Chinese gaming firm Changyou announced their financial results yesterday, touting a 17 percent increase in Q2 revenues YOY, generating $77.7 million.
Changyou reports that this $77.7 million is a record setting performance quarter, alos indicating an 8 percent annual revenues growth when compared to 2009. This figure is also on the high end of the group’s estimates. If their crystal ball holds true, the company is projecting an increase, up to $80-$83 million in Q3 2010 revenues.
Known for their popular free-to-play titles Tian Long Ba Bu, or Dragon Oath as it’s known in North America, and Zhong Hua Ying Xiong, Changyou attributes most of it’s success to the former. Tian Long Ba Bu helped drive the companies’ revenues to the tune of $75.6 million, indicated a further increase of 8 percent per quarter, and 16 percent YOY. Looking beyond their own borders, Changyou points to regional expansion as an additional boost in revenues. “Increased momentum,” in Vietnam and Malaysia in particular. In total, foreign licensing of Changyou’s titles accounted for $2.1 million, a growth of 15 percent over Q2 2009, and a healthy 29 percent increase YOY.
And where is this revenue coming from? When viewing Changyou’s user base, it’s clear to see that they’re on to something, as the company reports a 12 percent increase QOQ and a 42 percent YOY increase in registered accounts. Just shy of 100 million registered users, 98.2, Changyou’s paying accounts jumped 17 percent in Q2 2009, when compared to one year before, or, an increase of 2.79 million new paying customers.
“The double-digit sequential increases in the user base of our games and the record financial results achieved in the second quarter reaffirms our confidence in the future of the online games industry in China and of our company,” says Changyou’s CEO Mr. Tao Wang, Changyou’s chief executive officer.
When it comes down to dollars and cents, i.e. the ARPU, or rather, Average Revenue Per Users, Changyou admits that the number has dropped 8 percent Q2 QOQ, and 1 percent YOY, down to $24. However, according to the company, this is fine by them, as they seek, “to have ARPU within a range that keeps the company’s games affordable for the majority of Chinese game players.”
A “Fair Enough” explanation, as these QOQ and YOY increase figures are surely planting the seeds for future ARPU conversions. In other words, the bottom line might be down for now, but the fresh load of recruits will be ripe and ready for the paying vine soon enough.
Like many of their Chinese competition, Shanda operates a number of freemium/item sales (microtransaction based) titles, along with pay-to-play time based games. Amongst the Shanda stables of games, they operate NCSoft’s Aion: 
