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CMGE Reports First Quarter 2013 Unaudited Financial Results

HONG KONG, May 31, 2013 (GLOBE NEWSWIRE) -- China Mobile Games and Entertainment Group Limited ("CMGE" or the "Company") (Nasdaq:CMGE), a leading mobile game company in China, today reported its unaudited financial results for the first quarter ended March 31, 2013.

First Quarter 2013 Financial Highlights
  • Revenues were RMB36.5 million (US$5.9 million 1), compared with RMB54.3 million in the first quarter of 2012 and RMB28.9 million in the fourth quarter of 2012. The sequential quarterly growth in revenue is largely a result of increased revenue from social games and single player games and an increase in the number of subscriptions of the Company's single-player game bundles.
  • Net loss was RMB21.6 million (US$3.5 million), compared with net income of RMB18.8 million in the first quarter of 2012 and net loss of RMB58.3 million in the fourth quarter of 2012.
  • Non-GAAP 2 net loss, excluding (1) share-based compensation expenses and (2) goodwill and intangible assets impairment loss, was RMB13.2 million (US$2.1 million), compared with non-GAAP net income of RMB20.7 million in the first quarter of 2012 and non-GAAP net loss of RMB10.0 million in the fourth quarter of 2012.
  • Basic and diluted loss per American Depositary Share 3 ("ADS") was RMB1.01 (US$0.16), compared with an earning of RMB0.87 in the first quarter of 2012 and a loss of RMB2.71 in the fourth quarter of 2012.

First Quarter Select Operating Data
  • Total paying user accounts 4 for single-player games (excluding single-player game bundles) were 4.3 million, compared with 12.1 million in the first quarter of 2012 and 5.0 million in the fourth quarter of 2012. Average revenue per paying user account ("ARPU") for single-player games (excluding single-player game bundles) was RMB3.38, compared with RMB2.81 in the first quarter of 2012 and RMB2.37 in the fourth quarter of 2012.
  • Total subscriptions 5 for single-player game bundles were 1.5 million in the first quarter of 2013, compared with 2.0 million in the first quarter of 2012 and 1.1 million in the fourth quarter of 2012. Average revenue per subscription for single-player game bundles was RMB4.73, compared with RMB4.59 in the first quarter of 2012 and RMB4.01 in the fourth quarter of 2012.
  • Total paying user accounts for social games were 308,039, compared with 164,030 in the first quarter of 2012 and 48,235 in the fourth quarter of 2012. ARPU for social games was RMB23.81, compared with RMB50.36 in the first quarter of 2012 and RMB92.47 in the fourth quarter of 2012.

1 This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.2108 to US$1.00, the effective noon buying rate as of March 29, 2013 in The City of New York for cable transfers of RMB as set forth in H.10 weekly statistical release of the Federal Reserve Board.

2 Non-GAAP measures and related reconciliations to GAAP measures are described in the accompanying sections titled "About Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures" at the end of this press release.

3 One ADS represents 14 Class A ordinary shares of the Company.

4 Total paying user accounts represents (i) the number of user accounts that have purchased in-game items for the relevant period, adjusted to eliminate double-counting of the same user accounts, and (ii) the total number of games downloaded through application stores.

5 Total subscriptions represents the total number of monthly subscriptions to our game bundles offered through mobile network operators. A user who pays two subscription fees during one month to subscribe to different game bundles would be counted as two subscriptions.

"We were pleased to see a strong increase in revenue and an overall improvement in our financial and operational performance during the first quarter. We have begun to pick up momentum following the implementation last year of our long-term strategy of focusing on developing and publishing smartphone games," commented Mr. Ken Jian Xiao, CMGE's Chief Executive Officer. "We have been working diligently to enhance and adjust our distribution channels and our technology and development teams to take advantage of the significant growth opportunities in China's smartphone game business. On top of our existing game portfolio of 510 games, we recently announced the upcoming launch of our newest games, War Valley, Xiang Mo Shen Hua, and Immortal Wind, which are all self-developed social games for both Android and iOS-based platforms. In a demonstration of its potential, the Company received three national mobile game awards in 2013. Among these, War Valley was awarded the Online Game Award for Excellence by the Global Mobile Game Confederation and was named a Top 10 Mobile Game at the Global Mobile Internet Conference. In addition, the Golden Apple Award for Best Game was presented to Joyful Zha Jin Hua. We also significantly expanded our game publishing operations. In particular, we recently published Dragon's Summon, an Android-based game developed by a third-party.

"We are excited about our social game pipeline as we plan to launch over 15 social games in 2013. The release of these games is the result of investments and transitional efforts made last year. We invested heavily in developing smartphone social games and establishing our third-party game publishing capabilities. In addition, since November 2012, we have acquired eight game development teams which we are confident will help drive our overall performance over the long run.

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