INDUSTRY OVERVIEW. The projections in the Analysys Report are based on the following general bases and assumptions:

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1 We have extracted and derived the information and statistics in the section below, in part, from various official government publications or other sources. We believe that the sources of this information are appropriate sources for such information and have taken reasonable care in extracting and reproducing such information. We have no reason to believe that such information is false or misleading or that any fact has been omitted that would render such information false or misleading. The Directors confirm that after taking reasonable care, there is no adverse change in the market information since the date of the Analysys Report which may qualify, contradict or have a material and adverse impact on the information in this section. The information has not been independently verified by us, the Directors, the Sole Sponsor, the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED] or any other party involved in the [REDACTED] and no representation is given as to it accuracy. SOURCES OF INFORMATION We commissioned Analysys Consulting, an Independent Third Party, to conduct an analysis of the international online industry and other relevant economic data. We have agreed to pay Analysys Consulting a fee of approximately RMB2, for preparing the Analysys Report, which we believe reflects prevailing market rates. Our Directors are of the view that the payment of the fee does not affect the fairness of the conclusions drawn in the Analysys Report. Analysys Consulting is an independent consulting firm based in Beijing, providing data, information, and advice to companies around the world in the industry of internet and information technology. The Analysys Report includes both historical and forecast information relating to the international online industry and other relevant economic data. Analysys Consulting relies on a variety of industry sources worldwide in determining its market data, including but not limited to, interviews with market participants, publicly released corporate information and the expertise of Analysys Consulting industry analysts. The projections in the Analysys Report are based on the following general bases and assumptions: Stable political environment. The global political environment is comparatively stable and there are no adverse political policies internationally to restrict the development of online. Steady economic growth. As the global economy continues to grow steadily in recent years, per capita disposable income has increased as well as the amount spent on online. In addition, due to globalisation, the development of crosscurrency payment services and online payment channels worldwide has provided support for the global publishing of online. 67

2 No revolutionary technological innovations. Although the rapid development of the internet, mobile web, 3D technologies and computer graphics have provided support for the development of online, for purposes of the projections made in the Analysys Report, we assume there will not be any revolutionary technological advances in the next five years. The Directors and the Sole Sponsor believe such projections and data to be reliable and not misleading in all material respects on the basis that Analysys Consulting is an independent professional research agency with extensive experience in their profession. GROWTH OF THE GLOBAL ONLINE GAMES MARKET Growth in the market size of the global online market According to Analysys Consulting, the electronic market comprises the online market and the console market. The online market is further comprised of three principal market segments: browser, client-based and mobile. According to the Analysys Report, as console have declined in popularity worldwide, online have become the main driver of growth in the global electronic game market. In 214, revenue generated from the global online market amounted to US$37,84 million, representing a 13.9% increase from 213. Analysys Consulting estimates revenue from the global online market will further increase from US$33,21 million in 213 to US$52,46 million in 217, representing a CAGR of 9.6% from 213 to 217. The growth of the global online market is primarily due to the following reasons: online are more accessible to game players, conforming to their routine habits; the supply of online has increased and the quality of online has improved; the number of the online game providers has increased due to the lower research and development costs compared with that of console ; and the popularity of mobile smart devices has brought forward the growth of the mobile game market. 68

3 According to Analysys Consulting, after the initial commercialisation of an online game, operators would normally adjust their marketing strategies based on the game data they collected in order to attract more game players. Analysys Consulting estimates that it normally takes six to nine months for a new online game to achieve its maturity. In addition, a browser game normally has a useful lifespan of three years while a mobile game normally has a useful lifespan of one year. Therefore, a browser game can typically generate considerable revenue for about 27 to 3 months while a mobile game can typically generate considerable revenue for about three to six months. Analysys Consulting notes that once an online game reaches its maturity, without continuous upgrades and enhancements, the game will reach the declining stage, during which it will experience decreases in players and revenue. The revenue is expected to decrease at around 1% per month. Upgrades and enhancements to an online game are often introduced to maintain its popularity and slow down its decline. Some game genres, such as card-based online which require players to collect cards and virtual items, will nevertheless be able to maintain players loyalty and experience slower decline than other game types. The following table sets forth the historical, estimated and projected size of the global online game market. Size of the global online market by revenue in , Market size (USD Million) 5, CAGR 9.6% 4, 3, 2, 1, 33,21 37,84 42,74 47,51 52, (E) 216(F) 217(F) 69

