced its grand legend, legend of the world and fantasy country three games free of charge, the industry questioned the free mode in the grand earnings report was concentrated in the past. Reporter noted that due to the reduction of the network game "legend" revenue, as well as the main MMORPG began to use the free mode, 64% of total revenue MMORPG game revenue of 230 million 600 thousand yuan, 30.4%. "grand earnings have been expected a decline in the previous quarter, and not suddenly encountered" hole "off go on." Yesterday, a grand spokesman Zhuge Hui told reporters that the game free of charge to a certain extent, the impact of the grand revenue. For the grand loss will continue for a long time, Zhuge Hui did not give a positive answer, saying only that the throes of transition has been reflected in the fourth quarter of last year.

Although earnings is not ideal, but did not exceed the expected grand. Shanda said the company will not adjust the strategy, will continue to adhere to the free online game strategy and family entertainment strategy.

Because of the "provision for losses"

Operating losses are not the most direct cause of the loss of the grand quarter of $66 million 800 thousand. According to the explanation given yesterday's grand side, due to the provision of a sum of up to $64 million 600 thousand in the form of non cash impairment, the company's total net loss in 2005 Q4 was only $66 million 800 thousand. After the acquisition of ACTOZ stake in Shanda, its free action led to the decline in the share price of ACTOZ, which must be re calculated value, resulting in. Relatively speaking, the operating loss of $3 million 400 thousand is only a small part.

Shanda can operate under the background of the 3 major online games free of charge in the operation of the loss of control to such a low level, in a sense, has proved the success of the grand strategy during the transition." Grand senior said, "in addition, Shanda is doing is based on the development rule of the market to change the original network game" according to the time of charging "mode of operation, the fact that this effort has seen quite good result."

A sufficient data to support this point of view is that all this quarter grand commercial operation of the MMORPG game to achieve revenue accounted for 28 million 600 thousand dollars, accounted for only 64%. of the total income data are compared with another domestic large game service provider NetEase 82.3%, obviously in the grand diversified income direction to go faster.

"Box" contributed less

Diversification of income structure does not represent the grand behind the family entertainment strategy has developed to a relatively mature stage. Data show that the income of the representative products "Epro" grand transformation is only 22 million 500 thousand yuan, accounting for only 6%. grand total revenue forecast yesterday said, in this year's earnings in the home entertainment strategy income proportion will gradually rise.

The grand focus of the work will still focus on game development. Among them, based on the grand EZ series of casual game development will be the focus." Shanda President Tang Jun said.

A week ago, grand CEO Chen Tianqiao told reporters, truly reflect the strategic concept of the grand grand family Epro products from December 1, 2005 announced officially listed on the retail within a month to sell 200 thousand sets, and most PC manufacturers have formed a good relationship of cooperation.

Chen Tianqiao also optimistic estimate, suitable for the grand content of the box will be close to one million units this year to enter the market."

Chen Tianqiao admits that the maturity of the home entertainment market will be a long process. 2006 is still a year of transition for the grand."

- observation

2006 grand test

A net loss of up to $66 million 800 thousand a quarter is not an easy figure for any company, even if it is a grand one.

Although Chen Tianqiao from both strategic and financial can make the most reasonable explanation for such losses, cruel and short-sighted capital market will look at how the first loss since listing Shanda, can not be said to be a very interesting thing.

In fact, Shanda from October last year has been about 1/3 of the server to start trial operation of free mode, the December fourth quarter revenue accounted for about 30% of the income, the income that free operating mode is stable. This is a positive signal, because if the grand did not change the operation mode in December, according to the life cycle of the game the natural decline trend, December revenues accounted for fourth of the 30% quarter is unlikely.

Chen Tianqiao did not say how much this transition time to complete, but no way to predict how long it will take to be grand to reproduce the glory years earning large quantities of gold each day.

Unpredictable future, easy to set goals.