NCSOFT sales fall short of W1 tril.

NCSOFT’s mobile game “Lineage: Red Knights”

By Yoon Sung-won

NCSOFT failed to post 1 trillion won in cumulative sales last year, the company said in its regulatory filing, Tuesday.

The game company said it recorded 983.6 billion won ($864.17 million) in sales last year, up 17 percent from 838.3 billion won the previous year.

Whereas Netmarble Games posted over 1.5 trillion won in sales last year on the explosive popularity of its new mobile game “Lineage 2: Revolution.”

Netmarble Games joined the 1 trillion won sales club in 2015, outperforming NCSOFT to become the No. 2 in the Korean game market based on annual revenue following Nexon.

In 2016, NCSOFT’s operating profit was 328.8 billion won and its net profit was 271.4 billion won, up 38 percent and 64 percent year-on-year, respectively. The company posted 237.5 billion won in operating profit and 166.4 billion won in net profit in 2015.

In the fourth quarter, its sales reached 284.6 billion won and operating profit 101.7 billion won, up 31 percent and 56 percent year-on-year. Quarterly net profit was 66.8 billion won, up 39 percent from the fourth quarter of 2015.

NCSOFT said its sales in North America and Europe have grown by 25 percent year-on-year. In particular, its online game “Blade & Soul” posted 182.3 billion won in sales last year, up 60 percent from a year earlier thanks to strong performance in North America and Europe.

According to the earnings report, the company’s regional sales proportion broke down to 613.9 billion won from Korea, 155.2 billion won from North America and Europe, 49.4 billion won from Japan and 42.9 billion won from Taiwan.

The “Lineage” series still remained the biggest income source for the company. The original “Lineage” alone generated 375.5 billion won in sales last year while its sequel “Lineage 2” added 77.1 billion won to the annual revenue.

In the mobile sector, NCSOFT released its first mobile game “Lineage: Red Knights” in the fourth quarter last year, based on the original “Lineage.” It plans to release “Red Knights” in China through a local publisher in the first half of this year.

Besides direct sales performance of its games, its intellectual property (IP) brought in 122.1 billion won in royalties last year. In the fourth quarter alone, the company recorded 41.5 billion won in royalties, thanks to the popularity of Netmarble Games’ “Revolution,” which is based on NCSOFT’s game IP.

“We have proved the power of IP in the mobile sector,” NCSOFT CFO Yoon Jae-soo said during a conference call, Tuesday. “We have also confirmed our position as a mobile game development company.”

Earlier last month, Netmarble Games said it will release more blockbuster mobile games based on NCSOFT’s game IP such as “Blade & Soul” this year. The CFO said NCSOFT is also developing its own mobile game based on “Blade & Soul” and has talked with Netmarble Games to avoid a direct clash in the market.

Meanwhile, in the computer online sector, NCSOFT will release action role-playing game “Lineage Eternal” this year. The battle arena game “Master X Master” will be released in the United States in the second quarter and in China in the latter half, Yoon said.