Slowed Growth Momentum, Increased Labor Cost Burden
Major Game Company CEOs Return Bonuses
New Releases Poured Out for Rebound... Sorting the Wheat from the Chaff
Last year, the salaries of leaders in the domestic gaming industry were disclosed. Some voluntarily cut their salaries amid declining performance. The gaming industry, tightening its belt, is putting everything on the line with new releases this year.
Return of Bonuses... Entering Austerity Management
This year, the gaming industry declared austerity management. The burden of labor costs increased significantly due to years of substantial wage hikes amid a shortage of developers. The absence of new releases and declining performance were also factors. In response, CEOs took the lead in reducing labor costs.
Changhan Kim, CEO of Krafton, voluntarily cut his bonus last year. Kim received a total of 1.035 billion KRW last year, about half of his previous year's salary of 2.065 billion KRW. Krafton's operating profit increased by 16% compared to the previous year. However, the new release, "The Callisto Protocol," underperformed expectations, and with no major new releases this year, the company tightened its belt.
Gyeyun Cho, CEO of Kakao Games, received 1.825 billion KRW last year, down 20% from the previous year. This was due to bonuses being cut to half of the previous year. Kakao Games recorded its highest annual sales last year, but performance sharply declined in the fourth quarter. The average annual salary per employee at Kakao Games last year was 138 million KRW, the highest among major game companies.
Junhyuk Bang, Chairman of Netmarble, did not receive a bonus for the second consecutive year to take responsibility for poor performance. Netmarble returned to a deficit last year, facing the biggest crisis since its founding. However, his total compensation increased by about 5% compared to the previous year. Last year, Chairman Bang's salary was 1.472 billion KRW.
On the other hand, some CEOs received large bonuses. Taekjin Kim, CEO of NCSoft, received 12.4 billion KRW last year, more than the combined salaries of CEOs of major game companies. This was a 16.7% increase from the previous year's total compensation. Of this, bonuses accounted for 10.031 billion KRW, most of the amount, which was about 1.7 billion KRW more than the previous year. As Chief Creative Officer (CCO), Kim also participated in game development and was recognized for leading the success of Lineage 2M and Lineage W. Last year, NCSoft recorded sales of 2.5718 trillion KRW and operating profit of 559 billion KRW, increases of 11% and 49% respectively from the previous year, with sales reaching an all-time high.
A Flood of New Releases... Sorting the Wheat from the Chaff in Game Companies
Game companies with declining growth momentum are betting on new releases. The strategy is to rebound through major new titles, but competition is expected to be fierce as release timings overlap. In particular, many of the new releases are in the massively multiplayer online role-playing game (MMORPG) genre, which will highlight differences in each company's development capabilities and management strategies.
First, Kakao Games opened the floodgates with new releases. Starting with "Eversoul" in January, they released "ArcheAge War" on the 21st. ArcheAge War will face off against Nexon's "Prasia Jeon-gi," releasing on the 30th, and Wemade's "Night Crow," set to be unveiled in April.
Netmarble will release nine new titles this year. In the first half alone, they will launch "Modoo Marble 2: Meta World," "Grand Cross W," and "Tower of God: New World," among others. NCSoft will release "Throne and Liberty (TL)" in the first half of the year.
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