NCSOFT posts earnings surprise on 'Lineage M'
Poster for “Lineage M” / Courtesy of NCSOFT
By Jun Ji-hye
While most game firms here have underperformed in the second quarter due to delays in releasing new titles, NCSOFT has achieved surprise earnings on the continuing popularity of “Lineage M,” the mobile version of its massively popular multiplayer online role playing game (MMORPG), “Lineage.”
NCSOFT CEO Kim Taek-jin
In the April to June period, NCSOFT posted 436.5 billion won ($386 million) in sales with an operating profit of 159.5 billion won. The sales and operating profit surged 69 percent and 325 percent from a year ago, respectively.
Compared to the previous quarter, the firm's sales and operating profit decreased by 8 percent and 22 percent.
The performance of the company stands out compared to two other rivals, Nexon and Netmarble Games, which saw 2 percent and 40.8 percent decreases, respectively, in their operating profits during the April-June period from a year ago.
Their poor performance was attributed to increases in marketing and development expenses at a time when no new games have been released.
Except for Pearl Abyss, a developer of “Black Desert,” middle-sized game firms appeared to perform less as well, with their operating profit decreasing 20 to 30 percent from a year ago.
The prolonged popularity of the mobile megahit game “Lineage M” contributed greatly to the good performance of NCSOFT as sales of the firm's mobile games were tallied at 209.9 billion won, accounting for 48 percent of the total.
The firm said loyalty sales of its games surged 156 percent from a year ago thanks mainly to a success of "Lineage M" in Taiwan.
“Lineage M” was released in June last year. Since then, it has been the most popular game app on the Google Play Store here.
The prolonged popularity of “Lineage M” is considered unprecedented, given that the “lifespan” of a mobile game is shorter than that of a PC game.
The company said the update of “Lineage M” conducted in May to mark the first anniversary of its release has received positive response from gamers.
“Lineage M's update was very successful,” said Yoon Jae-soo, chief financial officer at NCSOFT, during a conference call. “We will continue to make consistent results through the update of Lineage M in the third quarter and the large-scale update of Lineage in the fourth quarter.”
The game company said it plans to release new MMORPGs ― “Aion Tempest,” “Blade & Soul 2” and “Lineage 2M” _ in the first half of next year.
The firm has also recently teamed up with U.S.-based video game development company, Harmonix Music Systems, for a brand new game on PC and console devices.
“Partnership with Harmonix is meaningful in that we paved the way for making inroads into console platforms in the western market,” Yoon said. “We expect mobile games to be developed through a studio in the United States to make meaningful results in the latter half of the year.”
Yoon added that the company is exploring mergers and acquisitions deals in Korea and the United States as well.