Game maker net profits all over the map in the third quarter
Korea's major game companies reported mixed third-quarter earnings this week.
Profits fell at NCSoft and Netmarble and rose at Kakao Games, Krafton and Nexon.
Netmarble, currently Korea’s third biggest game company by market cap, reported a 61 percent fall in net profit, coming in at 35.7 billion won ($30.1 million).
Revenue fell 5.5 percent on year to 607 billion won, while operating profit declined 70 percent to 26.6 billion won.
Disappointing game results were blamed, though figures were not disclosed.
Netmarble said it hoped for better end-year results as profit generated from SpinX will be reflected in the fourth quarter. SpinX, based in Hong Kong, is the world's third largest mobile social casino game company.
In August, Netmarble bought the company for $2.19 billion.
Netmarble is preparing to introduce a game that makes use of non-fungible tokens (NFT) and blockchain technology. It is also readying a new project related to the metaverse, and details will be revealed next year.
“We founded Metaverse Entertainment company and have been carrying out businesses related to metaverse idols,” Netmarble CEO Kwon Young-sik said during a conference call on Wednesday. The company was founded in August.
“We are planning on expanding our businesses and developing new intellectual property to connect them with games and video production.”
NCSoft’s net fell 35 percent on-year to 99.5 billion won in the third quarter as its mobile were crushed by Odin: Valhalla Rising, introduced in late June by Kakao Games.
Analysts had forecast 104.8 billion won.
Revenue fell 14 percent to 500.6 billion won, and operating profit plummeted 56 percent to 96.3 billion won.
Lineage M and Lineage 2M, the game publisher’s cash cows, achieved 308.2 billion won in sales during the third quarter, 12 percent less compared to the previous quarter and 21 percent less compared to the same quarter last year.
Blade & Soul 2, the newest addition to the company’s stable, generated 22.9 billion won of sales, failing to balance the weakness of Lineage games.
Sales of legacy PC online games fell 15 percent on-year, coming in at 101.6 billion won in the third quarter.
Lineage sales fell 42 percent on year to 29 billion won in the third quarter.
The company forecasts a better fourth quarter driven by the sales of Lineage W, its new mobile game.
Lineage W — the newest online massively multi-player roleplaying game (Mmorpg) available for mobile devices, computers and consoles — has been topping mobile games charts on both Google Play and the Apple App Store since its release on Nov. 4.
According to NCSoft, game players spent an average of 12 billion won during the first week and generated “all-time high revenue and user numbers,” although it did not disclose exact figures.
“Moving forward, we plan to release all our games new globally to expand our user base,” the company said in a conference call on Thursday. “We are also planning to release a game using non-fungible tokens next year, which we believe will open up new doors for us.”
Krafton, with a market cap of 26.4 trillion won and currently Korea’s biggest game company, reported a 26 percent increase in net profit and record revenue last quarter, driven higher by mobile and PC game sales.
Net profit was 178.3 billion won, while revenue was 521.9 billion won, 42.3 percent higher than the same period last year. Operating profit stood at 195.3 billion won, up 16.5 percent on year.
The company, which went public in August, is best known for its Player Unknown’s Battlegrounds (PUBG) shooting games, available as both mobile and PC versions. But it also offers online roleplaying PC games Tera and Elyon.
PUBG Mobile led strong sales, pulling in 380.5 billion won in the third quarter, which was 31.1 percent more than the same period last year. PC Games made 129.5 billion won, jumping 111.7 percent.
Krafton will expand its business portfolio by carrying out mergers and acquisitions and making investments in a diverse range of companies.
It has been harvesting PUBG to make other products, such as a webtoon series and short films. A new PUBG game, the PUBG: New State, was made available on Thursday in 200 countries across the world.
Earlier this month, Kakao Games reported a record net profit, credited to the popularity of Odin, its newest mobile game. The game publisher posted a 44.3-billion-won net profit in the third quarter, up 64.4 percent on year.
Revenue came in at 466.2 billion won, rising 209.7 percent on year. Operating profit also jumped, up 101.3 percent on-year to 42.7 billion won. Revenue and operating profit were also records.
Tokyo-listed Nexon did not have any major additions to its lineup of games this year, but still recorded a 132 percent jump in net to 16.3 billion yen ($143.1 million) on steady sales of its existing games and bitcoin profits.
Nexon credited 16.1 billion yen to foreign exchange gains on dollar-denominated cash deposits and 1.7 billion yen to bitcoin earnings.
Revenue slid by 4 percent on year to 79.4 billion yen, but operating profit gained 8 percent to 27.6 billion yen.
with the Korea JoongAng Daily
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