Legal Niches

Numbers Game: China?s The9 Invests in Red 5 Studios

By pete_gallagher

Chinese game developer and operator The9 Limited has entered into an agreement with U.S. online game developer Red 5 Studios that will see the former acquire a 'majority interest' in the latter for approximately $20.0 million.

The9 previously operated World of Warcraft in China, before losing the WOW license to its Chinese rival NetEase. The9 still operates games such as FIFA Online 2 for Electronic Arts, in addition to its own games, such as World of Fighter and Atlantica. In its most recently reported quarter, The9 reported a 94.0 percent decrease in revenues to approximately $3.7 million U.S., versus the same period from a year earlier. It cited the loss of its WOW license, which expired on June 7, 2009, as the main reason for the drop.

Given that Red 5 is made up of former executives and game developers from WOW-creator Blizzard Entertainment, the deal seems to make a lot of sense, at least on paper. Red5, however, says that it 'can't tell you" what it's working on.

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Full post as published by GamePolitics.com on March 22, 2010 (boomark / email).