Perfect World Entertainment, a subsidiary of Perfect World (NASDAQ:PWRD), will showcase the much anticipated Neverwinter, a free-to-play action massively multiplayer online role playing game (MMORPG) based on Dungeons & Dragons, at three of the largest summer gaming conventions this month in Germany, Indianapolis and Washington.
Neverwinter is developed by Cryptic Studio and was first publicly displayed at the Electronics Entertainment Expo in 2011. However, Perfect World’s acquisition of the U.S.-based Cryptic Studios pushed the launch of the game to 2012. Perfect World Entertainment recently confirmed the release of Neverwinter in early 2013, which will give developer Cryptic Studio more time to enhance the content and add extra features to the game. Cryptic, along with publisher and licensor Perfect World, aims to make Neverwinter one of the biggest MMORPG of 2013.
International Game Operations To Drive Future Growth
While its Chinese user base has shrunk over the past couple of years, dragging down its overall revenue growth, we estimate Perfect World’s international gaming revenue to have nearly doubled in 2011. Perfect World has been focusing on expanding its presence in international markets such as Europe, America and Japan through its subsidiaries as well as by licensing its games to other game publishers in countries such as Indonesia and Brazil.
Perfect World’s international game operations outside China in markets such as North America, Europe and Japan account for close to 20% of our $20 price estimate for the company. Going forward, we expect Perfect World’s overseas gaming licensing to drive revenue growth as its Chinese game operations have gradually taken a back seat.
Our price estimate of $20 for Perfect World stands at a premium of over 80% to the current market price.