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Highlights
- Strategic partnership aims to enhance marketing for the upcoming MIR game
- Joint venture projected to generate over RMB 100 million in annual profits
- Collaboration leverages AI technology to target millions of potential users
The9 Limited (Nasdaq:NCTY), an established Internet company, has announced a significant development in its growth strategy through a joint venture agreement with ShaoXing TongZe Network Technology Co., Ltd., an AI algorithms and big data marketing service provider in China. This agreement marks a pivotal step for The9, as it aims to bolster its marketing capabilities for the upcoming MIR game: MIR M.
Under the terms of the agreement, The9 will hold a controlling 51% stake in the joint venture, while TongZe will own 49%. The newly formed entity will be consolidated under The9 and will focus on implementing AI algorithms and big data marketing services to optimize promotional efforts for MIR M. This partnership is a strategic move to tap into the vast potential of AI technology within the gaming industry, addressing the current challenges of traditional marketing methods that are often inefficient and costly.
TongZe has committed to utilizing its expertise in AI and big data to engage over 100 million relevant users within the pan-MIR tag demographic and to reach more than 30 million paid MIR users. The joint venture is expected to achieve an annual profit exceeding RMB 100 million (approximately US$14 million) in 2025, further solidifying The9’s position in the competitive gaming market.
An interesting component of this agreement involves The9 granting TongZe restricted shares valued at RMB 42.5 million, calculated based on the exchange rate and NCTY share price at the time of issuance. These shares will be released in stages contingent upon the achievement of the joint venture's profit targets for 2025, creating a performance-based incentive for both parties.
George Lai, CFO of The9, expressed optimism about the collaboration, stating that AI technology is set to revolutionize traditional marketing strategies for online games in China. By leveraging TongZe's sophisticated algorithms and data capabilities, The9 aims to reach potential users directly, enhancing the marketing effectiveness for MIR M.
TongZe's CEO, Cai Guo Qing, emphasized the company’s dedication to delivering precise marketing services through its proprietary traffic distribution platform. This technology allows them to achieve high user return rates and increase operational efficiency. With partnerships already established with leading Internet giants like ByteDance, Tencent, Alibaba, and Baidu, TongZe has proven its ability to effectively engage millions of users across various categories.
The collaboration between The9 and TongZe is expected to not only elevate the marketing strategies for MIR M but also establish a framework for future joint ventures in the gaming sector. With the AI-driven approach to user acquisition, both companies are confident in their ability to meet and exceed the ambitious profit targets set for the joint venture.
