Chinese online publisher Changyou (NASDAQ: CYOU) has announced its Q3 unaudited financials for the three months ending 30 September 2013.

Revenues were $183 million, up 10 percent year-on-year.

This was a record for the company but lower than analysts' expectations resulting in a sharp decline in the company's share price. It was down 20 percent on the day. 

88 percent of sales came from Changyou's online games; up 7 percent year-on-year.

Online advertising revenues - mainly via its 17173.com website - consisted of 9 percent of revenues; up 29 percent year-on-year.

Net income was $72.8 million, down 6 percent year-on-year.

Maturing fast

The main activity for the company during Q3 was releasing updates for its key online games Tian Long Ba Bu (aka Dragon Oath), Wartune and DDTank.

Changyou experienced a decrease in monthly active accounts, however, down 21 percent year-on-year to 31 million as TLBB's audience churned and some accounts were closed down.

In contrast, activity at 17173.com boosted used numbers across what Changyou calls its 'platform channels' (i.e. all its online operations) to 99 million, up 15 percent year-on-year.

Going mobile

In terms of future activity, Changyou is looking to roll out mobile apps to further increase 17173.com's readership.

"These are exciting developments that bring us a step closer to our goal of becoming a global platform for the online games sector," commended president Dewen Chen.

"In the fourth quarter, we will significantly ramp up our marketing investment to promote our line-up of new games, mobile applications and other internet products in both China and overseas, so as to further expand our user base and aggressively capture the market potential," promised CFO Alex Ho.

Changyou ended the quarter with cash and cash equivalents and short-term investments of $525.6 million, up $55.2 million from three months ago.

[source: Changyou]