Nexon, NCSOFT hold course while Netmarble suffers loss

The Korea Times

The Korea Times

Business

Thu, November 30, 2023 | 02:38

Companies

Nexon, NCSOFT hold course while Netmarble suffers loss

Posted : 2023-02-09 15:00

Updated : 2023-02-10 16:38

Visitors to Nexon's booth at G-STAR game show wait in line to try out the company's new games at the BEXCO convention center in Busan, Nov. 17, 2022. Korea Times photo by Baek Byung-yeul

By Baek Byung-yeul

Nexon, NCSOFT and Netmarble ― Korea's top game companies ― have shown mixed performances in their 2022 earnings based on the success of their new games, according to the companies, Thursday.

Nexon, which garnered huge popularity last year with its new games such as belt scroll action game "Dungeon & Fighter Mobile" and multi-player role-playing game "HIT2," said that it generated an operating profit of 995.2 billion won ($790 million) in 2022.

The operating profit increased by 13 percent compared to 2021 thanks to the soaring popularity of "Dungeon & Fighter Mobile." The action game, a Grand Prize winner at the 2022 Korea Game Awards, topped the sales chart of Apple's App Store five hours after its launch on April 24, 2022.

NCSOFT also recorded 559 billion won in operating profit in 2022, up 49 percent year-on-year, thanks to the success of its role-playing game "Lineage W," which was released in the fourth quarter of 2021.

However, the other leading company Netmarble suffered an operating loss of 104.4 billion won in 2022 because the release of new games was delayed and the anticipated role-playing game "Seven Knights Revolution" fell short of expectations.

Sharing their outlook in 2023, Netmarble and NCSOFT, which held conference calls for their investors on Thursday, said that they plan to have a more prolific year by releasing new games.

Hong Won-jun, chief financial officer at NCSOFT, said the company will launch five new games this year including the much-anticipated role-playing game "TL."

"In addition to the launch of 'TL,' four games that are not categorized as MMORPG, will be released sequentially this year," Hong said. "We are also discussing IP (intellectual property) collaboration with other companies."

The CFO added that the company plans to reduce costs by hiring a limited number of employees and streamlining marketing costs this year.

"Labor costs in the first quarter are expected to decrease from the fourth quarter of last year due to the reduction in incentives. The increase in the number of employees will not be significant this year as we will continue to maintain the cost-efficiency stance," Hong said adding that marketing costs won't exceed 10 percent of its total revenue.

Netmarble also said it is pinning hopes on new games and the Chinese market. The company will seek to make a surplus from the second quarter when new games are scheduled to hit the market.

In the second quarter, the company will launch new games such as "Everybody's Marble: Metaworld," "Tower of God: New World" and "Grand Cross W" while it will release four new games in the third quarter including "Solo Leveling" and "Arthdal Chronicles."

"Last year, we recorded insufficient performance due to the delayed release of new games and the poor performance of new games. We will do our best to thoroughly manage manpower and costs in times of crisis and focus the company's capabilities on selected projects," Kwon Young-sig, CEO of Netmarble, told investors.

In addition to the three game companies, Krafton, best known for its online shooting game "PlayerUnknown's Battlegrounds" (PUBG) posted 751.6 billion won in operating profit for 2022, up 15.5 percent from a year earlier.

baekby@koreatimes.co.kr