Cyou Company Presentation V3


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Cyou Company Presentation V3

  1. 1. Company Presentation<br />May 2010<br />
  2. 2. About Changyou<br />Changyou (NASDAQ: CYOU) is a leading online game developer and operator in China, principally focused on MMORPG development and operation.<br />Subsidiary of Limited (NASDAQ: SOHU)<br />Market cap.: US$1.7 billion*<br />FY2009 revenues: US$267.6 million<br />Key operating metrics**<br />Aggregate registered users: 87.40 million<br />Aggregate APA: 2.4 million<br />ARPU: RMB201<br />2<br /><ul><li>As of February 25, 2010</li></ul>** For the quarter ending March 31, 2010. APA refers to active paying accounts. ARPU refers to average revenue per active paying account.<br />
  3. 3. Sohu<br /><ul><li>Leading internet brand in China with over 10 years operating history </li></ul>3<br />Sohu – Leading Internet Brand in China<br /><br />Leading Chinese <br />internet portal<br /><ul><li>Sole official sponsor of the 2008 Beijing Olympic games
  4. 4. Large user base of over 290 million registered accounts</li></ul><br />3rdgeneration search engine<br /><br />Wireless value added <br />service provider<br />Sohu Group<br /><ul><li>Over 250 million daily page views</li></ul><br /><ul><li>Chinese gamers’ top choice for game information
  5. 5. 30 million registered accounts, 70 million daily page views and 4.5 million unique visitors</li></ul><br />First Chinese youth <br />online community<br /><br />Leading game <br />portal in China<br /><br />Real estate <br />information portal<br />
  6. 6. Why Changyou?<br />Ability to Build and Extend Product Lifecycle<br />Successful Game Franchise<br />Strong Game Development Capabilities<br />Extensive Marketing Network<br />4<br />1<br />2<br />3<br />4<br />
  7. 7. Ability to Build and Extend Product Lifecycle<br />5<br />Feedback center and customer service team<br /><ul><li>’s professional game editors test our games prior to launch
  8. 8. Collect game players’ feedback through multiple channels
  9. 9. In-game instant messaging
  10. 10. 24-hour telephone hotline
  11. 11. Online and offline research
  12. 12. Online surveys
  13. 13. Online discussion forums
  14. 14. Events for game players</li></ul>Most popular online game portal in China<br />Data Collection<br /><ul><li>Over 520 game development personnel
  15. 15. Develop and release regular game updates once a week and expansion packs every few months
  16. 16. Review game players’ and game testers’ feedback
  17. 17. Timely communicate game player’s feedback to product development team
  18. 18. In-depth analysis of industry data</li></ul>Analysis and Integration<br />Application<br />Game operation team<br />Product development team<br />Feedback-driven game development creates successful game franchises with consistent growth.<br />
  19. 19. TLBB – A Successful Online Game Franchise<br />6<br />TLBB ranks in the top 3 surpassing both WoW and AION.<br />* Source:, based on a survey of over 40,000 internet cafes in China<br />
  20. 20. DMD – A Highly Anticipated Game<br />7<br />Success factors behind TLBB<br />Lessons learned from competitors<br /><ul><li>Focus on game-playing experience and extending lifespan of our games
  21. 21. Frequent game updates and release of expansion packs based on game players’ feedback
  22. 22. Strong development team inherited from our successful in house developed game, TLBB
  23. 23. Sufficient time for game development and internal testing before commercial launch</li></ul>2010 Most Anticipated Online Game by Game Players (Second Place)<br />– Annual China Game Industry Conference, 2009<br /><ul><li>Extensive analysis of game players’ demands to introduce innovative game features
  24. 24. Strong sales team in second and third-tier cities
  25. 25. Systematic management of distribution of ads to significantly increase their effectiveness
  26. 26. New game style – cartoon-style graphics with selectable 2D, 2.5D and 3D graphic modes</li></ul>Effective marketing strategies<br />Differentiating game features<br />We believe that these are the building blocks for success for DMD.<br />
  27. 27. Extensive Marketing Network<br />8<br />Pre-launch game review<br />Marketing support<br />Large user base<br /><ul><li>Direct links to our games on the Sohu portal
  28. 28. Advertisements for our games on Sohu’s, the leading game portal in China
  29. 29. Our games are reviewed and critiqued by’s experienced game editors prior to their launch, thereby improving the quality of our games
  30. 30. Tap into Sohu’s290 million user base by marketing across the Sohu Group and through Sohu’s single-user ID system</li></li></ul><li>Overseas Office Distribution<br />U.K.<br />U.S.<br />Beijing<br />India<br />Korea<br />Veitnam<br />Malaysia<br />
  31. 31. Why Changyou?<br />Understand game development<br />Respect creativity and quality products<br />Market intelligence and localization support<br />Extensive feedback collection system and game reviews, if required<br />Abundant operation and technical experience<br />Subscription-based to MTX conversion, proprietary anti-hacking and anti-cheating technologies<br />Strong marketing platform and support<br />At least 6 months market warming and US$1.5 million marketing budget during OB<br />10<br />