NetDragon Websoft Inc. Announces First Quarter 2010 Unaudited Financial Results

[11 June 2010, Hong Kong] NetDragon Websoft Inc. (“NetDragon”, with its subsidiaries collectively the “Group”; Stock Code: 777), a leading online game developer and operator in China, today announced its unaudited financial results for the three months ended March 31, 2010.

Liu Dejian, Chairman and Executive Director of NetDragon, said, “We are pleased to announce our results for the first quarter 2010. Our revenue witnessed 4% sequential growth during the quarter, reinvigorated by the efforts of our experienced development and operational teams. Our net profit margin also rose to 15.2%, a significant improvement compared with the 0.9% recorded for the fourth quarter 2009, as our ongoing resource optimization program has resulted in reduced fixed costs and the streamlining of our enterprise.”

On a strategic level Mr. Liu commented, “In our overseas efforts, following the lead of “Eudemons Online”, “Conquer Online”, and “Zero Online”, we launched the traditional Chinese version of “Way of the Five” in Taiwan, which will further expand the market presence of NetDragon products in the region. In addition,our mobile software applications gained increasing popularity during the first quarter. The user base of our 91 series mobile phone applications grew steadily, laying a solid foundation for the meaningful development of this emerging business. Overall, we are very satisfied with our accomplishments in different IT and new media fields.”

Mr. Liu concluded, “We believe that the online gaming industry will continue to have a promising development outlook in the coming years. NetDragon will be dedicated to strengthening core competencies that are based on research and development and operations, to adapt to a rapidly-changing industry environment and to attract more users with excellent gaming products. Meanwhile, we will continue to invest in new businesses like mobile phone applications, and to take advantage of the huge business opportunities in the mobile and internet sectors in the 3G era. We will firmly seize opportunities to achieve sustainable development and enhance shareholder value via these moves.”

1Q 2010 Business Highlights
  • Traditional Chinese version of “Way of the Five” entered open beta in January
  • NetDragon received multiple awards including recognition as a “Top 10 Games Developer in China for 2009” and “Overseas Expansion Award for National Games for 2009” at the 2009 China Game Industry Annual Conference in January
  • Released a new Chinese expansion pack “Star Fleets” for “Zero Online” in February
  • Commenced closed beta test for “CJ7 Online” in March
  • NetDragon was elected as Fujian Animation Game Industry Association Chief and recognized as“Fujian Animation & Game R&D Centre” at the 2010 Fujian Animation & Game Industry Annual Conference
  • Cooperate with Saigon Tel over Vietnamese version of “Conquer Online” in March
  • Chairman and Executive Director of NetDragon Liu Dejian was honored with“10th Fujian Science & Technology Award for Youth” in March
Recent Developments
  • From April to June, released English, French, Spanish and Arabic versions of Conquer Online‟s EP “Legends Return Season Ⅰ”
  • Released a new Chinese expansion pack “Legends Return” for “Conquer Online” in May
  • Vietnamese version of “Eudemons Online” entered open beta in May
  • “Disney Fantasy Online” advanced into its final stage of open beta testing and signed Chinese female singer Li Yuchun as the game’s spokesperson in May
  • “Dungeon Keeper Online” and “Cross Gate” started 2nd round of closed beta testing in May
  • NetDragon was selected as the sole designated IT supporter for the Fujian Pavilion at the Expo 2010 Shanghai China
  • Showcased at Cross-Straits Conference and attended the Cross-Straits Copyright (Creative) Industry Summit Forum as the only corporate entity
  • Approved by extraordinary general meeting held in June, NetDragon has successfully acquired the entire equity interests of Fujian TianDi, which will also serve as NetDragon‟s future centralized campus.
Business Outlook
  • Open beta test of “CJ7 Online” is expected in July 2010
  • Open beta test of “Dungeon Keeper Online” is expected in 2H 2010
  • Games under development include: “Legend of the Dark”, “Cross Gate” and “Doomsday”
  • Our mobile business continues to make positive progress, as users of our mobile software applications continue to rise
Management Conference Call

NetDragon will host a conference call and webcast to review its unaudited financial results for the first quarter 2010 ended March 31, 2010 at 8:00PM Hong Kong Time / 8:00AM Eastern Daylight Time, June 11, 2010.

Details of the live conference call are as follows:

Time: 8:00PM Hong Kong Time / 8:00AM Eastern Daylight Time, June 11, 2010
Dial in numbers:
International Toll 1-617-213-8067
US Toll Free 1-866-770-7129
Hong Kong Toll Free 800-96-3844
South China Toll Free 10-800-130-0399
North China Toll Free 10-800-152-1490
Passcode 63389994

Replay service is available from 11:00PM June 11 to 12:00PM, June 18, 2010. Below are the replay numbers for different regions. International Toll: 1-617-801-6888; US Toll Free: 1-888-286-8010; Replay passcode: 13515369. A live and archived webcast of the conference call will be available on the Investor Relations section of NetDragon‟s website at Participants in the live webcast should visit the aforementioned website 10 minutes prior to the call, then click on the icon for “1Q 2010 Results Conference Call” and follow the registration instructions.

About NetDragon

NetDragon Websoft Inc. is a leading innovator and creative force in China‟s online gaming industry. Established in 1999, NetDragon has been operating and developing a broad range of MMORPGs since launching its first self-made title Monster & Me in 2002. In addition, NetDragon is China‟s pioneer in overseas expansion, having directly operated its titles in overseas markets since 2004 in English, French, Spanish and other foreign languages.

NetDragon‟s game portfolio comprises a range of massively multiplayer online games that cater to various types of players and gaming preferences. Current offerings include the games Way of the Five, Eudemons Online, Conquer Online, Zero Online, Heroes of Might & Magic Online, Disney Fantasy Online and Tian Yuan. NetDragon also has several games currently in development, including Dungeon Keeper Online, Doomsday, Cross Gate, Legend of the Dark and a new version of Ultima Online.

For investor enquiries, please contact:

NetDragon Websoft Inc.

Ms. Maggie Zhou (Investor Relations Department)
Tel.:  +86 591 8754 3120

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