By Baek Byung-yeul
Neople, a subsidiary of Korean gaming giant Nexon, became the first local gaming company to post an operating profit of over 1 trillion won in 2017.
The company widely expected to perform relatively strong this year, but concerns are growing over its increasing dependence on the single online game, “Dungeon Fighter Online,” in China.
According to corporate earnings data submitted to the Financial Supervisory Service, Neople posted an operating profit of 1.06 trillion won ($994.47 million) last year. The performance is a whopping 59.9 percent increase from the previous year.
Given its sales of 2017 were 1.15 trillion won, the operating profit rate was 93 percent.
Neople's strong performance came from the high popularity of “Dungeon Fighter Online.” The company developed the online game in 2005 and about 90 percent of its sales are from China.
Since Chinese tech giant Tencent obtained an exclusive license to operate the online action game in China in late 2007, “Dungeon Fighter Online” has been one of the most popular games there. In 2012, the online game drew more than 3 million concurrent players. Its popularity influenced Tencet to sign an extension with Neople to publish the game for 10 more years from 2016 to 2026.
In the long run, however, an industry source said Neople is too dependent on “Dungeon Fighter Online.”
“It is true that many have indicated that Neople is too dependent on the online game. However, the company has dispelled all those concerns, and keeps posting record-breaking annual profits,” the source said. “Nevertheless, Nexon and Neople should put more effort into expand its portfolio.”
Neople's mother company Nexon Korea posted operating profits of 885.6 billion won last year. The company is estimated to record some 800 billion won in sales and in the upper 400 billion won rage in operating profits in the first quarter of this year.
Meanwhile, other big gaming firms here are expected to show different performance in the first quarter of this year.
NC Soft is expected to post sales in the mid-400 billion won range and operating profits in the upper 100 billion won range, according to industry watchers.
These would be more than an 80 percent increase in sales and a 400 percent increase in operating profits from the same quarter last year.
Industry watchers say its mobile role playing game “Lineage M” played a significant role. Since its release in June last year, Lineage M sits at the top of Google Play app store. The mobile game recorded daily sales of 2.6 billion won to 2.9 billion won in the first quarter.
Another local giant gaming firm Netmarble is expected to post lower profits in the first quarter.
The company is estimated to post a mid-500 billion won in sales and between 80 billion won and 100 billion won in operating profits. Netmarble posted sales of 687.5 billion won in the first quarter last year.
The decreased performance comes from the company's lack of new titles. Also the mobile game “Lineage 2 Revolution,” which has been a main source of the company's profits, has seen a decline in its popularity. The mobile game, which recorded daily sales of 2.6 billion won in the fourth quarter of last year, is estimated to post 1.8 billion won in sales in the first three months of this year.