Shanda Games CEO resigns amid weak performance

Head of Chinese online game developer tenders his resignation over the company's poor performance and his "health condition".

The CEO of Chinese online games developer, Shanda Games, has resigned from his position following the company's weak second-quarter performance.

In a statement Sunday, Shanda Games announced Tan Qunzhao will leave his roles as CEO and chairman of the board of directors. Tan was appointed CEO in January 2010 when Diana Li resigned.

The company's chief producer Zhang Xiangdong will assume the CEO position, while Chen Tianqiao--who is one of the board members--will become board chairman.

Tan said he resigned because the company had performed below the expectations of its board of directors and investors as well as his "health condition". "As CEO of the company, I am responsible for the company's overall performance and consequently have tendered my resignation," he said.

In a separate report Sunday, the company announced its second-quarter financial results. Compared to the same period last year, its net revenue dipped 14.4 percent to 1.13 billion yuan (US$178.7 million). This reflected a 18.6 percent drop from the previous quarter , it noted.

China accounted for 92 percent of Shanda Games' net revenue in that quarter, but saw revenue drop 16.6 percent year-on-year and 19.3 percent quarter-on-quarter to reach 1.04 billion (US$164.5 million).

The remaining 8 percent of the company's revenues came mainly from overseas and in game licensing, game operations and advertising. Revenue from these segments increased to 90.1 million yuan (US$14.2 million), compared to 73.1 million yuan (US$11.5 million) in the same period last year.

However, performance for these markets fell from the previous quarter's 100.8 million yuan (US$15.9 million) revenue. Shanda Games attributed this fall in revenue to the sale of Mochi Media during the first quarter.

The company's net income dropped 9 percent year-on-year and 11.8 percent quarter-on-quarter to 336.8 million yuan (US$53.2 million).

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