Global game publisher Neorigin announced on the 16th that its consolidated sales for the first half of this year reached 20 billion KRW, a 22% increase compared to the same period last year. During the same period, sales in the game business segment amounted to 19.6 billion KRW, marking a 79% growth compared to 10.9 billion KRW in the previous year.
However, due to one-time expenses such as advertising costs for key games and initial marketing expenses for new games, an operating loss of 3.1 billion KRW was recorded in the first half. Neorigin expects significant profitability improvements as marketing effects for core games are maximized from the second half of the year, accelerating sales growth while promotional costs gradually decrease.
Neorigin’s sales growth trend is also clear on a quarterly basis. Consolidated sales for the second quarter of this year reached 12.1 billion KRW, a 46% increase compared to the same period last year. In particular, sales in the game business segment alone were 11.8 billion KRW, a 159% improvement compared to 4.5 billion KRW in the second quarter of last year.
Neorigin’s top-line growth in the first half was driven by its flagship title ‘Goddess War’ celebrating its 4th anniversary with updates and large-scale promotions, which expanded sales. In January this year, the company expanded its service regions by acquiring the European and American rights for the game ‘Law of Power.’ Additionally, the steep growth trend continued with new sales reflected from the launch of the new title 'Apex Girls' in Japan at the end of March.
The company’s profitability is also expected to gradually improve. In the first half of this year, operating losses occurred due to increased advertising expenses for the 4th anniversary promotion of the flagship title ‘Goddess War’ and initial marketing costs for the new title 'Apex Girls.' In the second half, as advertising expenses for major games such as Goddess War, Apex Girls, and Law of Power gradually decrease, profit margins are expected to improve. The company also explained that since it recently streamlined its relatively low-profit general trade business between Korea and China, a return to profitability is anticipated from the third quarter.
A Neorigin representative said, “We have been restructuring our business around the high-profit game business, and as the results began to materialize in earnest this year, we were able to achieve sales growth. Although one-time promotional expenses for large-scale updates and new game launches increased in the first half due to the nature of the game business, we expect operating profit to turn around from the third quarter as profit margins improve centered on key games.”
He added, “We will expand the game business not only by maximizing sales of existing games but also through the release of various new titles. For the activation of short-form content, which is being promoted as a new business, we will focus on building related infrastructure such as IP (intellectual property) acquisition, production, and management to nurture it as a future growth engine.”
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