[Click e-Stock] "NCSoft's New Title 'TL' Will Surpass Lineage"

Yuanta Securities Report

[Asia Economy Reporter Minji Lee] Yuanta Securities maintained a buy rating and a target price of 850,000 KRW for NCSoft on the 21st, expecting strong performance from its new release. The upside potential compared to the current price (467,000 KRW) reaches 82%.

First, the estimated daily sales of ‘Lineage W’ in the first quarter of this year are expected to be 4.3 billion KRW, a 30% decrease from 6.2 billion KRW in the fourth quarter of last year. The annual sales for this year are projected to be 4 billion KRW. When ‘Lineage W’ linked with NFTs performs better than expected in North America and Europe in the third quarter, daily sales are predicted to increase further.

The new title ‘TL (Throne & Liberty)’ is evaluated to have moved away from the simple repetitive style of existing Korean MMORPGs, incorporating many strategic elements characteristic of Western games where the field, environment, and players mutually influence each other.

Changyoung Lee, a researcher at Yuanta Securities, said, “By communicating with users and adjusting development content and release timing, the game is being developed in a user-friendly manner before launch, which will increase the likelihood of success compared to the past.”

Given its high game development capabilities, it is also expected to gain an advantage in the Play-to-Earn (P2E) market. Recently, P2E games have lost investor interest as scarcity has decreased. Although demand is increasing due to user expansion, it is difficult to actually earn money because of the sharp decline in cryptocurrencies. Additionally, with the rapid increase in related games, the market has become fully competitive, making the success probability of P2E games similar to that of traditional games.

Researcher Changyoung Lee forecasted, “Instead, P2E games linked with NFTs are more likely to grow steadily in the future. As the number of P2E games increases, ultimately games with superior fun and gameplay will have a higher chance of success, which could raise the stock valuation of companies with proven game development capabilities like NCSoft.”