Wemade reports 123.8 billion won net loss in 2022 from 2021 profit

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Wemade reports 123.8 billion won net loss in 2022 from 2021 profit

Published: 15 Feb. 2023, 16:05 Updated: 15 Feb. 2023, 19:25

Wemade's headquarter in Seongnam, Gyeonggi [YONHAP]

Wemade reported a net loss of 123.8 billion won ($96.47 million) in 2022 on weakness in its gaming and crypto businesses and on the decline in the value of investments.

The market consensus was for a net loss of 146.1 billion won, according to FnGuide. It was the game publisher's first loss since 2020.

In 2021, Wemade reported a net profit of 308.1 billion won.

The company noted a decrease in the share prices of investments in 2022, explaining that the falling values fed through to its income statement.

Revenue was a record in 2022, jumping 37 percent to 458.6 billion won, but falling short of 480.9-billion-won-mark market consensus.

Increase in revenue was credited to the global launch of massively multiplayer online roleplaying games (MMORPG) Mir 4 in November and domestic release of Mir M: Vanguard and Vagabond in June.

Wemade has been one of the frontrunners in the race for the so-called play-to-win (P2E) games, where users earn real-world money from the in-game items they've gained through blockchain technologies. However, share prices crashed as the market situation became unfavorable to Wemade's potential businesses, especially those related to its Wemix cryptocurrency.

Wemix cryptocurrency was delisted by members of the Digital Asset eXchange Alliance (DAXA), a trade group representing Korea’s five largest crypto exchanges — Upbit, Bithumb, Coinone, Korbit and Gopax. In December, the Seoul Central District Court approved the delisting, saying that crypto assets have no regulator or an absolute means to determine their price.

After hitting a record share price of 245,700 won in November 2021, Wemade plummeted 88 percent to close at 30,050 won after the court decision.

The tokens are currently available for trading on GDAC in Korea, a smaller local exchange. Wemix can only be traded for Bitcoins and Ethereum, not for won.

On Wednesday, Wemix was listed on Mercado Bitcoin, Latin America's largest cryptocurrency and alternative asset investment platform and is available for trading in Brazilian Real.

Wemade’s CEO Chang Hyun-guk apologized for the delisting of Wemix tokens at a conference call on Wednesday, the first time he made a public statement about it after online press event last November.

“I am sorry for everything that happened last year,” Chang said at a conference call to report the publisher’s fourth quarter earnings. “Last year was extremely difficult, but we made it out alive.”

“We will create a transparent economical platform where anyone can easily check the exchange records,” Chang said. “It’s impossible to do something ‘discreetly’ in blockchain, but that technological transparency does not immediately transit to de facto transparency. We aim to create a platform where users can conveniently check the information through interface."

Wemade’s goal this year is “to create a blockchain game equivalent to the success of Mir 4 and Mir M and grow as a company that can enhance the economy within games both in quality and quantity,” Chang said.

The publisher plans to launch its latest blockchain games — Anipang Blast, Anipang Match, Anipang Coins and Abyss Legend — on the Wemix Play blockchain game platform by the first half of this year. Its upcoming MMORPG Night Crow is scheduled to be domestically released in April.

Wemade is also preparing to release Mir 4 and Mir M in China as the country’s content regulator is lifting regulations against foreign games, although dates have not been set yet.

Last year, the CEO said 100 games will join the Wemix ecosystem by the first quarter of 2023, meaning that at least 100 games will use Wemade’s blockchain technology and provide P2E games.

Chang noted it will be difficult to make the previously-set deadline.

“I don’t think we’d be able to achieve that number by the first quarter this year,” Chang said. “However, other platforms have made progress, and I believe the number will go up soon.”

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