Netmarble Achieves Record Quarterly Earnings Riding the Success of 'Nahonrep'... 'Earnings Surprise' (Comprehensive)

Sales of 782.1 Billion KRW, Operating Profit of 111.2 Billion KRW
Highest Quarterly Sales Since Company Establishment

Netmarble Headquarters, Guro-gu, Seoul. Photo by Jinhyung Kang aymsdream@

Netmarble recorded an 'earnings surprise' in the second quarter of this year. This was supported by the success of new releases based on 'super IPs' such as Solo Leveling: Arise. Netmarble plans to further strengthen profitability by launching a total of about 10 new titles by next year.

Netmarble announced on the 8th that it posted consolidated sales of 782.1 billion KRW and operating profit of 111.2 billion KRW in the second quarter of this year. Sales increased by 29.6% compared to the same period last year. This is the highest quarterly sales since the company's establishment. Operating profit turned positive.

For the first half of the year, cumulative sales were 1.3675 trillion KRW, EBITDA 193.8 billion KRW, operating profit 114.9 billion KRW, and net profit 152.4 billion KRW.

The sales proportion by major games was as follows: Solo Leveling: Arise 20%, Marvel Contest of Champions 9%, Jackpot World 7%, Ratcha Slot 6%, Cash Frenzy 6%, and Arthdal Chronicles: Three Powers 5%. The company explained, "Due to the effect of new releases such as Solo Leveling, the domestic sales ratio increased by 7 percentage points compared to the previous quarter, and the RPG sales ratio also increased by 12 percentage points compared to the previous quarter."

The quarterly sales proportion by region was North America 40%, Korea 24%, Europe 13%, Southeast Asia 10%, Japan 6%, and others 7%. By genre, sales proportions were RPG 45%, casual games 34%, MMORPG 15%, and others 6%.

Operating expenses were 670.9 billion KRW, up 15.3% from the previous quarter and 4.7% from the same period last year. Labor costs were 182.7 billion KRW, slightly increased from the previous quarter due to salary raises. Marketing expenses increased to 143.7 billion KRW compared to the previous quarter due to new releases.

CFO Do said in a conference call that "Since 2022, we have thoroughly managed major expenses, and the effects are materializing this year. Among major expenses, the largest portion is payment commissions, which were maintained at around 39% until last year, but through expansion to PC platforms and others, it decreased to 35.9% in the first half of this year."

Netmarble plans to build a solid foundation by releasing four new titles in the second half of the year, including The Seven Deadly Sins: Grand Cross, King Arthur: Legend Rise, RF Online Next, and Demis Reborn, as well as 5 to 6 new titles next year.

Netmarble CEO Kwon Young-sik said, "The Seven Deadly Sins: Grand Cross is targeted for release by the end of the second quarter of 2025. Netmarble will independently handle PC and mobile marketing. Marketing for the console, PlayStation, will be conducted in collaboration with Sony."

He added, "In addition to the four new titles including The Seven Deadly Sins: Grand Cross, we are preparing to release 5 to 6 new titles in 2025. We plan to announce them separately in the second half of the year."

Game production utilizing external IPs will also continue. CEO Kwon said, "We believe Netmarble is the best at turning IP into games. We actively utilize internal IPs and, if necessary, also use external IPs. If we have strong development capabilities and well-established IPs, we will actively use external ones as well, but we plan to develop games by more actively utilizing internal IPs whenever possible."

CFO Do said, "Over the past two years, we have continuously strived to overcome management crises with the goals of 'structural improvement' and 'selection and concentration.' We will not be complacent with the current level and will continue to achieve steady performance growth through ongoing cost management."