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NetEase – Chinese Gaming

I’m sitting 11 000 meters in the air, over the Siberian tundra writing this post, if someone told me ten years ago that I would be able to do that, I would probably have laughed. Technological advance often goes quicker than we can imagine and it also opens up opportunities for substantial new revenue streams. One such area is how mainstream gaming has become. About 20 years ago when I was a kid growing up, playing NES, early PC-games like Prince of Persia etc, gaming was definitely not mainstream – it was something mostly nerds did. And it kind of stayed nerdy when internet and multiplayer gaming started. We nerds played games like Warcraft, Starcraft, Quake and Counter-Strike. Then around the time when Playstation 2 had gained some traction, something in our society started to change – gaming started to be cool and the gaming industry grew enormously. With the entrance of smartphones the world was ready for the next level of gaming – suddenly even our mom’s became gamers, playing Candy Crush in the subway on their way to work. I think we all can agree that games in our daily lives through PC, Consoles and Phones are here to stay and most of us are willing to spend a few dollars now and then for this entertainment.

Throughout the years I have always been impressed with Blizzards game making, in the same way as Nintendo they built a whole world of characters that they re-use in all kind of games. It has become so big that they are just launching a Warcraft movie (I’m watching it tomorrow). In my opinion they also deliver products with immense quality. Blizzard was bought by Activision and one way to gain exposure to their games would be to just invest in Activision Blizzard, but I think I have found a perhaps riskier but better way to play the investment and that is through NetEase. Let’s see what type of company this is.

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