Chen Haozhi, founder of Chukong Technology, developer of trending casual game Fishing Joy, disclosed that the company planned to launch IPO in the U.S. market within this year (report in Chinese). Amid rising zeal for the gaming industry, rumor has it that Qihoo 360 (NYSE: QIHU) planned to acquire Chukong Technology with $400 million. Chen denied the rumor, adding that the value of the company could be much higher than the speculated.
Chen explained that the Chukong’s products have been installed in more than 250 million mobile devices, while there are only 300 million mobile game users in China. The monthly active user of Chukong amounted to 60 million, accounting for 20 percent of the market. The firm generated 70 million yuan ($11.36 million) of revenue per month, around 11 to 12 yuan per user. Based on the installation rate, Chen expected Chukong’s annual revenue to exceed 1 billion yuan this year and users to surpass 600 million (source in Chinese).
He predicted that the company’s annual revenue would score 2 billion yuan next year with a net profit of 300 million yuan. Chen noted that if the Chukong could attract 120 million monthly active users with about 30 yuan in ARPU, the company’s annual revenue will reach 3 billion to 4 billion yuan in the long term. In addition, Chukong will make revenues from future services, such as, music and videos, and the overseas market may be another performance driver.
The firm’s revenue mainly derived from the homegrown Fishing Joy, licensed mobile games and advertising. With more than 600 staff, Chukong has received $32 million in three rounds of financing within 20 months.
With 14 years of entrepreneurial experience, Chen has been involved in online retail site Joyo (later became Amazon China), online artwork trading and auction platform Sssc.cn and collaborative translation site Yeeyan.org. He entered gaming sector in 2010, receiving wide attention for developing the reigning game Fishing Joy.