NCSoft operating profit increases by 165 percent

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NCSoft operating profit increases by 165 percent

Published: 14 Nov. 2014, 07:13

NCSoft saw its operating profit increase 165 percent year-on-year in the third quarter to 81.3 billion won ($74 million) due to lower marketing costs and the popularity of its Lineage and Ion online games.

During the same period, sales rose 25 percent from a year earlier to 211.6 billion won and net profit shot up 188 percent to 75.7 billion won.

Compared to the previous quarter, sales declined 1 percent, operating profit increased 25 percent and net profit soared 43 percent.

However, the online game company showed disappointing results abroad, with almost two-thirds of its revenue coming from Korea. Sales were 138.5 billion won in Korea, 38.6 billion won from North America and Europe, 10.1 billion won from Japan and 2.1 billion won from Taiwan. There was an additional 22.3 billion won from royalties.

According to the earnings report, overseas sales shrank from last year.

In the third quarter, overseas sales were 73.1 billion won compared to 138.5 billion won in domestic sales, while second-quarter overseas sales accounted for 49 percent of total revenue. In the same period last year, they were one-third of total sales.

The company’s increase in profit was largely due to lower operating costs rather than sales growth. Operating costs plummeted to 18.6 billion won from 130.3 billion won in the second quarter, when NCSoft launched the Wild Star game in North America and Europe in June and Guild Wars 2 in China in May.

Lineage was the company’s most popular game, followed by Lineage 2, Ion, Blade & Soul, Guild Wars 2 and Wild Star.

During a conference call yesterday, the online game company predicted that the marketing costs will increase significantly in the fourth quarter with the launch of Blade & Soul in Taiwan. It forecast that operating profit will fall slightly in the fourth quarter, compared to the third.

NCSoft also said it will introduce Blade & Soul TCG, a card battle game, which utilizes Blade & Soul, and an action shooting game called Master X Master (MXM).

“At the G-Star game show, which will kick off Thursday, we plan to release a series of new games such as Lineage Eternal and Project Hon,” said Hyun Moo-jin, head of management planning at NCSoft.

“Through the new large-scale, next-generation games with global competitiveness, we will secure a new growth driver.”

Meanwhile, NCSoft shares closed 1.49 percent lower on the Korea Exchange.

BY KIM JUNG-YOON [kjy@joongang.co.kr]