The Mobile Internet Report Key Themes*

China Serves as Proxy & Leads World in Virtual Goods Monetization –
$2 Monthly ARPU $1.5B Revenue in 2008E
Virtual Goods Sales in China, 2006E – 2013E
2006E 2007E 2008E 2009E 2010E 2011E 2012E 2013E
Total virtual item sales ($MM) $547 $889 $1,464 $2,207 $3,132 $4,307 $5,763 $7,359
Y/Y Growth -- 62% 65% 51% 42% 38% 34% 28%
Game virtual item sales ($MM) $296 $490 $841 $1,288 $1,858 $2,564 $3,418 $4,439
Y/Y Growth -- 66% 72% 53% 44% 38% 33% 30%
Paying gamers (MM) 18 26 37 46 55 64 74 84
Y/Y Growth -- 44% 43% 25% 20% 17% 15% 14%
ARPU (US$ per Month) $1 $2 $2 $2 $3 $3 $4 $4
Y/Y Growth -- 15% 20% 23% 20% 18% 16% 14%
Non-game virtual item sales ($MM) $252 $399 $623 $918 $1,274 $1,743 $2,346 $2,920
Y/Y Growth -- 58% 56% 47% 39% 37% 35% 25%
Source: Non-game virtual items include virtual gifts / ringtones / wallpapers / avatars + accessories. Richard Ji, Morgan Stanley
349
Research estimates.