Game companies have a gangbusters second quarter

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Game companies have a gangbusters second quarter

Ana, the virtual human avatar developed by Krafton [KRAFTON]

Ana, the virtual human avatar developed by Krafton [KRAFTON]

Korean game companies reported strong second quarter earnings thanks to the popularity of mobile games.
Krafton, Korea’s largest game company by market cap, reported a consensus-beating 194 billion won ($149.1 million) in net in the April-to-June period, up 37 percent on year. Revenue came in at 423.7 billion won, down 7.8 percent compared to the year before.
Mobile games made up 75 percent of revenue, including PlayerUnknown's Battlegrounds (PUBG) Mobile, PUBG Mobile India and PUBG: New State, although no new games were released. PUBG is an online first-person shooting (FPS) game franchise where 100 players kill each other on an island to become the last standing.
PUBG Mobile and PUBG: New State kept strong sales thanks to collaborations, such as with K-pop girl group Blackpink, and frequent updates to game content.
However, the company’s third-quarter earnings may take a blow as PUBG India has been blocked from the Indian mobile app market since July 28. Local authorities cited security concerns, but media reports pointed to Krafton’s investment from China’s Tencent as the cause, amid political tensions building between India and China over a border conflict.
“We understand and respect the concerns of the Indian government,” chief financial officer Bae Dong-geun said during a conference call Thursday. “We are sincerely working with local authorities so that Indian users may enjoy PUGB Mobile India again, after strict monitoring of our data security standards.”
Lineage W from NCSoft [NCSOFT]

Lineage W from NCSoft [NCSOFT]

NCSoft reported a 26-percent rise in net in the second quarter. Net profit came in at 118.7 billion won, inching above the 115.7-billion-won consensus compiled by FnGuide. Revenue was 629.3 billion won, up 17 percent on year but slightly under the 638.4-billion-won consensus.
Despite the absence of a new game this year, NCSoft performed well thanks to the continued success of Lineage W, its mobile massively-multiplayer online roleplaying game (MMORPG) released last November.
Mobile games' revenues were 35 percent higher than the previous year. Lineage W grossed 223.6 billion won, Lineage M 141.2 billion and Lineage 2M 96.2 billion won.
“Total revenues for Lineage W have surpassed 1 trillion won,” said Lee Jang-wook, head of the investor relations team at NCSoft, during a conference call Friday. “It is seeing fewer users, as is customary for all games, but related figures seem to stay strong and we hope to see continued success into the latter half of the year.”
Nexon's new Dungeon&Fighter Mobile, launched March 24 [NEXON]

Nexon's new Dungeon&Fighter Mobile, launched March 24 [NEXON]

Tokyo-listed Nexon also had a good second quarter, with a 65-billion-yen ($487.7 million) net profit that jumped 176 percent compared to the same period last year. Revenue rose 50 percent on year, coming in at 175.1 billion yen.
Nexon launched Dungeon&Fighter Mobile in Korea on March 24 and saw 1.2 million pre-downloads on Google and Apple’s app stores before its release, the highest for a mobile game released by Nexon.
It was initially planned for a Chinese release on Aug. 12, but that was postponed for a system upgrade to “meet the Chinese government’s guidelines,” according to Nexon. A release date has not been set yet.
The company will release HIT2, a massively-multiplayer online roleplaying game (MMORPG), on Aug. 25.
“We expect revenue in Korea to significantly increase year-over-year,” the company wrote in a report on Aug. 9 on its outlook for the third quarter. “We anticipate significant contributions from Dungeon&Fighter Mobile and HIT2, which is scheduled to launch on Aug. 25.”
Pearl Abyss reported a 1,042.9 percent on-year surge in net profit, coming in a 32 billion won in the second quarter. Revenue rose 6 percent to 94 billion won.
The company started publishing its MMORPG Black Desert in some countries without a local publisher since 2017, but took full charge of the global publishing during the second quarter. That led to a 300-percent in June compared to May, according to the company.
Com2uS reported 14.9 billion won in net profit, 42.4 percent higher than the second quarter last year. The company’s mobile game Summoners War: Sky Arena hit new daily record revenue in April, proving its continued success eight years into its release, according to the company.
Seven Knights Revolution, the latest mobile game released by Netmarble [NETMARBLE]

Seven Knights Revolution, the latest mobile game released by Netmarble [NETMARBLE]

Meanwhile, Netmarble continued its losing streak for the second quarter this year. The publisher lost 120.5 billion won from April to June, coming in far below the 64.5-billion-won market consensus. In the second quarter last year, Netmarble reported a net profit of 48.2 billion.
Revenue was 660.6 billion won, up 14.4 percent on year but lower than the 668.9 billion won analysts expected.
The loss was mainly due to marketing expenses for new games that were not recovered due to a disappointing reception by players. Netmarble released A3: Still Alive, Cross Worlds and Golden Bros this year.
“The release of much-anticipated games were postponed and games that were released underperformed, leading to two consecutive quarters of low results,” said CEO Kwon Young-sik in a press release. “We expect a gradual improvement of our earnings as Seven Knights Revolution was well received in the local market and the development of other games are smoothly under way.”

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