[Reporter’s Notebook] NCSoft, Now Must Prove Itself Overseas

NCSoft announced its first-quarter earnings. Operating profit was 81.6 billion won, nearly 70% lower than a year ago. However, some securities firms and media outlets praised the results as a 'strong performance,' noting that the earnings exceeded expectations.

Examining the first-quarter results reveals NCSoft's weaknesses clearly. The significant drop in operating profit over the year was due to the poor performance of 'Lineage W,' which has been released for less than two years. On the other hand, the higher-than-expected operating profit was largely thanks to the role of the 'Linjeossi' (middle-aged men who play Lineage). Sales of 'Lineage M,' which was released seven years ago, increased. It was a story of both joy and sorrow tied to Lineage.

Kim Taek-jin, CEO of NCSoft

NCSoft has a brilliant past. Released in 1998, Lineage changed the way Koreans spend their leisure time and even influenced culture. For nearly 20 years since then, NCSoft has been the leading domestic game company, and CEO Kim Taek-jin has been the industry's elder brother. When NCSoft's baseball team, NC Dinos, won the KBO League in 2020, CEO Kim Taek-jin personally held a ceremony handing over the game's ultimate weapon, the 'Execution Sword,' to the team. However, the game that represented the 20th century, Lineage, is gradually losing its strength.

The MZ generation is rising, and the 'Linjeossi' have entered middle age and are now approaching old age. NCSoft has failed to release games that captivate the MZ generation. Game companies that entered the industry later than NCSoft have surpassed its performance. Krafton is a prime example. Krafton's operating profit in the first quarter of this year was 283 billion won, three times that of NCSoft.

Companies like Nexon and Smilegate, which once looked up to NCSoft, are now running ahead of it. Their common trait is that they generate more revenue overseas than domestically. In contrast, NCSoft is still dependent on the 'Linjeossi.' Games have now become a core part of Korea's content exports. Without overseas performance, there is no future.

Nexon's founder, Kim Jung-ju, once cited Kim Woo-joong, chairman of Daewoo, as a respected entrepreneur. He admired Kim Woo-joong's passion and boldness in advocating global management. Similarly, Kim Jung-ju led Nexon to the world from its early days. Nexon has become a globally recognized company and simultaneously emerged as the top-performing game company domestically.

Although it is quite late, CEO Kim Taek-jin expressed his willingness to change at the shareholders' meeting earlier this year, stating, "We will boldly invest in areas with potential even if they do not generate immediate profits." As the first step, NCSoft is releasing the new title 'Throne and Liberty,' targeting Western markets. The challenge of entering the console market, which NCSoft has not attempted before, is also noteworthy.