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Shanda – A Diamond in the Rough – Online Gaming Versus Online Gambling

Everyone thought that even though land-based casino revenues worldwide are taking a hit because of this incredibly tough recession that online gaming revenue on the other hand would be new to the tough economic times because of the little amount of expenses it takes to operate an online casino but this hasn’t been the case.

Even online casinos worldwide are starting to feel the pinch of a recession that borders on the depression and you can see this not only from the numbers but from all of their forward outlook on future revenues, but there are still some diamonds in the rough as far as online gambling companies to either gamble at or invest in through the stock market. One of the online gaming companies that is growing revenue and net income like gangbusters is the Chinese online gaming firm Shanda.

While everyone else is losing their shirt financially Shanda has announced incredible revenue gains for the third quarter of 2008. Their revenues have increased by 41% over last year’s third-quarter revenues and net income increased over 20% from last year.

Shanda has done so well because it has decided to focus more on online games and online board games rather than online gambling games . The potential for online game playing in China is incredible and if they could do this well during the recession imagine how well it will do when we come out of this recession. Even though online gambling hasn’t been hit as hard as land-based gambling in China, the one area that seems to be outpacing them all is the online game arena. I think that American gambling companies should learn a lesson from this company and try to shift their focus more so away from online gambling during the recession to online games because of the fact that online games have become almost a culture unto itself with the younger generation as we start to move online at a younger age every year.

I know this because I have a 42-year-old brother that still plays games on his Xbox with his kids and it has gotten to the point where they are almost addicted to these games so it goes to show that online games as well as online gambling have a big influence even culturally among our young and among our middle-age population.