The9 Invests In Red 5, Fire Rain

Still recovering from the loss of its operations contract for World of Warcraft in China, Shanghai-based MMO company The9 Ltd. has reportedly invested in two online gaming companies, recently-troubled U.S. developer Red 5 Studios and Chinese firm Fire Rain. Though local media sources say the operator has invested nearly RMB 100 million ($14.67 million) into Hangzhou-based Fire Rain and might have acquired the developer outright, The9 declined to comment on the deal, according to Reuters. Red 5, which was founded in 2005 by former members of Blizzard's World of Warcraft team and has been working on an unannounced MMO project since, recently laid off an undisclosed number of workers as it underwent a reorganization and a change in direction. Consumer website Kotaku reported that the company was even close to shutting down before an unnamed backer stepped in. Existing Red 5 backer Benchmark capital denied that the studio was near bankruptcy, but today's revelation from The 9 reveals, at least, that the studio indeed has a new investor. "Recently, the team formed around a new direction and took on additional investment from a strategic partner in the online games industry," the developer said in a statement last week. "Red 5 remains committed to releasing a AAA quality, online title targeted for a worldwide release." The Irvine-headquartered company did not explicitly state whether it's continuing its original project, which was rumored to be a massively multiplayer online first-person shooter, or if it's now focused on another title for its new backer. It did, however, admit that it needed to restructure its team in order for it to meet current goals. The9 has struggled since Activision Blizzard chose not to renew its contract with the company to operate World of Warcraft in China last June, handing those rights to rival operator NetEase. Losing that deal resulted in the firm's third quarter revenue dropping 94 percent to RMB 25.5 million ($3.7 million) compared to RMB 408.4 million ($59.8 million) during the same three-month period last year In its third quarter earnings call last November, The9 revealed it had several titles under development, including MMORPGs Road Fighter and Miracles Ultimate X, casual action game Tiny Tribe, and an online 3D casual RTS called Monster of War. The company currently operates several MMOs such as Soul of the Ultimate Nation, Granado Espada, and FIFA Online 2.