Chinese mobile and online gaming company KongZhong (NASDAQ: KONG) has announced its unaudited Q2 results for the three months ending 30 June 2013.

Revenues were $43.6 million, down 13 percent year-on-year, and down 9 percent quarter-on-quarter.

Net income was $6.5 million, down 4 percent quarter-on-quarter.

Mobile slump

Breaking out its various activities, mobile game sales during the quarter were $3.7 million, down 40 percent year-on-year.

This is 8.6 percent of total revenues.

Gross profit from mobile games was $1.5 million, down 45 percent.

The division had a gross profit ratio of 40 percent, compared to 47 percent for KongZhong's online games business, which includes World of Tanks.

Shock of the old

As in previous quarters, KongZhong is still struggling to deal with the transition from feature phone to smartphone games.

But while its feature phone gaming business is now all about managing decline (and was actually up 25 percent compared to Q1 2013), the company is still struggling to transition PC MMOG developments teams to mobile.

"The decrease in smartphone mobile games revenues was due to a pause in new smartphone game launches in the 2nd quarter of 2013," the company stated.

"We expect to launch a number of new smartphone games in the 3Q and 4Q 2013 period,"

Indeed, KongZhong says it expected mobile game sales to $6 million in Q3.

The company ended the quarter with cash and equivalents of $191 million, compared to $185 million three months ago.

[source; KongZhong IR]