Motley Fool Loves MMOs
Even the Motley Fool gets the ticker of MMO.
For those of you not watching the stock market on a daily basis or listening to NPR's weekend financial updates, the Motely Fool is a long standing financial guru (now a group of gurus) discussing all things stock market. Today he defines MMORPG and why investing in some of them (especially those active in China) is a good idea:
If the acronym MMORPG is just a jumble of letters to you, then you're probably not a gamer. MMORPG stands for "massively multiplayer online role-playing games," and in China, those six letters are big business. Rule Breakers pick NetEase is one of the leaders of the industry, with a total equity value of $3 billion. It's joined by handful of competitors, such as fellow Rule Breaker Shanda Interactive (Nasdaq: SNDA), Giant Interactive (NYSE: GA), and The9.
So what's putting the spring in NetEase's step? Take your pick. The 28% year-over-year revenue growth in its most recent quarter is pretty attractive. The 40% profit growth is even more so. You may also take a fancy to the company's balance sheet, which contains a ludicrous amount of cash.
But perhaps most important of all, NetEase's business just got a major shot in the arm from Activision Blizzard (Nasdaq: ATVI), which said that it's going with NetEase to put two of its monster series -- Warcraft and Starcraft -- online in China. Though The9 has an existing relationship with3 Blizzard in China for the World of Warcraft game, this agreement should be huge for NetEase -- not to mention a big disappointment for The9.