By Yoon Sung-won
NCSOFT is expected to have its profitability boosted as two much-hyped mobile games based on the company’s computer online game “Lineage” series are set to be released here starting next week, analysts said Monday.
The market watchers also projected that NCSOFT will benefit from its 8.6 percent stake in Netmarble Games, which is planning an initial public offering soon amid explosive growth.
Netmarble Games has decided to release its blockbuster mobile role-playing game “Lineage 2: Revolution” on Dec. 2. The game is based on NCSOFT’s computer online game “Lineage 2.” NCSOFT announced earlier that it will introduce “Lineage Red Knights,” another mobile game based on the “Lineage” series, in Korea on Dec. 8.
“As the introduction schedules of mobile games related to the Lineage series have been set, there will be no more uncertainties on NCSOFT at least through next month,” Eugene Investment & Securities analyst Chung Ho-yoon said. “In particular, Lineage 2: Revolution is one of the most anticipated titles in the domestic game industry as it has drawn more than 3 million users who have signed up in advance to play the game. It is highly likely that the stock price of NCSOFT will continue to increase until the middle of next month.”
Earlier in February 2015, NCSOFT and Netmarble Games signed an agreement to build an alliance in the mobile game business. In this partnership, NCSOFT said it will provide the intellectual property of its popular computer online games such as the “Lineage” series, “AION” and “Blade & Soul” to Netmarble Games so the country’s top mobile game company can develop titles based on those games.
Netmarble Games’ “Lineage 2: Revolution” is the first mobile game to be released under the partnership. If the game lives up to its market expectations and ranks in the top 3 on Google Play’s top grossing chart, NCSOFT is expected to benefit by tens of billions of won through annual loyalty gain next year, according to industry sources.
Daishin Securities also said the mobile games derived from the “Lineage” series will clearly benefit NCSOFT in the coming quarters.
“The mobile version titles of the Lineage series will be rolled out while the existing computer online games Lineage, Lineage 2 and Blade & Soul will continue to back up NCSOFT’s profitability,” Daishin Securities reported. “The company is expected to benefit with diverse mobile games based on its previous content.”
Analysts also said Netmarble Games’ continued growth is beneficial for NCSOFT as a stakeholder.
The partnership between NCSOFT and Netmarble Games is based on a stock swap deal. In February last year, NCSOFT acquired 9.8 percent of Netmarble Games shares while the latter acquired 8.9 percent share of NCSOFT.
In the meantime, Netmarble Games continued its rapid growth. It posted 63.6 billion won in operating profit and 359.4 billion won in sales in the third quarter, up 12.2 percent and 27.5 percent year-on-year. Expectations are even rosier for Netmarble Games in the coming quarters on the back of strong overseas market performances and the release of new titles including “Lineage 2: Revolution.”
“As the two companies are in the same boat, NCSOFT is expected to gain benefits with the increased corporate value of Netmarble Games,” IBK Securities said.