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Perfect World Co.'s CEO Discusses Q1 2012 Results - Earnings Call Transcript

Our diverse game portfolio and pipeline are one of the major strengths of our company. During the first quarter we continued to work on our rich pipeline which includes several new MMORPGs like the highly-anticipated titles, Swordsman Online and Saint Seiya Online, as well as a number of different type of games such as web games.

This year we are gearing up for the launch of two martial arts MMORPGs, Heaven Sword and Dragon Saber, and the Return of the Condor Heroes. Both of these games are adapted from widely-popular martial arts novels by Louis Cha, one of China’s most celebrated writers. We expect to launch both titles in the second half of this year, and believe they will bring a new level of fighting fun to both martial arts fans and gamers. At the same time, we are actively managing the healthy lifecycle and the sustainable growth of our portfolios by working on content enhancement of our existing games.

Another core component of our business continues to be our effective globalization strategy. We maintain our global presence of subsidiaries and specialized production studios in both China and abroad. That’s so to further enhance our strong R&D capabilities worldwide. Our newly-acquired US-based Cryptic Studios is currently developing the highly-anticipated game Neverwinter and other projects, adding additional world-class titles to our portfolio.

We also continue to enhance our global operating capabilities through [extensing of reach in] network of subsidiaries and partners. With diverse portfolios and pipeline, strong and innovative R&D teams worldwide, and extensive global outreach in network, we will continue to grow our business to meeting the increasing high standards of today’s online gamer and create long-term value for our shareholders.

Thank you. Now I will pass the call to Kelvin.

Kelvin Lau

Thank you, Michael.

Our first quarter revenues fell within our expectation, although [inaudible] compared to the previous quarter. In the first quarter we are more focused on preparation for our upcoming game launches and content enhancement for the healthy lifecycles of our existing games. Furthermore, we slowed down promotional activities as many players were away from their computers for the Chinese New Year and we did not have any major new launches during the quarter, which resulted in a reduction in sales and marketing expenses for the quarter.

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