Charting Its Course Through Asia

Charting Its Course Through Asia

As far back as the middle of 2004, video game publisher Electronic Arts (ERTS) was making moves to establish itself in China (and across Asia). It’s since developed a substantial presence with a regional headquarters in Hong Kong and studios in Shanghai, Japan, Singapore and Australia. Monday, EA announced it was buying a 15% stake in Chinese video game company The9 Limited. The announcement is noteworthy, even if largely overshadowed by the more widely reported we’re going to China news from private equity firm the Blackstone Group (which announced China’s national investment agency was making a $3b investment with them to buy a 10% non voting stake).

In the Electronic Arts deal, EA is paying $167m to gain its 15% share of The9 (NCTY). EA will also give exclusive licensing rights to The9 for the distribution of EA’s multi player FIFA Online game in China. It’s a deal similar to one EA struck in South Korea with Neowiz in March (EA bought 19% for approximately $105m.)

China is a difficult market to understand and break into if you are aiming to sell products or services to Chinese consumers. (eBay (EBAY), Yahoo (YHOO) and other companies have learned that the hard way). Not only are customer behaviors different (in gaming, for example, the market tends to favor multi player online games so called Massively Multiplayer Online Role Playing Games [MMORPG] much more than in the West), but there are also the Governmental and Regulatory bureaucracies to navigate. Simultaneously trying to learn and manage marketing, sales and political considerations is not an easy task.

The EA deal seems to mark a new type of strategy for wishful corporate suitors. Rather than trying to break in like an adventure traveler with a backpack, a visa and a sense of adventure, companies are increasingly trying a more measured “Tour Guided” approach. They’re looking for partners who know the landscape and will guide them to the best places to visit. (Sony (SNE) embraced a similarly measured approach with its release of Casino Royale to the Chinese market in January). For EA, the FIFA Online license deal is likely the first of many steps on that walking tour. If it’s successful, I’d expect to see EA offer similar deals, or partnerships, on the release of other titles as well.

As far as the numbers go, China unquestionably presents a lucrative market opportunity. IDC has estimated there were 31m online gamers in China in 2006 and those gamers spent some 6.54b Yuan (approximately $855m at today’s exchange rate). Adjusting for fluctuations in exchange rates, a 20% share of that market would equal approximately $40m a quarter in revenue (For the March ’07 quarter, EA had gross revenues of $613m). Now licensing revenue alone from one game isn’t’ going yield a $40m payday, but it’s a start. And 15% stake in The9, a company with a billion dollar market cap, net margins above 30% (2006) and solid year to year growth isn’t a kick in the head either.

By working in tandem with local hosts that better understand the market, EA will increase its likelihood of success; something EA very much needs, considering, thus far, its Asian efforts have not lived up to expectations. As a consequence of this approach EA will give up some of the upside. But then as the clich goes, a little bit of something is a lot better than a great big bit of nothing .

It’s not an accident that EA’s website characterizes EA Asia as “the fastest growing region within Electronic Arts.” EA is being aggressive, but they seem to be doing so intelligently.

These deals (The9, Neowiz) could take months or years to provide any kind of bottom line improvement, but as far as long term strategy goes, EA seems to be setting out with a well structured plan for its growth in the region. The deals are also well timed to try and capitalize on the 2008 Olympics in Beijing and the 2010 FIFA World Cup being held in South Africa.

I wouldn’t jump to bet on Electronic Arts stock just yet, (if I was aiming for a piece of the Chinese gaming market, buying some of The9 Limited’s ADR’s would be easier. The9 seems to be pretty good at bringing other developers games to China (World of Warcraft is a popular 3rd party title they also distribute in China)) but EA’s efforts are worth putting them on a watch list.

With the return of former COO and President John Riccitello (who left in 2004 to co found private equity firm Elevation Partners), and a seemingly well thought out strategy (at least in some parts of the globe) EA probably rates some where between a hold and a buy.

Work Permit Rules in English Football

Work Permit Rules in English Football

Workers from the United Kingdom or any of the British overseas territories or British crown dependencies do not require any work permit or other documentation to work in England under British law. This includes the countries of England, Wales, Scotland, Northern Ireland, Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, the Falkland Islands, Gibraltar, Montserrat, the Pitcairn Islands, Saint Helena Island, South Georgia and the South Sandwich Islands, the Turks and Caicos Islands, the Isle of Man or the Isle of Jersey. As with all other workers, this applies to association football players.

Players who are citizens in Austria, Belgium, Bulgaria, Denmark, Finland, Estonia, France, Germany, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway, Portugal, Romania, Spain and Sweden can play in England without a work permit due to the United Kingdom’s membership in the European Economic Area, a single market agreement treaty tied to the European Union’s economic policies.

Players from the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia or Slovenia need to register for residence permits if they play for more than 12 months in a row for an English club, and players from Malta and Cyprus need to register for a residence permit immediately, but like the other European Economic Area countries, a work permit is not needed from these countries.

Anyone outside of the aforementioned countries can play in the Premier League or the Football League if they obtain a Governing Body Endorsement under Tier 2 of the United Kingdom’s five tier immigration scheme.

In order to get this endorsement, they need to have played in at least 75 percent of their country’s “A” or primary national team matches, which includes any World Cup or World Cup qualifying game, or any Continental tournament game. They also need to play for a country that has averaged at least 70th place or higher in the FIFA rankings over the past two years.

Governing Body Endorsements can last for three years or the length of the contract, whichever is shorter. Extensions can be granted for two years or the length of a contact extension, whichever is shorter.

Football Work Permit Regulations

Football Work Permit Regulations. In the English football system (known as soccer in the United States), all foreign players must obtain a.

How to Get a Work Permit in England

There are a variety of ways to get work permits in England depending on the type of work and how long you.

UK Work Permit Requirements

UK Work Permit Requirements. There are five categories of immigration into the United Kingdom, each with specific requirements and rules regarding employment.

Canadian Work Permit Rules

Canadian Work Permit Rules. Obtaining a work permit to temporarily work in Canada is a multi step process. Depending on your country of.

How to Get a Mississippi Gaming Work Permit

Mississippi is often overlooked in discussions of the country premier gaming regions, but the Magnolia State boasts the sixth and eighth largest.

British Football History

Actually British football dates back to the medieval England. British football has a long and glorious history rooted in England. This history.

NFL Waiver Rules

The NFL waiver system allows teams to sign players one team no longer wants.

How to Get a Work Permit or Visa for Singapore

Singapore, a small island nation in Southeast Asia, is one of the smallest countries in the world. For those entering Singapore for.

UK Football Rules Regulations

UK Football Rules Regulations. Football, known as soccer in the United States, is widely acknowledged as the most popular team sport.

Work Permit Rules for the UK. As an overseas national looking to work and live in the United Kingdom, you will be.