Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
NCSOFT accelerates earnings recovery
NCSOFT's R&D Center in Seongnam, Gyeonggi Province / Courtesy of NCSOFT
By Nam Hyun-woo
Game studio NCSOFT is showing signs of a fast profitability rebound, posting a continued earnings growth for the second quarter of this year.
NCSOFT announced Tuesday its consolidated sales and operating profit for the second quarter stood at 382.4 billion won ($275.13 million) and 15.1 billion won.
The numbers are up 4 percent and 71 percent year-on-year, respectively. Compared to three months earlier, sales grew 6 percent and operating profit soared 189 percent.
The improvements follow a turnaround in the first quarter of this year, after the company posted operating losses throughout the second half of last year — its first operating loss in 26 years.
Given that the second quarter is typically an off-season with no major new releases, the results are drawing favorable market responses.
PC game sales rose 10 percent from the previous quarter to 91.7 billion won, with its massively multiplayer online role-playing game (MMORPG) AION posting 13 billion won in revenue, up 53 percent from three months earlier. Mobile game sales grew 6 percent to 219 billion won, as Lineage 2M expanded its global service to Southeast Asia.
“One encouraging sign in the second-quarter earnings is that the decline in its legacy intellectual properties appears to have bottomed out,” Mirae Asset Securities analyst Lim Hee-seok said. “The company is entering a period when it can maintain momentum ahead of the launch of AION 2.”
AION 2, a sequel to the company’s 2008 hit-title AION, is under development as an MMORPG featuring more action-oriented gameplay, including expansive player-versus-environment content, a manual control-based combat system and enhanced freedom of aerial movement. NCSOFT plans to launch the title in the fourth quarter of this year.
“The success of AION 2 is expected to have a positive impact on the performance of next year’s new titles as well as talent acquisition,” the company said during its earnings call. “Sustaining the current positive momentum hinges on the game’s actual success.”