Shanda Games Limited operates as an online game company in the People’s Republic of China (China or PRC). The company develops, sources, and operates online games, as well as licenses its games to third parties. The company develops and sources a range of game content through multiple channels, including in-house development, licensing, investment, acquisition, joint development, and joint operation. As of March 31, 2015, it operated 35 massively multi-player online games (MMO) games and 29 mobile games in China and certain overseas markets. Its in-house development capabilities consisted of approximately 1,350 game development personnel and operated 9 MMO games and 6 mobile games that the company developed in-house. The company licenses games from international and domestic developers. As of March 31, 2015, 40 of its 64 games were licensed from third-party developers on an exclusive basis, 1 games were jointly developed with a third-party developer, and 1 game was jointly operated with third-party developers. For the three-month period ended December 31, 2014, the company had 17.1 million average monthly active users and 2.9 million average monthly paying users for its MMO games, and 715,500 average daily active users for its mobile games. The company is expanding its business into selected overseas markets. It established Shanda Games International, its wholly owned Singapore subsidiary, to help establish its overseas business. The company operates a localized version of Dragon Nest in Singapore. It also offers Million Arthur in South Korea through its majority-owned subsidiary, Actoz Soft Co., Ltd. In 2013, the company started to operate Dragon Nest in Europe. In addition, it licenses certain of its MMO games and mobile games, in which the company owns the related game intellectual property rights, to overseas third parties. The company licenses MMO games and mobile games to third parties in international markets, including Hong Kong, Macau, Taiwan, Malaysia, Indonesia, the Philippines, Singapore, Thailand, South Korea, Japan, the United States, Canada, Australia, Turkey and Russia, as well as countries in the Middle East and Europe. Games The company operates MMO games and mobile games in China and in certain overseas markets. Most of its MMO games are massively multi-player online role-playing games (MMORPGs), which are action-based and draw upon themes, such as martial arts adventure, fantasy, strategy and historical events. Each of these MMORPGs creates an evolving virtual world within which game players can play and interact with each other simultaneously over the Internet. The company’s MMO games also include advanced casual games, which are generally less time-consuming and require less focus and attention, but typically also have a story line, elaborate graphics, virtual items available for purchase, and frequent interactions among game players. Some of the company’s MMO games are Web games. The company also operates mobile games for smartphones and tablets. It offers mobile games to both iOS and Android devices, and has adopted an item-based revenue model for all of these games. MMO Games: All of the MMO games the company operates in China are accessible through a Website dedicated to each game. Each game’s Website provides detailed information and updates on that game and on the products and services that it offers in connection with that game. Game players typically access the company’s games at Internet cafes or through the Internet by using personal computers. Mobile Games: The company offers its mobile games in different versions that are adapted for a range of mobile devices, including iPhone, iPad and Android devices. All of its mobile games are accessible from mobile devices, including tablets and mobile phones, through App Store, Google Play, its own mobile game distribution platform, and other third-party mobile app platforms for Android. Intellectual Property and Proprietary Rights As of December 31, 2014, the company owned 259 software copyrights, each of which has been registered with the State Copyright Bureau of the PRC. It owned 357 trademarks, each in various categories, each of which has been registered with the China Trademark Office, and had 123 trademark applications, each in various categories, pending with the China Trademark Office. The company also filed applications to register certain trademarks in various other jurisdictions, including Hong Kong and Vietnam. As of December 31, 2014, the company owned 96 patents and had 25 patent applications pending with the State Intellectual Property Office of China. The company owned or licensed 284 registered domain names, including its official Website and domain names registered in connection with each of the games it offers. All of the company’s domain names are either held by, or licensed by its PRC subsidiaries or variable interest entities. Competition The company competes primarily with other online game and mobile game developers and operators in China, including Boyaa Interactive; Changyou.com Limited; China Mobile Games and Entertainment Group Limited; Forgame Holdings Limited; Giant Interactive; IGG Inc.; iDreamSky Technology Limited; Kingsoft; KongZhong; NetEase, Inc.; NetDragon Websoft, Inc.; Perfect World; Tencent Holdings Limited; and The9 Limited. The company competes with international game developers and operators, such as Activision Blizzard, Inc.; CJ Entertainment & Media; Com2us Corporation; DeNA Co., Ltd.; Electronic Arts, Inc.; Gameloft SE; GungHo Online Entertainment, Inc.; Glu Mobile, Inc.; Gree, Inc.; King Digital Entertainment plc.; NCSoft Corporation; Nexon Corporation; NHN Corp.; SEGA Networks; Square Enix Co., Ltd.; Wemade Entertainment Co., Ltd.; and Zynga, Inc. Government Regulations The company is required to register with the Ministry of Commerce, any license agreement with a foreign licensor that involves an import of technologies, including online game software into China. History Shanda Games Limited was founded in 2001. The company was incorporated in the Cayman Islands in 2008 as an exempted company with limited liability.
shanda games ltd-spons adr
(GAME:Consolidated Issue Listed on NASDAQ Global Select )
No. 1 Office Building
690 Bibo Road
Pudong New Area
Phone: 86 21 5050 4740
Fax: 86 21 5089 5052www.shandagames.com
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