NCSoft unloads entire KLAP stake as profits fall

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NCSoft unloads entire KLAP stake as profits fall

Published: 09 Aug. 2023, 16:09 Updated: 09 Aug. 2023, 16:24

NCSoft's headquarters building in Pangyo, Gyeonggi [NCSOFT]

Game publisher NCSoft unloaded the majority of its shares in entertainment company KLAP, citing stagnating profitability.

“NCSoft sold off its 66.69 percent stake in KLAP to existing shareholders back in May 2023 to focus on our primary game business,” an NCSoft spokesperson said on Wednesday. The specific price for the stake was not disclosed by the company.

KLAP CEO Lee Chan-kue, who is also the head of the financial management division at NCSoft, is reported to have resigned in May as well.

NCSoft established entertainment subsidiary KLAP in July 2020 by injecting 800 million won ($608,532) to diversify its revenue streams to the entertainment industry. KLAP was behind the content production of the fan community platform Universe, which NCSoft sold off to SM Entertainment’s subsidiary Dear U in January. Reports suggested that NCSoft found it difficult to distinguish its fan platform business from competitors such as HYBE’s Weverse or Dear U’s Dear U Bubble as a game company without its own artists.

KLAP swung to the red on year to post 400 million won in operating loss in 2022, while revenue sunk 6.96 percent to 10.7 billion won.

KLAP changed its name to KLAP Entertainment and is independently running its entertainment business. Lee Sun, former head of the music business division at CJ ENM, was appointed as the new CEO.

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