Delayed New Release, NC's Rebound Expectations Vanish Like Smoke

'Throne and Liberty (TL)' Launch Delayed to Next Year
10 Securities Firms Lower Target Prices
Expectations for New Release Continue Despite Delay
"Momentum to Form as Timing Becomes Clear"

[Asia Economy Reporter Lee Myunghwan] Both earnings and stock price forecasts for NCSoft in the securities industry are declining simultaneously. This follows NCSoft's announcement that it will postpone the release schedule of its highly anticipated MMORPG blockbuster, "Throne and Liberty (TL)," to the first half of next year.

On the 16th, securities firms analyzed that the decision to delay the new game's release would lead to a decline in earnings. NCSoft held an investor conference on the 12th to announce its Q2 earnings for this year. While revenue met market estimates, operating profit fell nearly 10% short of expectations. At the conference, NCSoft announced that the release plan for the new title TL would be postponed to the first half of next year.

In response to the news of the delay of the highly anticipated new game, securities firms unanimously forecast a negative impact on earnings. This is because a decrease in sales during the delayed release period is inevitable. In fact, after the news of TL's release delay became known, 10 securities firms lowered their target stock prices for NCSoft. Lee Changyoung, a researcher at Yuanta Securities, explained, "The delay in TL's release is presumed to be related to the overseas publishing contract with Amazon Games for better global success," adding, "Given the natural decline in revenue from existing games and the successive delays in new game releases, a downward revision of 2022 earnings is inevitable." Jung Eehun, a researcher at Eugene Investment & Securities, also noted, "Considering that the delayed release is scheduled for the first half of the year, the earliest point when significant revenue will be generated is expected to be Q2 of next year," and added, "With the release of all three games, including TL, being postponed, a downward revision of earnings estimates for the second half of this year is unavoidable."

However, despite the delay, there are also evaluations that expectations for the new game remain high. An Jaemin, a researcher at NH Investment & Securities, said, "Although the release has been delayed, expectations for TL still remain," and explained, "The delay was not due to the game's development stage but was postponed during recent discussions with external partners regarding publishing in North America and Europe. After verifying the game quality through internal testing in August, game-related information is planned to be disclosed at an event within this year." Kim Dongwoo, a researcher at Kyobo Securities, also expressed optimism, stating, "Momentum will be reestablished depending on the publishing partner, game quality, business model, and the concretization of the release schedule."