KongZhong predicts better times ahead but Q3 FY13 mobile sales down 12% to $4.7 million

Now releasing 2 core games every quarter

KongZhong predicts better times ahead but Q3 FY13 mobile sales down 12% to $4.7 million

Chinese mobile and online gaming company KongZhong (NASDAQ: KONG) has announced its unaudited Q3 results for the three months ending 30 September 2013.

Total revenues were $44 million, down 12 percent year-on-year.

Of this, sales from mobile games were $4.7 million, down 11 percent.

KongZhong made a net loss of $2.7 million, which included $3.6 million of impairments on intagible assets and longterm investments.

The company ended the quarter with $205 million in cash and equivalents.

Mind the gap

Breaking out the performance of mobile games, KongZhong launched two new smartphone titles during the quarter, generating sales of $1.5 million.

But overall sales were hit by the continuing longterm decline in its feature phone gaming business. This had sales of $3.2 million.

More generally, KongZhong had 1 million daily active mobile players, and 46,000 paying accounts during the quarter.

Average revenue per user was RMB 198 (around $32.50)

Put up or shut up

Putting the quarter into context, CEO Leilei Wang pointed to significantly increased marketing costs.

As well as more mobile user acquisition, KongZhong spent big on branding for PC title World of Tanks, which it operates in China for Wargaming.

"I believe we were successful during the quarter ... and have set a good foundation for strong growth in our internet games business and smartphone game business for the coming year," Wang said.

"This includes the upcoming launches of World of Warplanes and Guild Wars 2 as well as an expected average of two new smartphone games to be released to the China market in the hardcore segment of the market each quarter."

The company predicts feature phone mobile game revenues of $2 million and smartphone revenues of $3.5 million in Q4.

[source: KongZhong]

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