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ZTE announces 2011 financials: turnover up, profits down, political scandals tricky
ZTE's annual earnings report is out and it's a mixed bag for the Chinese company with aspirations to go west. Revenues grew 23 percent to 86.25 billion RMB ($13.7 billion) but net profit fell a hefty 36.6 percent to 2.06 billion RMB ($327 million). More than half of ZTE's operating revenue came from overseas as the company moves into the global space and, while some of that cash came from its smartphone business, much more poured in from the infrastructure arm that supplies LTE equipment to networks. At the same time, ZTE is having to deal with accusations that it sold $131 million worth of snooping gear to Iran to monitor its own citizens, forcing the company to limit its operations there -- although it insists this won't have any impact on its future income.
Chinese App Store customers can now pay with their own currency
Apple's iTunes Store in China received a major upgrade this week. The store now accepts payment in the local currency, the renminbi (RMB), and lets users replenish their iTunes account using bank cards from over a dozen Chinese banks. Previously, the Chinese iTunes store only accepted US dollars which made it difficult for Chinese customers to make purchases. Most iOS owners set up their iTunes account and only downloaded free apps. Now Chinese customers can add money in 50, 100, 300 and 500 yuan increments. Not only will this bring in additional revenue for Apple, it may also curb iOS app piracy which is booming thanks to apps that help iOS owners circumvent Apple's App Store restrictions. This change may also cut back on "black card" usage by Chinese iOS owners. These cards use compromised credit card accounts to add money to iTunes accounts. In the past, China has been the source of illegal iTunes activity. In 2009, Chinese hackers broke the iTunes gift card algorithm and flooded the market with fraudulent cards. [Via Penn Olson and AppleInsider]
China legislates 20% tax rate on virtual currency profits
While much of the world's gold farming activity is based in mainland China, the black market industry operates in violation of the law. Despite this, a large part of the problem in curbing illegal activities in China is that there's a substantial divide between what the law states is illegal and the actual enforcement of those laws. This may well be the case with the law passed last week by China's State Administration of Taxation, which will impose a personal income tax rate of 20% on profits made from virtual currency.Juliet Ye at The Wall Street Journal's "China Journal" blog reports: "The policy would cover China's legions of online gamers, who can use online virtual currency to buy better equipment and new powers for their online warriors. But it also affects millions of others who use virtual currencies on instant-messaging services and Web portals." The widespread use of virtual currencies in China spurred last year's restrictions on exchanging virtual currency into RMB. If the new law becomes a reality rather than a technicality in the lives of China's internet users, it will be a substantial change in virtual economics in the country.
CEO of CCP Games addresses EVE's continuity through turbulent times
Recent world events and their impact on global finance threaten to have dramatic consequences on the game industry. While an economic downturn isn't something to be taken lightly, it is unique in comparison with similar problems in the past -- now real world economic issues can potentially ripple into virtual economies, just as they certainly impact the companies who create MMOs and virtual worlds. CCP Games, founded in Reykjavik, Iceland, is a case-in-point. There has been commentary and speculation among EVE Online's playerbase and in the media about how Iceland's economic woes may impact the game. The CEO of CCP Games, Hilmar V. Pétursson, (aka CCP Hellmar) addresses these concerns in his dev blog, "Born Global."
