The9 Partners with Qing Cheng to Enhance Mobile Game Presence
The9 and Qing Cheng Join Forces for Mobile Gaming Expansion
The9 Limited (NASDAQ: NCTY) has made a strategic move by establishing a joint venture with Chengdu Qing Cheng Network Science and Technology Co., Ltd. This collaboration aims to enhance mobile game operations and distribution, particularly focusing on attracting gamers from lower-tier markets in China. With the video's gaming industry experiencing significant developments, this venture is poised to leverage emerging opportunities.
Details of the Joint Venture Agreement
Under the terms of the agreement, The9 will own a 51% stake in the new venture, while Qing Cheng will hold the remaining 49%. This setup positions the joint venture as The9's prime subsidiary for mobile game operations across varying market segments. The partnership aims to tap into Qing Cheng's extensive distribution channels, which are particularly effective in lower-tier cities in China.
Projected Profits and Growth
The collaboration anticipates ambitious financial outcomes, with Qing Cheng committing to an annual profit exceeding RMB 80 million (around USD 11 million) for the fiscal year 2025. Additionally, the joint venture is expected to witness a growth trajectory of over 50% annually during the following two years, signifying a robust market potential.
Strategic Distribution Advantages
Qing Cheng's unique distribution capabilities will play a crucial role in maximizing the venture's potential. The company aims to capitalize on its established networks, which cover third-tier and even lower-tier cities, effectively enhancing market penetration in regions previously underserved.
Commitment to Quality and Engagement
With a focus on quality gaming experiences, Qing Cheng aims to collaborate with various strategic partners to ensure a steady influx of high-quality games tailored for these lower-tier markets. By utilizing advanced e-commerce strategies, they plan to continuously engage gamers, offering incentives that foster loyalty without significantly increasing operational costs.
Expert Insights and Market Potential
George Lai, Executive Director and CFO of The9, emphasized the rising trends highlighted in the QuestMobile 2024 Sinking Market Insight Report. With a growing number of mobile internet users, now reaching 647 million, there is a significant demand for mobile gaming, especially in regions that need further engagement. The9’s partnership with Qing Cheng is designed to capitalize on this expanding user base.
A Vision for the Future
Both companies aspire to create a benchmark in the mobile game operation and distribution segment. As stated by Peng Cheng Bin, CEO of Qing Cheng, the goal is to be viewed as the 'Pinduoduo of the mobile gaming industry,' focusing consistently on gamer preferences and optimizing business models to improve market share.
Company Backgrounds
The9 Limited is a well-established internet company, listed on NASDAQ since 2004, positioned to explore a range of sectors, including online game operations and innovative technology applications. On the other hand, Chengdu Qing Cheng Network Science and Technology Co., Ltd. specializes in mobile gaming, having made significant strides since its inception in 2020. With that time, they have garnered 88.7 million registered users and achieved substantial user payment figures, indicating a strong business foundation.
Frequently Asked Questions
What is the focus of the joint venture between The9 and Qing Cheng?
The joint venture focuses on the operation and distribution of mobile games, targeting gamers in China's lower-tier markets.
How much profit is expected from the joint venture in 2025?
The joint venture anticipates exceeding RMB 80 million (approximately USD 11 million) in annual profits for 2025.
What are the ownership stakes in the joint venture?
The9 will hold a 51% stake, while Qing Cheng will possess a 49% stake in the joint venture.
What unique advantages does Qing Cheng bring to the partnership?
Qing Cheng brings valuable distribution capabilities, leveraging established channels in third-tier and lower-tier cities to enhance market reach and engagement.
How does The9 plan to enhance the gaming experience?
The9 aims to focus on quality content and continuous engagement through e-commerce strategies and incentives to build gamer loyalty.
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