Firms have history of clashes
Shanghai-based Nineyou is not the first Chinese online game company to clash with game developers.
Shanda, the mainland's leading online game company, was in dispute from 2003 to 2005 with South Korea's Actoz Soft and Wemade Entertainment, which developed Shanda's then most popular game, Legend of Mir II.
They claimed Shanda's World of Legend was a copy of Legend of Mir II and threatened to discontinue their licensing agreement.
'In essence, Shanda was operating Mir II with no proper licence at all at one point,' said an analyst. Claims were filed in Beijing and Seoul courts.
Similarly, Nineyou, which licenses the Audition dancing game from Korea's T3 Entertainment, introduced in September 2005 its own Super Dancer Online, which an industry source said was an exact copy of Audition.
T3 said it knew about Super Dancer Online. 'It is very similar to our game,' marketing director Yoora Kim said. 'Of course, we are unhappy about it. But Nineyou is our partner in China. We still want to work with them if not for the issue of royalty fee.'
Audition contributed 95 per cent to T3's total revenue of US$14 million last year, of which 25 per cent came from the mainland.
Shanda finally resolved its dispute with the game developers by buying a 38 per cent stake in Actoz, which owns 50 per cent of Legend of Mir II's copyright, for US$106.1 million in 2004.
That was a major portion of the US$152 million Shanda raised when it listed in Nasdaq in May 2004.
Would Nineyou buy up T3 to silence its partner?
Nineyou director of corporate management Jamsper Wu declined to comment.
'Why not? T3 is just a small Korean company,' said a venture capitalist. 'It just wants to get some cash while Nineyou is having [share sale].'
Seoul-based T3 had US$14 million in revenue last year, 95 per cent of it from Audition, of which 25 per cent came from the mainland.