Chinese gaming company The9 has reported a net loss of $45.2 million for the 2011 fiscal year, a 43 percent decrease over the company’s 2010 net loss of $76.3 million. Its overall loss in the third and fourth quarters was $34.9 million, up 240% from the first half of the year, when the company reported an $11.7 million loss.
The company attributed the loss to an increase in marketing expenses for its game Firefall, as well as increased research, development and headcount expenses due to the establishment of overseas offices.
The9’s net revenues improved in its third and fourth quarters, increasing to $8.7 million, up 7 percent from its earnings in the first half of the year, but down slightly as compared to same time last year. Overall the company’s net revenues for 2011 were $16.9 million, up year-over-year from 2010’s reported net revenues of $15.4 million.
The company has struggled to find its footing since losing the extremely lucrative Chinese license for World of Warcraft in 2010. The company is currently expanding its mobile operations, creating its own mobile-social network called The9 Game Zone that uses GREE’s OpenFeint platform and launching a mobile gaming fund worth $100 million with Chengwei Ventures, ChinaRock Capital Management and China Renaissance K2 Ventures. The company also recently inked a deal to run Sony’s Chinese PlayNow app store.
According to its balance sheet, The9 still has more than $170.2 million in cash and equivalents on hand, slightly more than its market cap of $168.3 million. In trading today, the company’s shares dropped 4.42 percent to $6.70 each.