Q2 Operating Profit Reaches 81 Billion KRW
Sales Up 162% Year-on-Year
Game 'Odin' and Screen Golf Growing Rapidly
Expecting Performance Report for 'Uma Musume'
[Asia Economy Reporter Seungjin Lee] Kakao Games has achieved its highest quarterly operating profit since its founding. This is due to the successful global expansion of its proprietary intellectual property (IP), the massively multiplayer online role-playing game (MMORPG) "Odin: Valhalla Rising," along with steady performance in the domestic market.
Operating Profit Up 900%
On the 3rd, Kakao Games announced that it recorded sales of 338.8 billion KRW and an operating profit of 81 billion KRW in the second quarter. Sales increased by 162% compared to the same period last year, and operating profit rose by 900% year-on-year, marking the highest level since the company's establishment. Net profit for the period was 64 billion KRW, an increase of 16,418% compared to the same period last year.
Looking at the performance by segment, mobile games recorded sales of 213.1 billion KRW, up 153% year-on-year. This was influenced by the stable maintenance of Odin's sales and user metrics domestically, and its continued success overseas, achieving 50 billion KRW in sales within a month after launching in Taiwan in March. PC online games, which had no new releases in the first half, recorded sales of 15 billion KRW, down 20% year-on-year.
The screen golf business also grew rapidly. Other revenues, including those from Kakao VX, which operates the screen golf business, achieved sales of 110.8 billion KRW, up 319% year-on-year. This marks the highest performance ever, following the previous quarter. The increase is attributed to the rising awareness of Kakao VX and the peak golf season.
‘Odin’ Proves Global Competence
The IP that led to the highest quarterly operating profit in Q2 was Odin. Released in June last year, Odin has consistently ranked within the top 5 in the domestic market, and in March, it expanded into the Greater China region, including Taiwan and Hong Kong, securing a top position and marking a successful start in the global market.
In South Korea, Odin surpassed cumulative sales of 500 billion KRW within about 180 days of service launch. It currently maintains 4th to 5th place in sales rankings on the two major domestic application (app) markets. In the Taiwanese market, it achieved 50 billion KRW in sales within a month of release, proving its competitiveness in the global market.
Kakao Games plans to focus its capabilities on the next global expansion, including Japan, following the positive results of Odin’s first global market entry. Based on the know-how accumulated over the past year, the company aims not only to operate stable domestic services but also to fully prepare for localization in Japan and other future global launch regions.
Q3 Performance Expected from ‘Umamusume’
Kakao Games’ performance from "Umamusume Pretty Derby," which was released in June and continues to perform well, will be reflected in the third quarter. In particular, marketing expenses incurred ahead of the game’s release were recorded in Q2, so a higher operating profit margin is expected in Q3.
Released on June 20, Umamusume ranked first in sales on the two major domestic markets immediately after launch, marking an early success. After the update of the support card "Kitasan Black," considered essential content, on the 25th of last month, sales exceeded 15 billion KRW in just one day, pushing the sales ranking back to first place from the 5th position.
Kakao Games plans to sequentially introduce various genres of content to users in the second half of the year, not only mobile and PC online games but also blockchain games in the global market. Titles such as the collectible RPG "Eversoul," XL Games’ new release "Distera," the large-scale MMORPG "Ares: Live of Guardians," as well as blockchain games like Metabora’s "Buddy Shot," XL Games’ "Aki World," and Rising Wings’ "Compete" will be unveiled.
Joyeon Cho, CEO of Kakao Games, stated, "In the first half of the year, we focused on establishing good works such as MMORPGs and subculture genres in the market by leveraging our service experience and know-how. From the second half, we will do our best to introduce differentiated content unique to Kakao Games, targeting not only the domestic but also the global market."
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