NCSoft Reports Q3 Operating Profit of 144.4 Billion KRW, Up 50% YoY

[Asia Economy Reporter Seungjin Lee] NCSoft raised its operating profit by 50% year-on-year in the third quarter of 2022, driven by efficient marketing expenditure and steady growth in the North American and European markets.

NCSoft announced on the 11th that it recorded sales of 604.2 billion KRW, operating profit of 144.4 billion KRW, and net profit of 182.1 billion KRW in the third quarter.

Compared to the previous quarter, sales decreased by 4%, while operating profit and net profit increased by 17% and 53%, respectively. Compared to the same period last year, sales grew by 21%, operating profit by 50%, and net profit by 83%.

Sales by region were 375.4 billion KRW in Korea, 140.8 billion KRW in Asia, and 44.8 billion KRW in North America and Europe. Royalty revenue was 43.3 billion KRW. Compared to the same period last year, North America and Europe grew by 62%, and the Asia region grew by 48%. Overseas and royalty sales accounted for 38% of total sales.

Quarterly Performance Trends of NCSoft (Photo by NCSoft IR Materials)

Mobile game sales amounted to 437.3 billion KRW, down 8% from the previous quarter but up 32% year-on-year. By product, Lineage W recorded 197.1 billion KRW, Lineage M 146.5 billion KRW, Lineage 2M 85.6 billion KRW, and Blade & Soul 2 8.1 billion KRW.

PC online game sales were 25.5 billion KRW for Lineage, 23.4 billion KRW for Lineage 2, 17.5 billion KRW for Aion, 5.9 billion KRW for Blade & Soul, and 24.8 billion KRW for Guild Wars 2.

Lineage W accounted for 33% of total sales in the third quarter. The company explained that it maintained a stable sales flow due to updates and global IP partnership marketing achievements. Lineage M increased by 4% compared to the previous quarter, marking three consecutive quarters of sales growth. Guild Wars 2, celebrating its 10th anniversary, grew by 29% year-on-year. Aion increased by 23% compared to the previous quarter due to the classic server update effect.

Operating expenses decreased by 9% compared to the previous quarter. Marketing expenses were reduced by 35% quarter-on-quarter and 28% year-on-year to 38.9 billion KRW through efficiency improvements. Labor costs decreased by 8% quarter-on-quarter due to reduced welfare expenses and adjustments in the recognition scale of performance-linked long-term incentives.

NCSoft is developing the new PC and console title ‘THRONE AND LIBERTY (TL)’ aiming for release in the first half of 2023. In 2023, the company plans to introduce new titles across various genres including puzzle, collection RPG, and brawl-style action games.