4 OVERVIEW OF THE MAJOR ONLINE GAMES MARKETS According to the Analysys Report, Asia was the largest online market, accounting for 63% of total revenue of the global online market in 214. The ARPPU of USD9.6 in Asia was the highest compared with those in other regions of the world in 214. This is due to the fact that Asia is the region which took the earliest steps in the development of online and there are more online game players in Asia than in any other regions of the world. North America was the second largest market, accounting for 16% of total revenue of the global online market, followed by Europe with 14%. The following chart sets forth the breakdown of the revenue of the global online market by region in 214: Market size of the global online market by region in 214 4% 3% 14% Asia 16% 63% North America Europe South America Others Source: Analysys Report 7

5 The following chart sets forth the ARPPU of the global online market in 214: ARPPU of the global online market in 214 Unit: USD Asia North America Europe South America Others Source: Analysys Report Asia According to the Analysys Report, Asia has consistently been a major market for online, boasting higher revenue for various online than any other regional markets. The market size of Asia s online market reached US$23,58 million in 214, and is expected to rise to US$33,43 million in 217 at a CAGR of 7.2%. The growth of online in Asia has dominated the growth of the global market. The relatively early commencement of online game development in Asia has resulted in a higher degree of quality of online game designs and a variety of online game genres. In particular, the PRC, South Korea and Japan are major online markets in Asia. 71

6 Market trend of online game in Asian electronic market The market share of online in the electronic game market in Asia grew from 7.9% in 213 to 73.4% in 214. According to Analysys Report, the market share of online in the electronic game market in Asia is expected to reach 78.% in 217. The following chart sets forth the historical, estimated and projected size of the online market in Asia and its future trend from 213 to 217: Size of the Asian online market in Unit: USD Million 5, 45, 4, 35, 3, 25, 2, 15, 1, 7.9% 8,28 Other electronic 2, % 8,56 23,58 Online 75.8% 8,73 27,41 Market share of online game in electronic game market 77.1% 9,7 3,54 78.% 9,43 33,43 8.% 78.% 76.% 74.% 72.% 7.% 68.% 66.% 5, 64.% (E) 216(F) 217(F) 62.% Europe According to the Analysys Report, revenue from the European online market reached US$5,26 million in 214. The European online market has grown at a faster pace than that of North America, and is expected to rise to US$8,53 million in 217 at a CAGR of 1.2%. There are approximately 4 million online game players in Europe, 46% of whom are paying users. European players have relatively higher acceptance levels in respect of paying for online and mobile, and approximately 67% of European online game players are also mobile game players. 72

7 Market trend of online game in European electronic game market The market share of online in the electronic game market in Europe grew from 26.2% in 213 to 28.% in 214. Furthermore, the market share of online in the electronic game market in Europe is expected to reach 36.4% in 217, according to Analysys Consulting. The following chart sets forth the historical, estimated and projected size of the online market in Europe and its future trend from 213 to 217: Size of the European online market in Unit: USD Million Other electronic Online Market share of online game in electronic game market 25, 36.4% 4.% 2, 26.2% 28.% 3.4% 33.6% 35.% 3.% 15, 1, 12,84 13,53 14,27 14,52 14,92 25.% 2.% 15.% 5, 4,56 5,26 6,24 7,34 8, (E) 216(F) 217(F) 1.% 5.% % North America According to the Analysys Report, the revenue of North American online market reached US$5,98 million in 214, and is expected to rise to US$9,24 million in 217 at a CAGR of 9.1%. 73

