Our online games business focuses on offering massively multi-player online role-playing games to the Chinese market, known as MMORPGs. MMORPGs are played over the Internet in “virtual worlds” that exist on game servers to which thousands of players simultaneously connect and interact. In addition, we are beta luanching a casual game platform, named "POPO Game" during the third quarter 2005 in order to capture the online game market that is expanding to non-MMORPG genre of games.

We both develop and license online games that are targeted at the Chinese market, and we strive to provide the highest quality game playing experience to our users. Our current MMORPG titles include our in-house developed titles in commercial mode, “Westward Journey Online II” and “Fantasy Westward Journey”, and one licensed title in Beta testing mode, “Fly for Fun.” We expect that "Fly for Fun" will be ready for commerical launch in the second half of 2005.

In the pipeline, we have some upcoming in-house developed MMORPGs, including a new 2.5D game as well as a 3D game we’ve been developing over the past year, both planned for release in the second half of 2005.

Our MMORPG titles can be accessed from any location with an Internet connection by registered users of the NetEase Web sites. Players of these games select a specific character to begin play. Over the course of play, these characters build up experience and enhanced game capabilities, wealth, weapons and other possessions, all of which may be carried over into subsequent gaming sessions. Players develop their characters according to choices they make within the construct of the game and interact with computer operated characters as well as with other players that are playing on the same network server. Players are able to communicate with each other during the game through messaging or chat, allowing them to coordinate their activities with other players to form groups and achieve collective objectives.

We believe providing strong, dependable customer support is a key component to succeeding in the online games business. Our customer service center provides 24 hour-a-day customer service and technical support and can be contacted via telephone or e-mail. In addition, our customer service specialists, known as game masters, also appear as characters within the game world and provide assistance and guidance to players, as well as maintain an atmosphere of fun and fair play.

To pay for game playing time, players use our prepaid point card system. Point card distribution channels include wholesalers, Internet cafes, software stores, supermarkets, bookstores and convenience stores.