NCSoft is accelerating its pace of change. Shifting its focus from a portfolio centered on mobile massively multiplayer online role-playing games (MMORPGs) to PC and console-based game development, NCSoft has partnered with Sony, the world's leading company in the console market.
NCSoft recently signed a strategic partnership for global business cooperation with Sony Interactive Entertainment (SIE). Through this partnership, the two companies will collaborate on various global business initiatives, including the mobile sector. NCSoft is exploring ways to combine its core global IP and technological capabilities with SIE's competitive strengths in the global market.
Until now, NCSoft's business has been criticized for focusing mainly on mobile MMORPG development centered on the ‘Lineage’ IP. By sticking to games popular only in South Korea and some Asian countries, it has lacked competitiveness in North America and Europe, where PC and console-based non-MMORPG games dominate.
With the market concentrated in South Korea and a few other regions, NCSoft has also faced growth limitations. In the third quarter of this year, revenue and operating profit declined by 30% and 89%, respectively, compared to the previous year. South Korea accounts for about 70% of total sales, an overwhelming proportion. Considering NCSoft has subsidiaries in the U.S., Japan, Taiwan, the U.K., and Vietnam, this is somewhat disappointing.
In response, NCSoft has initiated change. It declared plans to expand its platform to PC and consoles and develop games across various genres. The first result of this is ‘Throne and Liberty’ (hereafter TL), scheduled for release on December 7. The game will initially launch on PC, followed by a console release in the first quarter of next year. After TL, NCSoft plans to release various console games such as ‘LLL’, ‘Battlecrush’, and ‘Project M’.
Since NCSoft lacks experience in the console market, external support is essential, making the partnership with SIE, the number one console company, a significant advantage.
SIE leads the console gaming sector with its ‘PlayStation (PS)’ series. The PS5, released in November 2020, has sold over 40 million units worldwide as of August. Notably, games like ‘Detroit: Become Human’, ‘God of War’, and ‘Horizon’, which were released exclusively on the PS series through contracts with SIE, have gained immense global popularity. NCSoft may also sign exclusive contracts with SIE for its upcoming titles.
Meanwhile, SIE is expected to leverage NCSoft’s strengths in the mobile domain. Industry speculation suggests that NCSoft will play a role in reinterpreting SIE’s IP for mobile games. SIE declared its entry into the mobile gaming market last August by acquiring the mobile game company ‘Savage Game Studios’.
Kim Taek-jin, CEO of NCSoft, said, “This global partnership marks the beginning of combining the core competencies, technologies, and expertise of both companies to create various synergies,” adding, “We will provide new and enjoyable experiences to many users beyond genres and regions.”
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