Game companies report good 2021, though many one-offs

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Game companies report good 2021, though many one-offs

Published: 09 Feb. 2022, 18:27 Updated: 09 Feb. 2022, 19:06

Mabinogi Mobile, an upcoming game developed by Nexon's subsidiary Dev Cat [NEXON]

Gaming companies, beaten up by disappointed gamers and investors, have reported strong 2021 earnings, though some of the profits are due to crypto investments other one-offs.

Nexon's net profit doubled in 2021. The Seoul-founded, Tokyo-listed game company's net was 114.9 billion yen ($995.1 million), up 104 percent.

The company posted a 6.57 billion yen gain from foreign exchange, and the value of Nexon's other assets also grew, a company spokesperson said. Nexon's 2021 revenue and operating profit fell compared to 2020, when it hit record-high figures.

Revenue fell by 6 percent on year to 274.5 billion yen in 2021, and operating profit fell by 18 percent to 91.5 billion yen.

"We focused on developing new franchises last year, which meant that we didn't get to release new games as much," said a company spokesperson. "Plus, we hit a record in sales in 2020. The new Blue Archive game came out in November, but two months weren't enough to lead the annual growth trajectory."

Nexon hopes for a better 2022 with a new lineup.

It will start offering the mobile version of its Dungeon Fighter roleplaying game on March 24. Other games also set for release this year include KartRider Drift, HIT2 and Mabinogi Mobile.

Kakao Games' Odin: Valhalla Rising [KAKAO GAMES]

Kakao Games reported a 671 percent surge in annual net profit in 2021, beating analyst expectations by almost fivefold with the success of its online game Odin: Valhalla Rising released last August.

The Korea Exchange-listed company posted 520.3 billion won ($434.8 million) in net profit, compared to the 115-billion-won market consensus compiled by FnGuide.

The company's annual revenue came in at all-time high of 1.01 trillion won, jumping by 104 percent compared to the previous year. Yearly operating profit increased by 71.9 percent to 114.3 billion won.

Kakao Games is 43.6 percent owned by Kakao, 4.16 percent by Netmarble and 4.16 percent by Shenzhen's Tencent Holdings.

The growth in profit was driven by sales of its mobile games, namely Odin, and having cut the commission charge it has to pay to Odin developer Lionheart Studio by acquiring a majority stake in the company.

Kakao Games bought 30.4 percent of Lionheart Studio for 450 billion won on Nov. 1, giving it a 51.95-percent share in the developer. The company is looking to take Lionheart Studio public, but a schedule has not been set yet, Kakao Games CEO Cho Kye-hyun said at a conference call on Wednesday.

"We believe that Odin has proven its potential to survive in the long run," Cho said. "With that in mind, the company will need to go public at the best time for Odin. But for now, we are going to focus on maximizing the brand value of Odin through global expansions."

Odin will be available in Taiwan in the first half of this year, but a date has not been set yet. Kakao Games will market Odin in other countries after seeing how things unfold in Taiwan, Cho said.

Mir4, the online game developed by Wemade [WEMADE]

Chang Hyun-guk, CEO of Wemade, explains the company's goals for 2022 during a conference call on Wednesday. [SCREEN CAPTURE]

Kosdaq-listed Wemade turned to profit for the first time in six years.

Its net came in at 485.2 billion won, a "dramatic increase" according to the company and far above expectations of 118 billion won.

CEO Chang Hyun-guk credited the Mir 4 online game, the first Korean game to allow non-fungible token (NFT) trading between users, and the gains generated by the Wemix cryptocurrency issued by the company.

Wemade's revenue and operating profit were also records. Revenue was 561 billion won, 344 percent higher than the year prior, and operating profit came in at 326 billion won, following three consecutive years of losses.

The company has been the talk of the gaming world since last year, both for the success of its Mir 4 title and the alleged dumping of Wemix coins.

Mir 4 is a blockchain game where users can sell NFTs of their game characters and trade it using the Wemix cryptocurrency. The company was bashed by coin owners, who accused the company of bringing down the coin's value by offloading about 50 million coins worth around 160 million won.

During Wednesday's conference all, Chang said that Wemade will release a quarterly report on Wemix transactions, after promising to take measures regarding the coin-dumping on Jan. 13.

Mir M, the mobile version of the Mir franchise, will be released in the first half of the year in Korea without the NFT function. It will be released elsewhere in the world with the blockchain function by the end of the year.

Netmarble's Marvel Future Revolution [NETMARBLE]

Netmarble reported a 25 percent dip in net due to the pandemic that disrupted game developer working environments, according to Netmarble.

The company's annual net profit came in at 252.9 billion won, higher than the market consensus of 233.3 billion won but lower than the target set by the company, Netmarble said.

"We have not been able to achieve the growth we aimed for due to the Covid-19 pandemic," the company said in a press release. "But this year, we hope to reinforce our competitiveness in the global market with the lineup of new games and new businesses such as metaverse and blockchain."

The company will release six blockchain-based games this year, starting with A3: Still Alive globally in March and followed by others including the global version of Cross Worlds online mobile game.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]