Company Overview

We are a leading developer, operator and publisher of online games in China. Our online game revenues and game player base are among the largest in China. Through our extensive experience in the online game industry in China, we have created a scalable approach to develop, source and operate online games, as well as license our games to third parties. We use multiple channels to assemble a large and diversified game portfolio of various genres. We operate a nationwide, secure network to host hundreds of thousands of users playing simultaneously, and monitor and adjust the game environment to optimize our game players' experience.

We develop and source a broad array of game content through multiple channels, including in-house development, licensing, investment and acquisition, co-development, and co-operation. Through these channels, we have built a large, diversified game portfolio and a robust game pipeline.

Our game player base is one of the largest in China. We seek to strengthen our game players' loyalty by, among other things, closely monitoring our players' preferences and introducing updates, expansion packs and other game improvements in a timely manner. We believe the size of our game player base is a key factor in attracting and retaining both game players and additional game content.

We are a leader in the development and innovation of China's online game industry. In 2003, we launched Woool, which is our in-house developed and one of China's first domestically developed MMORPGs. We were among the first in China to adopt the item-based revenue model for advanced casual games and were the first to adopt this revenue model for MMORPGs on a large scale. This revenue model has since become the prevailing revenue model in China. In 2006, we established 18 Capital, which is one of the first investment initiatives in China focused exclusively on investing in independent online game development and operating studios.

Our online game business has been widely recognized in China through numerous industry and user awards in China. For example, games that have won awards include:

• Woool, which was voted the 'Most Popular Original Online Game in China's Online Game Industry in the Past Ten Years' at the Ten-Year China Online Game Industry Award Ceremony and one of the 'Top Ten Most Popular Games' at the 2008 China Game Industry Annual Conference;



• AION, an MMORPG which we launched in April 2009, which was voted one of the 'Top Ten Most Anticipated Games' at the 2008 China Game Industry Annual Conference; and



• Company of Heroes Online, one of our co-developed MMORPGs, which was voted one of the 'Top Ten Most Anticipated Games' at the 2008 Annual ChinaJoy Conference, a game industry annual conference in China.