Rumor: GAPP to Fine Netease Under RMB 500 Mln

17173.com, 1/07/10

An industry source claims that China's General Administration of Press and Publication (GAPP) will fine Chinese online game operator Netease (Nasdaq: NTES) between RMB 150 mln and RMB 500 mln, less than expected.

European brokerage MainFirst had previously said that if Netease failed to comply with GAPP's requirements, World of Warcraft would lose Internet access and GAPP would be forced to shut down the game. MainFirst also said that if GAPP were to levy fines, the penalty would amount to 5-10 times that of Netease's illegally obtained revenue, approximately RMB 750 mln to RMB 1.5 bln. WoW's previous China operator, The9 (Nasdaq: NCTY), reported RMB 150 mln in average monthly revenue from the game.

Editor's Note: For more background on this topic, please see "GAPP: WoW Verdict Coming" MD 1/5/10 and "Netease Submits WoW Self-Criticism to Government" MD 12/31/09 issues.

Keywords: regulation WoW Netease Internet penalty GAPP NTES online gaming

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