Motley Fool Loves MMOs

Even the Motley Fool gets the ticker of MMO.

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.

The Motley Fool believes these are 5 All Star Stocks on Fire. If you really want to bone up on your economics, check out the Ten Ton Hammer exclusive interview, EVE Online Economics from Leipzig.

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