Cellphone Online Game Business

Market Overview

Jun 2009

Larry Zhang

CEO

Troodon Enter-Tech Inc.

PC Online Game Business in China

— Of all the 14 public Chinese internet companies in US capital market, 6

are PC online game companies.

NASDAQ: NTES SNDA CYOU GA PWRD NCTY

— In 2009Q1, these 6 companies’ total market value is 12B USD(50%),

revenue is 505M USD (60% ) , net profit is 226M USD (70%),

— PC online game is by far the most successful internet business in China

Common conceptions of Cellphone Online Game

— Players only play Cell phone Online Game (COG) for short periods of

time

— Because game effect is limited by the small cellphone screen, players

would not pay as much as they pay for PC online games

— Cellphone Online Game (COG) businesses will have a much smaller

market than PC Online Game (POG) businesses

COG – Who are playing

According to our operations data

— Users play for 4.5 hours per day on average;

— most have their battery charger on when they play

— Users spend most of their leisure time in the game

COG User Characters

— Have a lot of free times

— Do not have any other better entertainment options

during their main free time

Conclusions

— COG users have limitations in entertainment activities during the majority of their free time

— They regard COG as their best and primary form of entertainment

COG – How much they pay

Business Index of Online Game Business

Peak Concurrent User (PCU) Average Concurrent User (ACU)

Average Revenue Per ACU (ARPU) = Product Revenue / ACU

Customers pay as much as, or even more than, what they pay for PC

online games

ARPU/ACU Compare (Virtual Item Selling Model)

08Q4 PC Online Game Company

ICYOU: 299 PWRD:202 GA: 212

09Q1 Troodon Games

190 ~ 300

� Incorporated in September 2002

� Major Business

Cell phone online game development and operations

� Product Concepts

Oriented towards 2.5G and 3G

Focus on interactive entertainment

Share enjoyment, provide instant pleasure

Troodon Brief Introduction

Satisfy customers’ need for interactive entertainment anytime anywhere

Casual Online GamesLight Games & Friends

Making

Cellphone

MMO

Mobile SNS for GamersIn production

Cell phone MMO

- Users are addicted and pay a lot

- Cash cow for Troodon

Casual online games

- Cultivate users’ habit of playing

online

- Future point of profit increase

WAP community for gamers

- Accumulate customer base

- Bring in new customers for games

Troodon Products & Services Structure

� Development of cellphone online games started in July 2002

� In Mar. 2004, Troodon’s first product, “Sword of Troodon”, won the Top 3 Games of The

Year Award at Qualcomm’s Global BREW Forum

� In Apr. 2004, Troodon’s product launched on China Unicom’s BREW platform, making

Troodon the first cell phone online game service provider

� In 2005, Troodon became profitable

� In May 2006, Troodon received first round investment from WIH

� In 2006, Troodon migrated its products from CDMA network to GSM network and changed

its business model from charging based on time to charging by items. These two actions

dramatically enlarged Troodon’s user base

� In Feb. 2008, Troodon get second round investment led by Steamboat (Disney)

� At present, Troodon is the No. 1 Market Share Leader in Cellphone Online MMO Game

market

Profile: Growth landmarks

COG market is still facing long-term obstacles

— Traffic fee is still not affordable by normal users

— User need more time to have the habit of going online with cellphones

— Too many kinds of phones and OS (iphone gphone symbian WM…)

— Carriers have too much influence in mobile internet business

COG market will become much bigger than POG market eventually

– COG’s user base is much bigger than POG user base

– Customers pay no less for COG than for POG

COG – How fast and how big the market will grow

Troodon Entertainment Technology

Thanks!

Larry Zhang

Email: larryzhang@troodo.com