3N Sets Performance Records Amid Retro Game Boom

"Special 'Stay-at-Home' Demand Due to COVID-19
Nexon Q2 Sales Grow 20%
Best Half-Year Performance Ever
NCSoft and Netmarble Also Forecast Strong Results
New Releases Coming One After Another in Second Half"

[Asia Economy Reporter Jin-gyu Lee] The top three game companies in Korea, known as the 3N (Nexon, NCSoft, Netmarble), have posted strong second-quarter results by leveraging retro games. The prolonged COVID-19 pandemic has driven a so-called "stay-at-home boom," and mobile games based on nostalgic PC games from over a decade ago have also achieved successive hits. With new releases targeting the "untact (contactless)" trend scheduled for the second half of the year, it is expected that the 3N's momentum will continue.

◆'First hitter' Nexon achieves best half-year performance = According to industry sources on the 7th, Nexon, which was the first among the 3N to disclose its earnings yesterday afternoon, achieved its best half-year performance ever thanks to the simultaneous growth of PC games and new mobile titles. Nexon's sales for the first half reached 1.6674 trillion KRW, a 7% increase compared to the same period last year. Second-quarter sales (730.1 billion KRW) also grew 20% year-on-year, marking the highest second-quarter figure in history. Operating profit (302.5 billion KRW) more than doubled during the same period.

If this trend continues, Nexon is likely to achieve its first annual sales of 3 trillion KRW this year. Nexon's strong first-half performance is interpreted as the result of a successful combination of retro strategies led by KartRider Rush+ and Baram-ui Nara: Yeon and the hit mobile new releases such as V4. KartRider Rush+ is the mobile version of the PC game Kart, released in 2004, and surpassed 15 million global cumulative users within two months after its service launch in May. Baram-ui Nara, remade for mobile after 24 years, has stirred the emotions of now middle-aged users and ranked second in Google Play revenue on the 22nd of last month. Additionally, long-running PC game MapleStory recorded 151% growth in the Korean region in the second quarter compared to the same period last year, and steady-selling PC games also performed well, driving overall results.

◆NCSoft also expected to hit record highs = NCSoft and Netmarble are also expected to announce rosy results on the 12th and 13th. The industry forecasts that NCSoft's second-quarter sales, led by the Lineage series, will increase 53% year-on-year to 628.5 billion KRW, with operating profit rising 85% to 239.5 billion KRW. In this case, NCSoft will also achieve its best half-year performance ever, following Nexon. NCSoft's LineageM, based on the Lineage IP, and Lineage2M, based on the Lineage2 IP, compete for first and second place in Google Play revenue rankings, driving NCSoft's sales. Released in September 1998, Lineage has established itself as the leading PC MMORPG in Korea for over 20 years.

Netmarble, which showed a decline in operating profit in the first quarter, is also expected to improve its performance in the second quarter thanks to the hits The Seven Deadly Sins: Grand Cross and A3: Still Alive. Netmarble's second-quarter sales are projected to increase 13% year-on-year to 594.6 billion KRW, with operating profit rising 95% to 65 billion KRW. Jin-man Lee, a researcher at SK Securities, analyzed, "The Seven Deadly Sins: Grand Cross and A3: Still Alive contributed most significantly to the performance improvement by recording sales beyond expectations, and the decline in sales of existing games was less than expected due to the benefits from COVID-19."

◆New releases lined up for the second half = Since the COVID-19 pandemic, games have established themselves as representative content products of the untact era. The 3N plan to continue their leap forward by releasing new titles one after another in the second half. Nexon is set to launch Dungeon & Fighter (DNF) Mobile in the Chinese market on the 12th, which has already recorded 60 million pre-registrations. DNF Mobile, considered the biggest anticipated title this year, is expected to surpass the popularity of the PC version with its faithful implementation of the original.

NCSoft is also working on the global release of Lineage2M and the domestic launch of Blade & Soul 2 in the second half. Netmarble is preparing for the global release of BTS Universe Story and A3: Still Alive in the third quarter. In the fourth quarter, new titles such as Seven Knights 2 and Second Country, based on Studio Ghibli animation, are in preparation.