Operating loss turned to 104.4 billion KRW last year
Delays in new releases and lack of hits... Increased burden of labor and marketing costs
[Asia Economy Reporter Yuri Choi] Netmarble recorded an operating loss last year despite increasing sales. This is the first annual operating deficit in 10 years since 2012. The operating expenses increased amid the failure to release new hit titles.
On the 9th, Netmarble announced that its annual sales for 2022 reached 2.6734 trillion KRW, a 6.6% increase compared to the previous year. However, operating loss turned to 104.4 billion KRW. The net loss for the period was 906.3 billion KRW.
Looking at the fourth quarter of last year alone, sales amounted to 686.9 billion KRW, down 8.7% year-on-year, and operating loss was 19.8 billion KRW, turning negative. The company recorded operating losses for four consecutive quarters last year.
The poor performance of games released last year combined with increased cost burdens. In January last year, Netmarble revealed 20 major games in development at the media event Netmarble Together with Press (NTP), but some anticipated titles such as "Modoo Marble: Meta World" were delayed. New releases like "Seven Knights Revolution" underperformed compared to expectations.
On the other hand, increased selling and administrative expenses worsened profitability. Last year, labor costs were 779.4 billion KRW and marketing expenses were 524.3 billion KRW, up 22.0% and 31.1% respectively from the previous year. Additionally, impairment losses from intangible asset valuation following the acquisition of the social casino game company SpinX were added.
Overseas sales last year reached 2.2483 trillion KRW. The proportion of overseas sales increased by 11 percentage points from the previous year to 84%. The share of North American sales grew due to events related to "Marvel Contest of Champions." The sales distribution by region was North America 51%, Korea 15%, Europe 12%, Southeast Asia 8%, Japan 7%, and others 7%.
Netmarble plans to release multiple new titles this year to turn the tide. The third-person shooting multiplayer online battle arena (TPS MOBA) game "Paragon: The Overprime" and the action battle game "Hype Squad" are scheduled for official release within the year. "Modoo Marble 2: Meta World," "Grand Cross W," and "Tower of God: New World" are planned for release in the first half of the year, while "Arthdal Chronicles," "Solo Leveling: Arise," "Knights of the Round Table," and "Seven Knights Finger (tentative)" are under development aiming for release in the second half.
Four games recently granted Chinese licenses will be launched in China within the year. "The Second Country: Crossworld" will be serviced through Tencent, and the other three titles including "Shop Titans" are planned for release in the 2nd to 4th quarters with local publishers.
Netmarble CEO Kwon Young-sik said, "Last year, we recorded unsatisfactory results due to delays in new releases and poor performance of launched titles. In this crisis, we will thoroughly manage personnel and costs and focus the company's capabilities on selected projects to ensure that anticipated new titles succeed in the market."
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