Shanda Networking Co Ltd, China's largest online gaming firm, aims to generate more returns from its gaming development by selling tie-in products to its Web-savvy customer-base offline.

　　The Nasdaq-listed company entered a strategic alliance yesterday with Beijing-based Federal Software Holding Co Ltd, China's largest software distributor and retailer, to sell products from various online games operated by Shanda in Federal's 500 retail stores.

　　Shanda Xin Hua Networking Co Ltd, a joint-venture controlled by Shanda Networking to extend its brand from online gaming to merchandise, signed the agreement with Federal.

　　"The revenue coming from the game-character product business is four times more than that from the game itself in mature markets such as America and Japan," Chen Tianqiao, CEO of Shanda Networking Co Ltd, said. "China is an exciting fledgling market that holds great opportunity for us."

　　Chen expects revenue from game-related products will hit 10 to 15 percent of its core online gaming business in the future, taking intellectual property, a tricky issue in China into consideration.

　　Shanda Xinhua cashed in on 10 million yuan (US$1.2 million) from publishing official game strategy guides last year and projects a four to five-fold increase in sales this year. It published almost ten guide books every month with a printing volume of 100,000 to 150,000 copies each during the first three months of this year.

　　The firm markets its guide book sales mainly through private wholesalers and retailers. It plans to enter the distribution channels this year, according to William Zhu, general manager with Shanda Xin Hua Networking Co Ltd.

　　Besides creating Shanda merchandise inspired by online games, the firm plans to develop image licensing and has been in talks with Motorola to license images for use on Motorola products.