Chinese mobile and social gaming platform The9 said it lost $11.7 million after earning $8.4 million in net revenue in the first half of this year. The company, which is still trying to recover from the loss of its license to distribute World of Warcraft in China, has been seeking new revenue streams through a recent partnership with OpenFeint and the launch of a $100 million fund to finance mobile apps.
The9’s net loss is down 47 percent from the same time period a year before when it lost $22 million in the first half of 2010. Total revenue is up 13.8 percent from last year, when it made $7.4 million in the first half of 2010.
An early investor in the company that spawned OpenFeint, The9 partnered with the U.S.-based mobile social gaming network to bring Western titles to the Chinese market. The9 launched what’s essentially a localized version of OpenFeint for Chinese consumers called The9 Game Zone earlier this spring. It also said it made $9.3 million off OpenFeint’s $104 million sale to GREE this year in its earnings statement today.
The9 said the losses came as the company spent capital on titles launching in the third and fourth quarters of this year called Shen Xian Zhuan and Firefall. The company used to have the World of Warcraft license in China and saw its annual revenues decline by about 90 percent in 2010 after it lost the license. The9 still has $208 million in cash on on its balance sheet, more than its market capitalization of $154 million. It has been using that capital to develop titles and become a local mobile gaming platform.
The9 is also behind several massive multiplayer role-playing games like Soul of the Ultimate Nation and Atlantica. It recently launched a $100 million Android-focused fund in concert with Chengwei Ventures, ChinaRock Capital Management and China Renaissance K2 Ventures. The9’s competitors include companies like Android mobile-social gaming network PapayaMobile.