Shanda Games Reports Second Quarter 2010 Unaudited Results

SHANGHAI, China, Sept. 8, 2010 (GLOBE NEWSWIRE) -- Shanda Games Limited ("Shanda Games", or the "Company") (Nasdaq:GAME), a leading online game developer, operator and publisher in China, today announced its unaudited consolidated financial results for the second quarter ended June 30, 2010.

Second quarter 2010 Financial Highlights ⁽¹⁾

• Net revenues for the second quarter of 2010 were RMB1,112.7 million (US$163.9 million), compared to RMB1,158.5 million and RMB1,143.2 million for the same period last year and the first quarter of 2010, respectively.
• Net revenues from massively multi-player online role-playing games (MMORPGs) were RMB1,015.4 million (US$149.5 million), compared to RMB1,079.3 million and RMB1,022.9 million for the same period last year and the first quarter of 2010, respectively. Active paying accounts (APA) for MMORPGs remained flat at 9.64 million, compared to 9.62 million in the first quarter of 2010. Average monthly revenue per active paying account (ARPU) for MMORPGs was RMB35.1, compared to RMB35.4 in the preceding quarter.
• Net revenues from advanced casual games were RMB71.4 million (US$10.5 million), compared to RMB72.2 million and RMB93.5 million for the same period last year and the first quarter of 2010, respectively. The quarter-over-quarter revenue decrease was primarily due to weaker seasonality for advanced casual games. APA for advanced casual games decreased 14% sequentially to 0.92 million, and ARPU decreased 11% sequentially to RMB25.8.
• Operating income was RMB323.6 million (US$47.7 million), compared to RMB431.0 million in the second quarter of 2009 and RMB378.1 million in the first quarter of 2010. Operating margin was 29.1%, compared to 37.2% in the second quarter of 2009 and 33.1% in the first quarter of 2010.
• Non-GAAP operating income was RMB367.8 million (US$54.2 million), compared with RMB441.1 million in the second quarter of 2009 and RMB391.0 million in the first quarter of 2010. Non-GAAP operating margin was 33.1%, compared with 38.1% in the second quarter of 2009 and 34.2% in the first quarter of 2010.
• GAAP net income attributable to ordinary shareholders was RMB304.3 million (US$44.8 million), compared with RMB363.2 million in the second quarter of 2009 and RMB329.0 million in the first quarter of 2010. Earnings per diluted ADS were RMB1.06 (US$0.16), compared with RMB1.32 in the second quarter of 2009 and RMB1.14 in the first quarter of 2010. 
• Non-GAAP net income attributable to ordinary shareholders was RMB348.5 million (US$51.3 million), compared with RMB373.3 million in the second quarter of 2009 and RMB341.9 million in the first quarter of 2010. Non-GAAP earnings per diluted ADS were RMB1.22 (US$0.18), compared with RMB1.36 in the second quarter of 2009 and RMB1.18 in the first quarter of 2010.

⁽¹⁾ The conversion of Renminbi (RMB) into U.S. dollars in this release is based on RMB6.7909 to US$1.00 as published by the People's Bank of China on June 30, 2010. The percentages stated in this press release are calculated based on the RMB amounts.

⁽²⁾ Non-GAAP measures are disclosed and reconciled to the corresponding GAAP measures in the section below titled "Non-GAAP Financial Measures".

"Our second quarter financial results were in line with our expectations, as we improved the game environment for Mir II following the launch of expansion packs in April and June," said Mr. Alan Tan, Chairman and CEO of Shanda Games. "At the same time, we continued to advance our strategy to provide high-quality, diverse and innovative game content to expand our user base.  'Dragon Nest,' a 3D action MMORPG that we launched in late July, has been warmly received by our gamers and is one of the most successful game launches in China this year. We are very pleased with the overwhelming response to and the popularity of this game, which is the first in a strong portfolio of new games we intend to introduce over the next few quarters, including 'Legend of Immortals,' 'Bubble Fighter,' and 'Hades Realm II.' We expect the introduction of these high-quality games will help us attract a broader user base and achieve a more balanced revenue structure."