NCSoft recently unveiled a game incorporating non-fungible token (NFT) technology, a hot topic in the gaming industry.
Hong Won-jun, NCSoft's Chief Financial Officer (CFO), stated during a conference call following the Q3 earnings announcement on the 11th, "We believe that the combination of NFT, blockchain, and gaming can bring tremendous opportunities, and we are preparing for it." NCSoft has formed an internal task force (TF) to prepare for the application of blockchain technology. Hong added, "We will introduce a new service combining NFT and blockchain next year."
Will NCSoft Integrate NFT Technology into Lineage?
Recently, the gaming industry has seen the rise of 'Play to Earn (P2E)' games that integrate blockchain-based NFT technology to offer users the experience of earning money through gaming. For example, Wemade applied NFT technology to its new title Mir4, entering the global market and achieving a 167% increase in sales. NCSoft appears to have identified this business as a new growth opportunity amid ongoing criticism of loot box mechanics and sluggish performance.
There is also speculation that NCSoft's flagship intellectual property (IP), Lineage, may incorporate NFT technology. Hong CFO said, "You probably already know which game it will be applied to without me saying." He continued, "We believe that massively multiplayer online role-playing games (MMORPGs) are the most suitable genre for this application," and added, "Our mid-to-long-term strategy is to evolve the cross-play platform 'Purple' into a global gaming community combining NFT and blockchain."
NCSoft’s Sluggish Q3, Aiming Globally with Lineage W
NCSoft recorded weak performance in Q3, with operating profit halving. The company posted Q3 revenue of 500.6 billion KRW and operating profit of 96.3 billion KRW, down 14% and 56% year-over-year, respectively. The new release Blade & Soul 2, launched in August, failed to gain traction, and NCSoft’s flagship title Lineage 2M saw a 28% decline in revenue compared to the previous quarter, impacting overall results.
Breaking down by product, mobile game revenues were 150.3 billion KRW for Lineage M, 157.9 billion KRW for Lineage 2M, and 22.9 billion KRW for Blade & Soul 2 (B&S2). PC online game revenues were 29.1 billion KRW for Lineage, 25.0 billion KRW for Lineage 2, 17.9 billion KRW for Aion, 10.4 billion KRW for Blade & Soul, and 19.2 billion KRW for Guild Wars 2. By region, revenues were 337.0 billion KRW in Korea, 27.6 billion KRW in North America and Europe, 27.7 billion KRW in Japan, and 67.5 billion KRW in Taiwan.
NCSoft is seeking a turnaround with the new release Lineage W, launched on the 4th. Global expansion of Blade & Soul 2 is also underway. Hong CFO said, "Lineage W’s revenue and user metrics are the highest among all games we have announced to date." NCSoft explained that Lineage W is generating an average daily revenue of 12 billion KRW and expects cumulative revenue to surpass 100 billion KRW by the ninth day.
The company is also actively pursuing global market expansion. Hong emphasized, "All upcoming games, including TL, will have global simultaneous releases as the most important theme." NCSoft launched Lineage W in 12 countries including Korea, Taiwan, and Japan on the 4th, and plans to expand release countries to North America and Europe next year. Lineage 2M will begin service in 29 global countries including North America, Europe, and Russia on the 2nd of next month.
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