Photo: game798.com

The video game company Changyou (畅游) which runs under the flag of Sohu was listed on the US Nasdaq market yesterday, seeing an overall share price increase of USD 16 per share to USD 24. At the same time this made the CEO of the company, Wang Tao, a multi-Billionaire.

This makes them the first Chinese Internet company to float this year and in the wake of the US financial crisis, this market floatation has come at a very good time for Wall Street. At 4am Beijing time on the 3rd April the company floated for the price of USD 20.02 per share, an increase of 25% and secured Changyou’s place in China’s online game industry as the provider of a number of famous games.

Compared to traditional industries, the rate that online game companies burn money is almost as starting as the rate at which the industry produces millionaires. With this latest floatation the Changyou company produced several millionaires.

According to information filed from Sohu to US authorities, the Changyou company’s Board of Directors is chaired by Sohu CEO Zhang Chaoyang and Sohu Vice Director Wang Tao acts as the gaming company’s CEO. Between them, the management team of 7 own 15.8% of Changyou shares. The youngest of all of these is 31, with Wang Tao a mere 33!

They have all become rich because of this floatation, especially Wang who owned 14.6% of shares in Changyou. Even going by the starting price of USD 16 per share, Wang is worth USD 120 million.

Photo: luisvilla

And it was not just the management that enjoyed the rich pickings of the stock market action. Out of 600 employees, 10 of them received became worth over a USD million and 100 became worth USD ten thousand. The average age of the company is 26.

Online gaming has already become the main source of income for many web portals, such as Sohu. Currently Chinese sites such as Sohu are investing a lot of R&D into online gaming services.

Rumor has it that Hong Shaojian was once the manager of Sina’s online gaming department, but due to a lack of support from management, he quit and joined their competitor Sohu instead. In the last couple of years, since Hong joined them, Sohu have seen the gaming side of their business boom exponentially.

For the year ending 2008, Sohu made net income of USD 200 million just through online gaming alone, accounting for an incredible half of the Chinese internet firm’s yearly takings.

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