NC Earnings Shock... Q1 Operating Profit 56.7 Billion Won... 76.5%↓ (Update)

[Asia Economy Reporter Buaeri] NCSoft, which had been maintaining soaring sales, posted results below market expectations for the first quarter of this year. The impact of paying incentives to all employees due to talent competition in the gaming industry was significant.

On the 10th, NCSoft announced that its first-quarter sales reached 512.5 billion KRW, and operating profit was 56.7 billion KRW. These figures represent decreases of 29.9% and 76.5% respectively compared to the previous year. Both sales and operating profit declined year-on-year.

An NCSoft official stated, "Operating profit decreased due to increased operating expenses such as labor costs and marketing expenses." Labor costs rose 26% from the previous quarter to 232.5 billion KRW due to increased workforce, regular incentives, and one-time special performance rewards. Due to the competition to attract developers in the gaming industry, NCSoft paid 8 million KRW each to all employees as the 'CEO Kim Taek-jin Special Incentive.'

Marketing expenses increased 23% from the previous quarter to 55 billion KRW due to overseas regional launches and increased marketing activities for new domestic games.

Sales by region were 416.9 billion KRW in Korea, 24.1 billion KRW in North America and Europe, 13.8 billion KRW in Japan, and 12.2 billion KRW in Taiwan. Royalty sales recorded 45.5 billion KRW.

Looking at sales by product, mobile game sales reached 324.9 billion KRW. Lineage M recorded 172.6 billion KRW, and Lineage 2M recorded 152.2 billion KRW. The mobile 'Lineage siblings,' NCSoft's main source of income, also saw sales decrease by 18.5% and 55.3% respectively compared to the previous year. NCSoft recently faced a boycott from users following controversies over probability-based items.

PC online game sales amounted to 129 billion KRW. Lineage recorded 48.9 billion KRW, Lineage 2 26.2 billion KRW, Aion 23.4 billion KRW, Blade & Soul 14.1 billion KRW, and Guild Wars 2 16.3 billion KRW.