Gold Farming Lawsuit

A US law firm has filed a class action lawsuit in the US on behalf of certain shareholders of Giant Interactive Group Inc., the game company in China that operates ZT Online.

The lawsuit claims that earlier this year Giant sold more than 57 million shares in its IPO, raising more than $886 million; however, Giant’s registration statement and prospectus for the IPO contained untrue and misleading statements.

For example, the plaintiffs say that Giant’s claims of “strong growth” in playing players and average revenues per user were inaccurate, in that Giant did not disclose a recent rule change aimed at curbing gold farming on ZT Online. The plaintiffs say that as a result of that rule change, the number of average concurrent users and peak concurrent users dropped in the third quarter of 2007.

A copy of the Plaintiff’s Class Action Complaint is available here.