The9’s losses widen to $36.1M in the first half of 2012, net revenues hit $16.3M

Chinese gaming conglomerate The9 has reported a net loss of RMB 233.3 million ($36.1 million) for the first and second quarters of its 2012 fiscal year. The company’s losses for the first half of the fiscal year increased by 253.9 percent over the same period in 2011, when The9 reported a net loss of $10.2 million, and were up 3.4 percent over the company’s Q3 and Q4 2011, when it reported a $34.9 million loss.

The company attributed the losses to increased marketing and product development expenses for its games Firefall, which is still in beta in the U.S., and Planetside 2.

Although the company’s losses widened during the period, net revenues improved. During Q1 2012, The9 saw net revenues of RMB 48.6 million ($7.7 million), and in Q2 the company’s net revenues grew to RMB 54.8 million ($8.6 million).

Overall, the company’s first half net revenues were RMB 103.4 million ($16.3 million), up 87.3 percent over Q3 and Q4 2011, and 101.2 percent over the first half of 2011. The9 attributed its increase in net revenue from its first-party massively multiplayer online role playing game (MMORPG) Shen Xian Zhuan. The title also increased The9’s gross profit for the period to RMB 71.6 million ($11.3 million), up 76 percent year-over-year.

According to the company’s balance sheet, online game service revenues were $17.1 million, or 98.8 percent of the company’s total revenues of $17.3 million for the period. The9 did not break out what percentage of its sales came from its online games, and how munch came from its mobile-social gaming network The9 Game Zone.

The9 has struggled to find its footing since losing the extremely lucrative Chinese license for World of Warcraft in 2010. Today’s results mark the fifth quarter in a row the company has reported a net loss, although the company has been able to finance its transition to a new business model on the nest egg of money it built up while running the profitable MMORPG in China for Blizzard.

According to the company’s balance sheet, The9 currently holds $124.8 million on hand in cash and cash equivalents, slightly more than its current market cap of $118.6 million. The company’s shares are currently trading at $4.85 each.