China's The9 invests in 2 online game firms -company source

SHANGHAI, Feb 3 (Reuters) - China's The9 NCTY.O is investing in two online game companies to expand its development capabilities after losing a license to operate its hit title and main breadwinner last year, a company source said.

The company was investing in U.S. game developer Red 5 Studios and Hangzhou-based Fire Rain, said a company source, who declined to be named because the matter has not been made public.

Local media reported that The9 would invest $100 million in Fire Rain. California-based Red 5 Studios said on Jan. 27 that it had reorganised its management team after receiving “additional investment from a strategic partner”.

The9 declined to comment, while Fire Rain and Red 5 studios could not be reached for comment.

Game developer Electronic Arts ERTS.O has a 16 percent stake in The9, which last April lost the right to operate Activision Blizzard's ATVI.O World of Warcraft in China to NTES.O. Shares and profit at The9 have plummeted since then.

China’s online game market was worth $4 billion in 2009 according to Beijing research firm iResearch. China had 80 million gamers last year.