Shanda reports 95 per cent fall in profits

China's largest online game operator, Shanda Interactive Entertainment, has reported that its net income for the first quarter is RMB 11.8 million (USD 1.5 million) - a quarter-on-quarter drop of 95 per cent.

Online game revenues were down by just under 30 per cent from last year, and 0.7 per cent from the last quarter to RMB 309.6 million (USD 38.6 million). Total revenues were down by 31.3 per cent year-on-year and 5.3 per cent quarter-on-quarter, standing at RMB 341.4 million (USD 42.6 million).

"Our first quarter financial results reflect stabilised online game performance as well as the continued development of our home strategy," Shanda CEO Chen Tianqiao said in a statement.

"The transition in our core business this quarter following the introduction of an in-game, item-based revenue model has proven to be relatively smooth."

Shanda adopted a new free-to-play revenue model for its MMO titles last December, following falling share prices and a decline in the number of subscribers. At the time, Chen warned that the move "might have a negative impact on the short-term revenues of our MMORPGs."