Changyou executives read the main points of the earnings report and answer the analyst questions

NetEase Technology News July 28, Changyou (Nasdaq: CYOU) announced today announced today as of June 30, 2014 unaudited second quarter earnings. The data show that Changyou second quarter total revenue of 177.7 million US dollars, down 2%, down 3%; net profit of 1.9 million US dollars, the chain turnaround, down 97.5%.

After the earnings release, Changyou, Changyou's CEO Chang Run, Chen Dewen, the president, CFO Ren Ruxian, COO Hong Xiajian and CIO Pan Wenjuan then called a conference call to explain the key points and answer questions from analysts.

Bank of America - Merrill Lynch analyst Liang Weiliang: the second half of a number of new games to be launched, the cost of promotion is expected to increase? As of the end of the second quarter, the number of swim the number of employees? R & D personnel?

Wang Tao: In the second half will launch several page tours and tour, will make a car a certain market costs, but compared with the overall market costs, still relatively small, our main market cost is still the business platform . On the whole, the game business is still relatively healthy, the second quarter net profit of the game business can reach 90 million US dollars, the main cost or into the platform business. Platform business costs more planning, but the actual use is to adhere to the principle of prudence and effective. We basically look for the balance between development and profitability, depending on the development of the platform business.

The number of employees in the second quarter of 6214 people, research and development close to 3000 people. R & D investment is indeed very large, accounting for the proportion of revenue reached 28%, the future may increase.

Jialong Shi, Credit Suisse analyst: Can management introduce the current MAU and DAU data for dolphin browser? What is the impact of a swim on MoboTap on the company's revenues and profits? Do you plan to integrate this new product into existing platform business and game products? Finally, mobile advertising is not the main source of revenue for this product?

Ren Ruxian: Dolphin browser MAU and DAU data temporarily inconvenient disclosure, it is a trade secret.

Apply Dragon: The trend of these two data?

Wang Tao: The basic situation now is that the proportion of daily active users accounts for one-third of the monthly active users, while the monthly active users may be incorporated into the next quarter, our total active users, you should be able to Calculate a rough scale.

Morgan Stanley Analyst: My question about platform strategy. I know the overall strategy of tour is "game to make money raising platform, platform channel to play games." I would like to ask is, after investing how much money, or what kind of user index, Changyou feel that you do not need to invest too much money to promote, but to let the platform business to serve the company. According to my understanding, if a platform needs to spend long time to buy a user, then it is not a real platform. So, Changyou is expected at what time or stage can see the benefits of platform business?

Wang Tao: We do invest a lot of market and R & D expenses in the platform business now, but we also try to explore value-added services in the platform business in the second half of this year. In the domestic platform, our video business has grown rapidly, but it is only a basic service. This year we do not plan to charge the value-added service for video services. By the end of the year, we may expect revenue projections for the video business next year.

As for overseas business, we have not had too many plans yet. Because overseas business involves value-added services and game development issues, and for overseas game development is still only in the planning, and not much substantive progress. Our current plan is not to reduce the scale of investment in overseas platform business, especially in the market costs, at least until the end of next year, even if the platform business to make money, we will continue to invest part of this money Marketing, into product development.

Morgan Stanley Analyst: The second question is, of the 250 million platform users, management just did not say that about 15 million from the mobile terminal. If I remember correctly, you've got 16 million from the mobile terminal last quarter.

Wang Tao: is 50 million, monthly active users.

Morgan Stanley Analyst: In these 250 million platform users, how many are the user name or platform account, there are some more detailed scale data?

Wang Tao: PC users rarely have accounts, because they are from the 17,173 media, mobile users account is relatively speaking. Our current business focus is on mobile.

CIC International analyst: "Fantasy God domain" and "soul reverberation" these two games the latest revenue share?

Wang Tao: This is classified as a trade secret, with a normal ratio of 20% to 30%.

CICC Analyst: What do you mean by saying that 20% to 30% will be distributed to each other?

Wang Tao: Yes.

CICC Analyst: Excuse me, "Qin Shiming month" on the Android platform will be a promotion? Is it like the "Dragon" as with third-party platform to sign an exclusive agency agreement?

Wang Tao: We basically go to define the level of a game. If this game belongs to the S level, we may carry out some brand promotion on our own, just like "Tian Long Ba Bu", but at the same time, we Will also access to the platform. If the game is not S level, we will not do their own brand marketing, but will access the channel, with the channel to promote cooperation. Which way we choose to promote, ultimately depends on the "Qin moon" specific data.

CICC Analyst: "Qin Shi Ming Yue" is not put into testing this summer?

Wang Tao: Yes.

Citigroup analyst Zhuang Yiu Hung: I have two questions, the first question is to understand the management of China's client games and web-side games the development of the entire industry view. The second question about "Dragon" in the PC side of the operating conditions, due to swim some of the game's users is growing, please talk about ARPU value trends.

Wang Tao: China's terminal market has entered a contraction period. In the past two quarters, the degree of coincidence of mobile terminal users of terminal tours and mobile games is rapidly increasing. From a macro point of view, end-user will gradually shift to mobile games. As for the final number of users only play tour, it is not clear. On the other hand, the mobile games are undergoing a transformational game and we see the demand for MMORPG connected gameplay by mobile gamers is rapidly increasing.

From the trend of the coming year, MMORPG-based games will have a certain market share, and many users in this game will be users who are transferred from the terminal. So, we're investing a lot of time now in developing the real mobile version of "The Dragon 8," the MMORPG version, which is likely to be available by the end of this year or early next year.

As for the operating conditions of "Tian Long Ba Bu" on the PC side, due to the decrease of the market users and the fact that "Tian Long Ba Bu" accounted for more than 60% of the total tour revenue, we also lowered the "Tian Long Ba Department "revenue task objectives, basically the same as last year, so that teams have the energy to develop more long-term play, thus stabilizing the" Dragon 8 "user base. We will be more conservative in the future revenue of "Tian Long Ba Bu". Of course, we also hope that the user scale and revenue growth of "Tian Long Ba Bu" can last a long time.