Shanda Interactive Entertainment, China's largest online games firm, has signed an exclusive licensing deal with a Korean developer for a new online game.

The news comes after Shanda encouraged investors with a 66 per cent leap in quarterly profits in the third quarter.

"We saw remarkable growth in our online role-playing games [RPGs] and casual games. Net revenues from our RPGs increased 6.6 per cent from the second quarter to $73.4m," said Shanda president Jun Tang.

The company has licensed Dragon's Nest, a 3D massively multiplayer online RPG from Korea's Eyedentity Games.

The two companies did not reveal the terms of the deal, although similar licensing agreements in the past have involved an upfront payment to the developer followed by royalties.

Shanda is expected to release Dragon's Nest in China early in 2009, Citigroup Global Markets analyst Jason Brueschke said in a briefing to clients yesterday.

"[Shanda has] regained its reputation among Korean developers based on its strong operational capabilities over the past two years," he said.

Shanda posted net profits of $31.8m in the third quarter, on sales of $88.8m. The company attracted new subscribers by adding new content to popular older games, analysts said.

"As in the past seven quarters, we are releasing expansion packs [for] almost every single RPG. That is how we keep our games continuing to grow," said Jun.