KongZhong Corporation, through its subsidiaries, provides digital entertainment services for consumers in the People's Republic of China (the PRC). The company operates three main business units, such as Wireless Value-Added Services (WVAS), Mobile Games, and Internet Games. WVAS Business The company provides interactive entertainment, media and other interactive services to mobile phone users in China through various second generation standard, or 2G, technology platforms, including SMS, IVR and CRBT, and through various second and a half generation standard, or 2.5G, technology and operating platforms, including WAP and MMS, which offer graphics, richer content and more interactivity than 2G wireless services. The company offers various WVAS, such as mobile games, pictures, karaoke, electronic books, mobile phone personalization features, entertainment news, chat and message boards. Customers can access these services directly from their mobile phones: by using its access code or by choosing a feature pre-loaded in select models of handsets; from a telecommunications operator’s portal or Web site; and from its wireless Internet Web sites, including Kong.net. The company provides its services mainly pursuant to its cooperation arrangements with the telecommunications operators and their provincial subsidiaries. Its WVAS business consists of the operation of various mobile Internet sites, such as Kong.net, its integrated mobile portal; ct.cn, its mobile Chinese literature site; and ko.cn, its internally-developed mobile games community site. Mobile Games Business The company develops and publishes mobile games for mobile phone users in the PRC. Its internal development team develops mobile games based primarily on the Java technology, and its development resources also support various other mobile operating platforms, including Symbian, iOS and Android. The mobile games the company develops include action, role-playing, and leisure games. Thee company separates its mobile games business into two main divisions: downloadable mobile games, and online mobile games. In 2012, the company acquired Noumena, a developer of cross-platform smartphone mobile game engines. Internet Games Business The company owns Shanghai Dacheng Network Technology Co., Ltd. (Dacheng), a developer and operator of Internet games. It develops Internet games based mainly on its proprietary technologies, which include its proprietary game engine (Dazzler 3D), game development platforms and online game billing system, all developed by its internal team. In particular, the company’s Dazzler 3D game engine enables it to create 3D graphics and visual effects, and provides the technical foundation for creating features in its games. Furthermore, the company’s game development platforms gives it the capacity to develop Internet games within approximately 6 to 24 months and to update its Internet games frequently in response to players’ preferences. The company offers its 3D massively multi-player online role-playing games (MMORPGs), Loong, EMoFaZe, XiaKeXing, and ShengMoZhiXue. In addition, it licensed the World of Tanks game from WarGaming.net LLP in 2010. The company uses an item-based revenue model for its games, whether internally developed or licensed, under which players can play the game on the Internet free of charge, and has to pay for purchases of in-game virtual items, such as performance-enhancing clothing, weapons, accessories, and pets. The company distributes its electronic prepaid game cards and online points, which can be used to purchase in-game virtual items, to players through multiple payment channels. Strategic Relationships The company has established cooperation arrangements with telecommunications operators, mobile handset manufacturers, content providers, and other business partners to produce, promote and market its services. It provides its WVAS and mobile games primarily pursuant to cooperation agreements with China Mobile and other telecommunications operators. In addition, the company cooperates with various mobile handset manufacturers, which make selected handset models with a WVAS icon in