Wemade's New Release Fails to Hit, 2Q Sales Down 26% (Comprehensive)

Operating Loss of 3.3 Billion KRW... Turning to Deficit
'Mir4' Launch in Second Half... Efforts to Improve Performance

[Asia Economy Reporter Jin-gyu Lee] Wemade posted sluggish earnings despite consecutive wins in intellectual property (IP) lawsuits related to "Legend of Mir 2 (Mir2)" against Chinese game companies in the second quarter.

Wemade announced on the 12th that it recorded sales of 25.1 billion KRW and an operating loss of 3.3 billion KRW in the second quarter. This represents a 26% decrease in sales compared to the same period last year and a return to operating losses.

Although Wemade won the Mir2 IP-related lawsuits against Chinese game companies in the second quarter, the compensation has not yet been received in earnest, so it did not lead to an increase in sales. Previously, Wemade won an arbitration lawsuit held in Singapore against Chinese game companies Shanda Games and Lianjia Information Technology in June. The Singapore arbitration tribunal ruled that "the license agreement expired on September 28, 2017, and the license agreement has been invalid since then," and "Shanda Games and others must compensate Wemade for damages." The amount of damages will be determined through a separate procedure. Wemade also won an arbitration ruling in May against the Chinese game company Jiuling at the Korean Commercial Arbitration Board for breach of license agreement.

Wemade plans to focus its efforts on improving performance by concentrating on the final development of the mobile blockbuster MMORPG "Mir4," scheduled for release in the second half of the year. After the release of Mir4, titles such as "MirW" and "MirM" will be sequentially launched. The company also intends to continue achieving meaningful results in copyright disputes related to the Mir IP. Jang Hyun-guk, CEO of Wemade, said, "We plan to use all legal means, including claims for damages, to protect and strengthen our IP rights."