NCSOFT's operating profit decreases 15 percent in Q4

By Yoon Sung-won

Korean gaming firm NCSOFT said Monday it posted 74.9 billion won ($62.42 million) in operating profit in the fourth quarter of last year, down 14.3 percent from the same quarter a year earlier.

According to a regulatory filing, it recorded 237 billion won in sales, up 1 percent year-on-year. Net profit stood at 42.2 billion won, plunging 32 percent from the previous year.

As a result of the decline, NCSOFT became the nation’s third-largest game company, conceding the second spot to Netmarble Games, Korea’s largest mobile game company.

Netmarble said on Feb. 2 that it posted 65.6 billion won in operating profit in the fourth quarter, up 51 percent year-on-year. Its annual sales reached 1.07 trillion won last year.

As market competitors such as Nexon and Netmarble have been rapidly diversifying into the mobile game sector, NCSOFT, which has had a firmer basis in the online computer game segment, has been relatively slow to do so. This has been pointed out as a major weakness.

The company said its MMORPGs “Lineage” series and “Blade & Soul,” both which have broke record sales last year, have been its main income sources.

In particular, “Blade & Soul” generated 113.9 billion won in annual sales, up 38 percent from the previous year. The title was launched in North America and Europe on Jan. 19, drawing in over 1 million users in its first week.

Based on its strengths in gaming intellectual property of existing titles, the company plans to roll out mobile game titles starting this year.

“As we have concentrated on preparation for new titles by solidifying our existing game intellectual property and diversifying income sources at home and abroad, we will accelerate the launch of new computer online games and mobile titles on the global stage,” NCSOFT Chief Financial Officer Yoon Jae-soo said during a conference call, Monday.

NCSOFT is expected to launch “Blade & Soul Mobile” globally this quarter. The mobile game will be distributed by China’s largest game publisher Tencent.

Following “Blade & Soul Mobile,” the company said it plans to roll out the mobile game “Lineage Red Knights” in the first half of this year as well as “Lineage Mobile” and “AION Legion.”

In the online computer game sector, NCSOFT plans to run closed beta tests of much-hyped titles “Lineage Eternal” and “Master X Master (MXM)” within the first half of this year.

NCSOFT closed at 240,000 won on the Seoul bourse, the same as the previous business day.