8 Market trend of online game in North American electronic game market Due to the development of online social networks and smart devices in North America, the market size of online in the electronic game market in North America increased from 25.3% in 213 to 27.1% in 214. According to Analysys Consulting, the market share of online in the electronic game market in North America is expected to continue to increase to 35.1% in 217. The following chart sets forth the historical, estimated and projected size of the online market in North America and its future trend from 213 to 217: Size of the North American online market in Unit: USD Million 3, 25, 2, 15, 1, 5, Other electronic 25.3% 15, % 16,12 Online 28.7% 16, % 16,83 5,24 5,98 6,62 7,83 Market share of online game in electronic game market 35.1% 17,11 9, (E) 216(F) 217(F) 4.% 35.% 3.% 25.% 2.% 15.% 1.% 5.% % 74

9 OVERVIEW OF PRINCIPAL MARKET SEGMENTS OF THE GLOBAL ONLINE GAMES MARKET According to Analysys Consulting, the online market further comprises three principal market segments: client-based, browser and mobile. The following table sets forth the historical, estimated and projected size of the principal market segments of the global online market in : Size of principal market segments of the global online market in Unit: USD Million 6, Browser Client-based Mobile 5, 6,68 4, 3, 5,15 5,41 5,84 15,43 6,29 15,79 16,3 2, 14,85 15,28 1, 13,21 17,15 21,47 25,43 29, (E) 216(F) 217(F) According to the Analysys Report, the main driving force for the growth in the market size of the global online market was primarily attributable to the growth in the market size of the browser and mobile game segments, with respective growth rates of 5.% and 29.8% in 214 as compared to that of 213. During the same year, the growth rate of the market size of the client-based game segment was 2.9% in 214 as compared to that of 213, which was relatively lower than the growth rates of the market size of both browser and mobile game segments. In 214, browser, client-based and mobile game segments contributed 15.5%, 44.7% and 39.8% of the total revenue from the global online market, respectively. Analysys Consulting estimates the proportion of revenue contribution by respective game segments will be 12.7%, 3.6% and 56.7%, respectively, in

10 COMPETITIVE LANDSCAPE During the Track Record Period, we were engaged in the development of browser and mobile and the licensing of our self-developed browser and mobile to licensed operators internationally. Competitive landscape of the global browser market segment According to the Analysys Report, the browser market segment has developed rapidly since 28. The development of various social network platforms in recent years has made it easier and at lower cost for game developers to open up new distribution channels and marketing platforms that facilitates the presentation and distribution of their to mass audiences globally, or to cater to specific markets not viable before, which contributes to the growth in the size of this market segment. In 214, revenue from the global browser market segment reached US$5,41 million, representing an increase of 5.% from 213. It is estimated that the market size could reach US$6,68 million in 217. The following table sets forth the historical, estimated and projected market size of the global browser market segment from 213 to 217: Size of the global browser market segment in , Market size (USD Million) 7, 6, CAGR 5.3% 5, 4, 3, 2, 1, 5,15 5,41 5,84 6,29 6, (E) 216(F) 217(F) 76

11 Competitive landscape of the global mobile market segment The development of the mobile web and smart devices has fulfilled the hardware requirements for the development of mobile. At the same time, some game developers have increased their investments in mobile, the range of some contents expanded and the quality of improved. The mobile markets around the world grew universally as opposed to only in selected markets. The development of social network platforms in recent years has made it easier and lowered cost for game developers to open up new distribution channels and marketing platforms that facilitates the presentation and distribution of their to mass audiences globally. The revenue from the global mobile market segment reached US$17,15 million in 214, representing an increase of approximately 29.8% compared to that of 213. It is estimated that revenue will expand further to US$29,75 million in 217 according to Analysys Consulting. The following table sets forth the historical, estimated and projected size of the global mobile market segment from 213 to 217: Size of the global mobile market segment in , 3, 25, Market size (USD Million) CAGR 17.6% 2, 15, 1, 5, 13,21 17,15 21,47 25,43 29, (E) 216(F) 217(F) Key market players of the global browser market segment According to the Analysys Report, competition in the global browser market has intensified in recent years, as thousands of browser game developers entered into the market with over ten thousand browser. Due to the relatively low development costs of browser as opposed to conventional electronic such as console, new developers find it easier to enter the industry due to lower entry barriers. As the top two key global browser game providers, King and Zynga only accounted for 9.1% and 5.5% of global browser market segment in term of revenue in 214, respectively, there is no dominated global browser developer in the industry. 77