Game publishers cancel titles, cut employees as economy struggles

Com2uS's headquarters in Geumcheon District in southern Seoul [COM2US]

Tech winter is extending to local game publishers, small and big alike, as the market retracts in the aftermath of Covid-19 pandemic due to a surge of outdoor activities and economic slowdown.

Com2uS recently started pushing for voluntary resignation to slim down its developer workforce, the company confirmed on Thursday. The planned layoffs will likely impact a two-digit number of people.

“We came to this difficult conclusion as we decided to optimize some of our projects considering recent market and management conditions,” a Com2uS spokesperson said.

The company accepted another round of voluntary resignations from its employees at the beginning of last year. Com2Verse, the company’s metaverse subsidiary, went through a layoff last September only after two months since it released in its own metaverse platform in July.

The company has been through a few rounds of downsizing recently following lackluster earnings performance. Com2uS has recorded operating losses in four consecutive quarters since the October-December period of 2022. The company is forecast to post another operating loss of 3.9 billion won ($2.9 million) for the fourth quarter of 2023, according to market tracker FnGuide.

Com2uS CEO Lee Joo-hwan stated in his New Year’s address that the company “is not bearing the fruit that we’ve anticipated due to unfavorable market conditions and increased costs” and said that it will focus on reevaluating the media business and strengthening its game publishing operations by discovering new potential games.

Among the “Big 3Ns” — Nexon, NCSoft and Netmarble — are downsizing their workforces or game services to streamline their revenue.

NCSoft formed a committee of top executives last October with the goal of revamping its organizational management. The company also disbanded a financial AI unit in December. Earlier this month, it axed subsidiary Ntreev Soft and laid all 70 of its employees. The services of mobile games Tricster M, Pro-baseball H2 and H3, serviced by the company, will be terminated as well.

Netmarble, following seven straight quarters of operating loss, discontinued five titles, including action role-playing game Monster Taming and mobile games Koongya Draw Party, Knights Chronicle, StoneAge World and Marvel Future Revolution.

Nexon, one of the few gaming companies to enjoy robust growth last year, canceled its third-person shooter Veiled Experts in December only after seven months after its release.

Smilegate terminated services for its flagship game, Lost Ark, in Japan last March.

Devsisters, known for its Cookie Run franchise, recently laid off some of the developers behind its Brixity.

“Brixity was recognized for its game quality from the global market with innovative new intellectual property, but the company decided to go through organizational reform, because it did not lead to the revenue profits that we’d hoped it would create.”

As various game companies tighten their belts, outlooks for fourth-quarter earnings reports are looking grim. Nexon, Netmarble, Com2uS, NHN, Kakao Games and Neowiz are all projected to post operating losses, according to FnGuide. Other firms, such as NCSoft, Wemade, Krafton and Pearl Abyss are expected to report widening losses or a decline in operating profits.

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