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Online gaming leaders pull earnings surprises

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Burning Crusade helps lift The9 above rivals

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The online gaming sector's strong momentum on the mainland is continuing, with most industry leaders posting better than expected profits in the final months of last year.

Of the top five online gaming companies, Netease, Shanda, The9 and Perfect World beat analysts' revenue and profit forecasts for the fourth quarter. The9 reported the best results, after launching Burning Crusade, the highly anticipated upgrade to its hit game World of Warcraft in September.

'[The9] benefited from a complete quarter of the Burning Crusade,' said Alicia Yap, a Citigroup analyst.

Sales growth of 34 per cent quarter on quarter and 50 per cent year on year again made The9 the mainland's third-largest online gaming company. Revenue was US$61.3 million in the fourth quarter, beating Giant Interactive's US$59.6 million. Profit soared 125 per cent to US$11.8 million from last quarter, though still 18 per cent lower than a year earlier.

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Still, Ms Yap said The9 may struggle to keep up the pace. Gamers had waited long for Burning Crusade, launch of which had been delayed since last summer, and that anticipation drove up sales substantially in the fourth quarter.

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