NetEase, Inc., through its subsidiaries, operates an interactive online community in China. The company provides Chinese language content and services through its online games, Internet portal, and wireless value-added services businesses. Services Online Games Services The company’s online games business focuses on offering massively multi-player online role-playing games (MMORPGs) to the Chinese market. These MMORPGs are played through the Internet in ‘virtual worlds’ that exist on networked game servers to which various players connect to interact with each other. The company develops and operates MMORPGs that are targeted at or localized to the Chinese market. In addition, Blizzard Entertainment Inc. agreed to license various online games to Shanghai EaseNet for operation in the People’s Republic of China. The company works with a range of distributors to distribute its point cards to gamers across China. Physical prepaid point card distribution channels include wholesalers, Internet cafes, software stores, supermarkets, bookstores, and newspaper stands, as well as convenience stores primarily in Guangzhou Province, Shanghai, Beijing, and in various second tier cities. Virtual prepaid point cards could be purchased online by debit card, credit card, or bank transfer using its Wangyibao online payment platform. The company has also developed an online casual game platform with various multi-player games. MMORPGs: The company’s principal internally developed games include Fantasy Westward Journey, Westward Journey Online II, Tianxia III, Ghost, and Heroes of Tang Dynasty II (an upgrade of Heroes of Tang Dynasty). These games are MMORPGs set in classical Chinese-themed fantasy worlds, of which Fantasy Westward Journey and Westward Journey Online II are 2D games, Ghost and Heroes of Tang Dynasty II are 2.5D games and Tianxia III is a 3D game. In addition, the company has also commercially launched Soul of the Fighter, a 3D item-based ARPG, in July 2012, and is currently testing various new types of 2.5D and 3D games. Web-based Games: Web-based games are games that players can access and play via the Web without downloading and installing any software. The company’s principal Web-based games, such as Storm of Empires, use an item-based revenue model. Casual Games: The company’s online casual game platform, iTown, provides various multi-player games, such as billiards, card games, and mahjong. Casual games can be played to a conclusion within a short period of time. The basic versions of such games are available free-of-charge, and the company sells virtual game enhancements, such as options for changing the appearance of the gameplay or advanced tools, which players can use in the game, utilizing its prepaid point card system. As of December 31, 2012, iTown offered approximately 30 casual games to users. Internet Portal The company’s Internet portal business, which is conducted through the NetEase Websites, offers Chinese Internet users a network of Chinese language-based online content channels, community and communication services, including news content, community forums, micro-blogging, blogging, mobile-based applications, open courses (which offer users access to recorded content from classes and lectures) and online video (which is a platform that provides various categories of video products, including news, entertainment, music, sports, financial and life). The company also offers other Web-based applications and services, including a full text Chinese language search engine and a Web directory, to enhance their Internet experience. 163.com The main homepage of the NetEase Websites, www.163.com, provides a destination for Chinese Internet users to identify and access resources, services, content, and information on the Internet. The NetEase Websites aggregate, organize and deliver information to meet the needs of Internet users in China. The company’s media channels provide users with an efficient and easy way to explore and utilize a wealth of information and content organized around various topics. The NetEase Websites include various channels focusing on news, automobile, sports,