Nexon Posts Record First Half Revenue of 2 Trillion KRW
NCSoft's Revenue Drops 30% Year-on-Year
Netmarble Continues 6 Consecutive Quarters of Losses
Nexon has solidified its position as the top player in the domestic gaming industry. Most major game companies, including NCSoft and Netmarble, failed to avoid sluggish performance in the first half of the year. In contrast, Nexon surpassed 2 trillion KRW in sales in just the first half, setting a record high.
Nexon Surpasses 2 Trillion KRW in First Half Sales
On the 9th, Nexon announced that its sales for the second quarter of this year reached 902.8 billion KRW (94.4 billion JPY, based on a quarterly exchange rate of 956.0 KRW per 100 JPY), with an operating profit of 264 billion KRW (27.6 billion JPY). These figures represent increases of 12% and 22%, respectively, compared to the same period last year.
For the first half of the year, sales totaled 2.0891 trillion KRW (218.5 billion JPY), and operating profit was 802 billion KRW (83.8 billion JPY), marking increases of 12% and 22% year-over-year. This is the highest performance ever recorded for the first half. If this trend continues, annual sales could approach 4 trillion KRW this year, a unique achievement in the domestic gaming industry.
Nexon recorded strong sales across all genres, from PC to mobile and console. In particular, the PC segment saw 'FIFA Online 4' achieve its highest quarterly performance for six consecutive quarters. On mobile, the subculture game 'Blue Archive,' popular in Japan, and 'Prasia Jeon-gi,' whose sales were fully reflected from the second quarter, contributed to the results.
NCSoft, Netmarble, and Others See Declining Performance
When naming the leading domestic game companies, the term ‘3N’?referring to Nexon, NCSoft, and Netmarble?was always included. However, with Nexon pulling far ahead, the term ‘3N’ has lost its meaning.
NCSoft reported second-quarter sales of 440.2 billion KRW and an operating profit of 35.3 billion KRW, decreases of 30% and 71%, respectively, compared to the same period last year. The decline in NCSoft’s performance was largely due to reduced sales from the ‘Lineage’ series. Most of NCSoft’s revenue comes from the MMORPG (Massively Multiplayer Online Role-Playing Game) genre, particularly the Lineage series. However, the release of many competing titles in the same genre this year led to a significant drop in sales.
Netmarble continued its streak of losses for six consecutive quarters. In the second quarter, it posted sales of 603.3 billion KRW and an operating loss of 37.2 billion KRW. The operating loss increased from the first quarter due to marketing expenses related to new game launches and temporary rises in labor costs.
Major game companies such as Krafton and Kakao Games also reported weak second-quarter results. Krafton’s second-quarter sales were 387.1 billion KRW, with an operating profit of 131.5 billion KRW, down 8.6% and 20.7% year-over-year, respectively. The absence of new releases had a significant impact.
Kakao Games recorded second-quarter sales of 271.1 billion KRW and an operating profit of 26.5 billion KRW, decreases of 20% and 67% compared to the same period last year. The poor performance was largely due to declining sales of existing mobile games, including ‘Odin: Valhalla Rising,’ which marked its second anniversary since launch.
Seeking a Turnaround with New Releases in the Second Half
Game companies facing poor results are looking to new releases in the second half to stage a turnaround. Some companies may take some time to see a rebound in performance due to delayed new launches.
Netmarble, which plans to release seven new titles in the second half, is confident about a performance rebound. Following ‘Grand Cross: Age of Titan,’ ‘Seven Knights Growth,’ and ‘King Arthur: Legend Rise,’ it will launch a total of seven global new titles, including ‘Asdal Chronicles (working title),’ ‘Solo Leveling: ARISE,’ ‘Paragon: The Overprime,’ and ‘Modoo Marble 2.’ It also plans to release three popular titles?‘The Seven Deadly Sins,’ ‘The Second Country: Crossworld,’ and ‘A3: Still Alive’?in the Chinese market. These games are expected to easily reach 5 million pre-registrations.
Kakao Games plans to launch the mobile action RPG ‘Goddess Order’ in the global market excluding China in the fourth quarter. It will also continue to expand existing games globally. The collection RPG ‘Eversoul’ is set for the Japanese market, and Odin is preparing for service in North America and Europe.
NCSoft will release its highly anticipated title ‘Throne and Liberty (TL)’ domestically in December. Although a global release was initially expected within the year, the company now aims to launch it next year in partnership with its publishing partner, Amazon Games, based on domestic performance. Facing prolonged absence of new titles and continued poor results, NCSoft has announced plans for organizational reform. It will conduct company-wide process and structural reviews and establish new strategies.
Unlike other game companies aiming to increase sales through new releases in the second half, Krafton plans to improve performance by enhancing ‘PUBG: Battlegrounds.’ Currently, Krafton and its 11 independent studios are developing more than 20 new games, including ‘Bird That Drinks Tears,’ ‘Project Black Budget,’ and ‘Project Gold Rush,’ but it is expected to take considerable time before these are released.
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