Shanda executives interpret earnings reports new revenue model

May 29, according to foreign media reports, Tuesday issued a grand ending March 31, 2008 unaudited first-quarter earnings reports. After the earnings release, the grand Chairman of the Board and CEO Chen Tianqiao, president and chief technology officer Tan Zhao Qun, chief financial officer WU Zhao Po, and so held a conference call, earnings interpreted points, and answered a question by investment bank analysts. Following is a summary of part of the contents of analysts question: Citigroup analyst Ailixiya Yapu (Alicia Yap): grand from the network in Sichuan Province have role-playing game users of the total number of users is the ratio » Mrs. Kwan-chiu: Shanda's revenue has not calculated the number of users, according to company policy, we will not disclose the number of users affected areas the situation. We have based on the current business operations of the revenue is expected. Citigroup analyst Ailixiya Yapu (Alicia Yap): online games can tell us about a grand ( "Cangtian") as operating mode » Will the new business model based on the time and mode of payment based on the pay-per-equipment mixed mode » Mrs. Kwan-chiu: Shanda has been listening to comes from the user's needs and feedback, the revenue model in online games, we will take the game one of the most consistent with the characteristics of the model. At the same time, would also like to welcome other users to experience the big game. Citigroup analyst Ailixiya Yapu (Alicia Yap): Shanda has developed a new model » Zhao Tan Group: Based on user feedback and operation of ads, we have developed a revenue model. But now, the company does not disclose the revenue model of the specific situation. But we have to, the revenue model most user-friendly and more suitable for online games. Citigroup analyst Ailixiya Yapu (Alicia Yap): The next question with a role-playing game network of the average monthly revenue per user and active paying account. What new game on a grand first quarter of the increase in active paying account played a role in promoting » If in the next few quarters continue to introduce new games, this trend can be maintained » Basis for a grand experience, a typical game players can take a long time in the new game in the beginning of substantial input » Mrs. Kwan-chiu: On your first question, we found that all the online games are on the increase in active accounts paid to promote its role. This is mainly attributed to the Lunar New Year, winter break has done some promotional activities, and launched a new information-and new content. We believe that active paying account the rapid growth is a grand strategic platform for the response. Regarding the second question, the first quarter of the average monthly revenue per user declined mainly because of the active paid account caused by too much growth. Add active accounts are usually paid less costly and therefore diluted the company's average closing per user per month. We look forward to the active accounts paid a record high. We will continue to introduce new elements to promote the growth of active paying account. Citigroup analyst Ailixiya Yapu (Alicia Yap): the first quarter of the active paid subscribers to the paid account the ratio of the number of « Zhao Tan group: about 8 percent. Investment Company Pali Research analyst Hou days (Tian X. Hou): According to a grand total expenditure growth, the first-quarter sales and marketing expenditure increased rapidly. This trend will continue into the second quarter » WU Zhao Po: It should be the case. First-quarter operating expenditure growth is mainly due to product development expenditure growth impetus. This company on the development of new online games. Some of these games will be put into operation in the first half of this year, and some have already entered the company's product line. First-quarter sales and marketing expenditure increased significantly, our organization is the main user of students during the winter vacation and the Spring Festival organized by the promotional activities. The first quarter and the third quarter and holiday and leisure games of the peak periods, we will usually organized a large-scale marketing and promotional activities, the impact of these activities would normally continue into the next quarter. Therefore, the first quarter and third quarter sales and marketing expenditure in the proportion of the company's total revenue will be higher. In the first quarter, sales and marketing expenditure in the company's total revenue of 7.6 percent, lower than the 2007 third quarter's 9.3 percent, but higher than the previous quarter's 7.2 percent. Investment Company Pali Research analyst Hou days (Tian X. Hou): That is to say, logically, the second-quarter operating margin will be higher point » WU Zhao Po: is the case. Since the first quarter compared with the second quarter, sales and marketing spending in the proportion of the total revenue will not be too high, so will the operating margin is higher. But note that the second quarter of the three-day mourning period we stopped the game operators, so those three days without any income. For the second quarter of the earthquake had a certain impact on performance. Investment Company Pali Research analyst Hou days (Tian X. Hou): based on the latest grand development strategy, has been divided into a grand grand grand online games and the two departments. The logic behind this strategy is what » Mrs. Kwan-chiu: content-based, community and business strategy, as early as three years ago, we will have a grand game and split into two departments-the grand idea. We believe that the appointment of a grand grand online games and the two departments senior management team will further strengthen core competitiveness, the two departments to promote the long-term growth. We are also the two departments to the management team in their positions to contribute to confidence. Susquehanna Financial Group analyst Zhao Chunming: grand in the first quarter of six new game.财报显示the first quarter of a grand, multi-role-playing game network revenue increased by 38 million yuan, casual game revenue increased by 31 million yuan. In the online gaming revenue to increase 69 million yuan, from the new game is the ratio of the number of « Zhao Tan Group: Based on the company's policy, not a single game introduced the revenue situation. Shanda first quarter revenue growth in online games, mainly due to the implementation of product strategy, the old and the new multi-role-playing game network are the company's revenue growth has played a catalytic role. Susquehanna Financial Group analyst Zhao Chunming: For the grand online games revenue growth, the contribution of new online games, online games or old contribution to the » Mrs. Kwan-chiu: a grand new releases in the first quarter of online games is the main time period at the end of the first quarter, from the contribution of new online games are not many, mainly relying on the old online games. In the first quarter, Shanda online games for all films are released information. We believe that the importance of information-the same as the new online games. Merrill Lynch analyst Eddie Leung (Eddie Leung): grand in the next few quarters will release the new game » Mrs. Kwan-chiu: grand upcoming release of new games, including 11 multi-role-playing game network and 6, leisure games. Among them, in the second quarter, the company will release "Longshen legend," "Heaven and Earth aspect," "Heroes" and other number games. Shanda in the second and third quarters will release a total of about six new games. Merrill Lynch analyst Eddie Leung (Eddie Leung): Please talk about the first quarter of the capital expenditure, and annual capital expenditure. WU Zhao Po: major capital expenditure for the purchase of servers, because we have a strong unified platform, so every quarter need additional capital expenditure of more limited. Morgan Stanley analyst Jennifer Wu (Jenny Wu): grand-game advertising business progress » The business will be when revenue growth for the company to contribute » Mrs. Kwan-chiu:'s current built-game advertising business progressing smoothly, we expect that the business will be in the next year for the company's revenue growth to contribute. Morgan Stanley analyst Jennifer Wu (Jenny Wu): grand leisure games in the last few quarters has a very solid performance, this trend can continue to maintain » Mrs. Kwan-chiu: casual games of the first quarter with strong performance was mainly related to the Lunar New Year and winter vacation. As part of a strategy of product line, our leisure confidence in the performance of games. Credit Suisse analyst Yong-Heng Zhang (Wallace Cheung): grand the first quarter of the other very large amount of expenditure » Other second-quarter spending what kind of trend » WU Zhao Po: The second quarter is expected to cost the other would be extremely limited. Oppenheimer analyst Jiang Paul (Paul Keung): on the big "18 projects," Shanda's current game has been the number of authorized » It is expected that these games will be whether the revenue generated enormous impact on the » These games will be whether the franchise than the normal low » Mrs. Kwan-chiu: As I mentioned earlier, the second quarter and third quarter will release six new online games. In these games, only a company independent development of the game, while the remaining five games all from the "18 projects." In the long run, the company will release more from the "Project 18" games, these games will be expected to bring more revenue.