Leading Entrepreneurs

Chen Tianqiao-CEO of Shanda Interactive Entertainment Ltd.

Shanda (Nasdaq:SNDA) is the largest operator of online games in China in terms of estimated 2003 game revenues according to International Data Corporation, or IDC, a leading market research firm. Shanda offers a portfolio of online games that users play over the internet. The games that Shanda operates are licensed to it by third parties as well as developed by Shanda itself in-house. The games that Shanda offers include The Legend of Mir II, which was the most popular online game in China according to users surveyed by IDC, and The World of Legend, which is the first online game that Shanda developed in-house.

Shanda operates both massively multiplayer online games, including massively multiplayer online role-playing games, or MMORPGs, and casual games. The interactive and group oriented nature of these games creates a strong sense of community among users, and the large size of Shanda's user base contributes to user loyalty and helps to attract new users. Shanda's MMORPGs allow thousands of users to interact with one another in a virtual world by assuming ongoing roles or characters with different features. The games are continuous, and players accumulate features and communicate with one another through instant messaging. Because MMORPGs require a significant amount of time to master, they tend to have a high degree of user stickiness, which means that users tend to spend longer amounts of time playing these games than using other internet applications. Shanda's casual games are less complex and time consuming than MMORPGs, but attract a broader range of users as well as more home users.

Shanda believes that the popularity of the online games that Shanda operates is attributable to operational infrastructure and the services Shanda offers that enhance the users' game playing experience, in addition to the qualities and features of the games themselves. In particular:

  • Shanda maintains a dedicated product management team for each of the games that Shanda operates, which forms operational plans, coordinates internal resources, and manages the online game's virtual community on an hour-by-hour basis;
  • Shanda has both in-house development capabilities as well as localization experience for licensed games;
  • Shanda has built a nationwide distribution and payment network;
  • Shanda has built a nationwide server network;
  • Shanda has developed a customer service system, which includes a 24-hour call center.

Shanda's objective is to maintain and enhance the position in the online games industry in China. The strategies for achieving this objective include the following:
  • Continuing to broaden Shanda's game offerings through in-house development, strategic joint ventures or alliances, acquisitions and additional licensing arrangements;
  • Enhancing Shanda's operational platform through additional investments in the technology infrastructure;
  • Using Shanda's user base, distribution and payment platform and other strengths to expand and diversify the sources of revenue;
  • Exploring alternative channels for delivering online entertainment across other media platforms.