[Click eStock] "NCSoft, It's Time for Expectation Rather Than Worry"

Korea Investment & Securities Report

[Asia Economy Reporter Gong Byung-sun] Korea Investment & Securities on the 24th judged this year, when a mega new release momentum is emerging for NCSoft, as an optimal investment opportunity and raised the target price from the previous 1.1 million KRW to 1.2 million KRW. The investment opinion was maintained as ‘Buy’.

This year is expected to highlight new release momentum. Domestically, 'Blade & Soul 2' developed by the headquarters and 'Trickster M' and 'Pro Baseball H3' developed by its subsidiary Ntreev Soft are scheduled to be released between March and April this year. In addition, NCSoft’s flagship title 'Lineage 2M' is about to be launched in Taiwan and Japan. Jeong Ho-yoon, a researcher at Korea Investment & Securities, said, “NCSoft’s new releases have always recorded box office results exceeding market expectations,” and predicted, “a full-scale performance improvement will begin from the second quarter.”

Entry into new platforms such as consoles is also expected to gradually become visible. NCSoft currently operates the cross-play platform Purple, which allows users to enjoy its games simultaneously on mobile and PC, and plans to add console support to Purple in the future. Furthermore, NCSoft aims to include all its games on Purple, starting with Lineage 2M. Kim Taek-jin, CEO of NCSoft, said at the Blade & Soul 2 online showcase on the 9th, “Massively multiplayer online (MMO) users will experience new actions not only on PC and mobile but also on cross-platforms such as cloud and console.”

The regulatory risk, which was a concern, is also expected to be not significant. On the 16th, a post titled ‘Request for disclosure of probabilities of probability-type items and all in-game information’ was uploaded on the Blue House’s national petition board, bringing the regulation of probability-type items into the spotlight. Lee Sang-heon, a member of the Democratic Party of Korea, proposed a full revision of the ‘Game Industry Promotion Act’ in December last year, which mandates the disclosure of types and probabilities of probability-type items that were previously voluntarily disclosed. As a result, NCSoft’s stock price was significantly adjusted. However, NCSoft already discloses most types and probabilities of probability-type items. Researcher Jeong said, “Even if this amendment passes the National Assembly, the possibility of it leading to a deterioration in performance is low.”