China's online gaming industry proved resilient amid a tough market Monday, with both NetEase.com (NTES) and Sohu.com (SOHU) posting gains.
IBD's Computer Software-Gaming industry group rose sharply over the past two weeks to No. 47 in Monday's IBD, up from No. 124 in early January.
The largest company in the group is Japan-based Nintendo (NTDOY), with more than $15 billion in revenue last year. Next in line is Activision Blizzard (ATVI), based in Santa Monica, Calif., with revenue of $4.4 billion.
Both hold weak Composite Ratings and fell Monday.
NetEase.com added more than 1% Monday; Sohu.com rose a fraction. Both are based in China, tapping the country's insatiable urge for online gaming and social networking.
NetEase.com saw more than 90% of its $820 million in revenue last year from online gaming services, charging users fees to play. Advertising sales accounted for most of the remainder.
NetEase's focus is on what it calls massively multiplayer online and role-playing games, or MMORPG. The games take place in virtual worlds and can involve many thousands of simultaneous players.
The newest addition to this market was the 3-D StarCraft II game, introduced in late March. The game was developed and is owned by Activision Blizzard.
NetEase.com found support at its 10-week moving average as StarCraft was introduced in late March. Shares are now extended above that buy range.
NetEase.com holds a solid 98 Composite Rating from IBD.
Sohu.com also operates MMORPGs. It gets just over half its revenue from online gaming revenue. The games are developed and operated by Sohu.com's majority-owned subsidiary, Changyou.com (CYOU), which debuted on the Nasdaq in 2009.
The stock cleared a short cup base March 29. It's now 6% above the 90.58 buy point. Sohu.com carries a best-possible Composite Rating of 99.
The company announced Monday that it would report first-quarter results before the market opens April 25.
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