NCSoft has winning 2022, other local game companies not so lucky

Games & Webtoons

Published: 14 Feb. 2023, 17:17 Updated: 14 Feb. 2023, 18:22

NCSoft has winning 2022, other local game companies not so lucky

An image of Lineage W, its mobile massively-multiplayer online roleplaying game (MMORPG) released in November 2021. [NCSOFT]

NCSoft had a winning year in 2022 with its Lineage mobile games while other Korean game companies suffered a decrease in net or an overall loss due to the absence of new hits to overthrow the champion.

NCSoft, the developer and publisher of the Lineage massively multiplayer online mobile game (MMORPG) franchise, reported a 14 percent increase in annual net profit to hit 452.3 billion won ($356.5 million) in 2022, though falling short of the market consensus of 552.2 billion won compiled by FnGuide.

Revenue increased 11.4 percent to mark a record-breaking 2.57 trillion won, landing around the analysts’ expectations of 2.58 trillion won. Its mobile games accounted for 1.93 trillion won of the total revenue, which was its record-breaking best as the figure jumped 20 percent compared to 2021.

Sales in Korea accounted for 63 percent of the total revenue. Overseas revenue grew 44 percent for regions in North America and Europe and 40 percent for the rest of Asia.

The accumulated revenue of MMORPG Lineage W, which was released in November 2021, recorded 1.32 trillion won.

NCSoft plans to release games across various genres based on new intellectual properties (IP) this year to diversify its portfolio.

Its new PC and console MMORPG, Throne and Liberty (TL) will launch globally in the first half of this year after domestic testing on Feb. 21.

“After TL, action Battle Royale Project R, puzzle game Puzzup and collectable roleplaying game BSS, Project G [the genre of which has not been revealed] will be released this year,” said Chief Financial Officer Hong Won-jun in a conference call last Thursday morning.

An image of Krafton's upcoming PC and console game Callisto Protocol set to be released on Dec. 2 [KRAFTON]

Krafton’s net profit shrunk 3.8 percent to 500.2 billion won, far below the market expectation of 753.9 billion won. Revenue decreased 1.7 percent to 1.85 trillion won, close to the market consensus of 1.84 trillion won.

The company cited an influx of 45 million new users in PlayerUnknown’s Battlegrounds (PUBG) after it was made free to play last January and PC console game The Callisto Protocol, which launched in December, to be the primary factors that kept up its revenue.

Netmarble swung to the red in 2022, reporting net loss of 906.4 billion won. The figure was far short of the market expectation of 428.6 billion won.

Revenue increased 6.6 percent on year to 2.67 trillion won, reaching close to the market consensus of 2.68 trillion won. The publisher also reported operating loss of 104.4 billion won, the first time it transited to a deficit in a decade.

The company cited a delay of new game titles and failure of success with existing games for the loss.

For existing games, Netmarble cited the lesser-than-expected popularity of MMORPG mobile Seven Knights: Revolution, released in July, and also a lack of profit from SpinX last year. SpinX, based in Hong Kong, is the world’s third-largest mobile social casino game company.

Netmarble plans to release a total of nine new game titles in the hopes of a turnaround, such as RPGs Grand Cross W, Modoo Marble 2: Metaworld, Tower of God: New World, Solo Leveling: Arise and MMORPG Arthdal Chronicles. The company expects to showcase three of its new game titles — Ni no Kuni: Cross Worlds, A3: Still Alive and Shop Titans — which earned approval from the Chinese market to operate locally, by this year and expects to reap profit from the large market scale.

“It’s difficult to expect improvement for first quarter earnings because there are no scheduled new releases,” said CEO Do Ki-wook during a conference call last week. “The turnaround period is expected to be in the second quarter, where new game titles are lined up for release. We anticipate the revenue made from new titles from the second quarter to be reflected in the latter half of this year.”

Kakao Games swung to the red with a net loss of 164.2 billion won in 2022, falling far below analysts’ expectations of 62.9-billion-won net profit.

Revenue increased 13.35 percent to 1.15 trillion won, below the market consensus of 1.18 trillion won.

The publisher cited game titles such as MMORPG Odin: Valhalla Rising — released domestically in June 2021 and last March in Taiwan — still ranking high in each domestic app market, as well as mobile game Uma Musume: Pretty Derby, released in June, as contributing to the stabilization of revenue from the fourth quarter.

The company said an increase in human resources, such as new recruitment in game development, accounted for losses.

An image of Pearl Abyss's upcoming RPG Crimson Desert [PEARL ABYSS]

Pearl Abyss transited to a net loss of 41.1 billion won, falling short of the market consensus of 62.8-billion-won net profit.

Consensus-beating revenue reported a 4.4 percent decrease to 385.9 billion won.

Consistent updates and marketing of its MMORPGs Black Desert and Eve Online contributed to the stabilization of its services. Overseas sales accounted for 81 percent of the annual revenue.

The publisher reported that it will focus on development and the marketing of its upcoming RPG Crimson Desert. The specific date of its release has not been announced yet, but the company aims to finish development sometime in the latter half of this year.

Meanwhile, Tokyo-listed publisher Nexon reported a 13 percent decrease of net profit to 100.3 billion yen (962.9 billion won) compared to the previous year, falling short of market consensus which ranged between 113.2 billion and 118 billion yen.

Revenue jumped 29 percent to report a record-breaking 3.5 trillion yen.

It’s the first time in two years for Nexon to surpass the 3-trillion-won mark in revenue.

Sales made in mobile games increased 41 percent compared to 2021 thanks to its recently-released Dungeon&Fighter Mobile and HIT2 MMORPG. They were released in March and August last year.

Existing games, including FIFA Online 4 and MapleStory, also contributed to the sales.

With the success of its games, Nexon has a hefty lineup planned for this year as well, such as the launch of the global regular season for online racing game KartRider: Drift next month, MMORPG Wars of Prasia, Mabinogi Mobile, RPG The First Descendant and online third-person shooter (TPS) game Warhaven.

“Nexon has never been stronger, or its future brighter,” said Owen Mahoney, president and CEO of the company in a press release last Thursday. “Despite global headwinds that have severely impacted our sector, Nexon’s revenue grew 49 percent year-over-year in the fourth quarter and we expect to grow some 28 percent to 38 percent in the current [first] quarter [on year].”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]