China's largest online games company, Shanda Interactive Entertainment, logged 6.03 million active paid user accounts by the end of March 2008.

The figure represents an increase of almost 20 per cent in just three months, according to the company's latest quarterly financial report.

Shanda's first-quarter net revenue increased 46.5 per cent compared to the same period a year ago to a new quarterly high of $111.1m, the company reported.

Although net income at $41.2m was down 36 per cent compared to a year earlier, more than half of Shanda's profits in the first quarter of 2007 came from the sale of shares in leading local internet firm Sina.

However, the latest quarterly net income figure was down slightly when compared to the last quarter of 2007.

Shanda saw strong growth in casual games and MMORPGs, the latter producing revenue of $91.3m, an increase of 54.8 per cent year on year.

"We continue to drive the expansion of our paying user base through content upgrades, a unified platform and customised services," said Tianqiao Chen, chairman and chief executive at Shanda.

"This resulted in the double-digit quarter-over-quarter growth in active paying accounts for MMORPGs and casual games.

''As we look ahead to the remainder of this year, we believe that our diversified content portfolio and strong operating platform will continue to generate sustainable and scalable long-term growth for the company."

Shanda warned investors that it might be affected by a new higher tax rate of up to 25 per cent as revised government regulations come into force.