NHN Hit Hard by Timeff Incident... Baduk and Poker Prove to Be Lifesavers

Q3 Webboard Game Revenue Up 8.1% Year-on-Year

Webboard games such as Go-Stop, Baduk, and Poker are serving as a cash cow for NHN, which is facing a crisis with TMON and WEMAKEPRICE (Timep).

According to industry sources on the 13th, NHN's webboard game sales in the third quarter of this year increased by 8.1% compared to the same period last year. The company's gaming division recorded sales of 112.5 billion KRW, a 2.1% growth year-on-year, with the increase in webboard game sales standing out among them.

The strong performance of NHN's webboard games is playing a key role in defending earnings amid the blow dealt to its subsidiary NHN Payco by the Timep crisis. NHN posted an operating loss of 113.4 billion KRW in the third quarter due to the recognition of uncollected receivables from the Timep incident as a one-time bad debt expense. Excluding this one-time bad debt expense, the operating profit for the third quarter was 27.3 billion KRW. NHN is providing liquidity support, including lending 60 billion KRW in operating funds to NHN Payco.

The reason webboard games have helped NHN defend its performance is due to steady demand. Webboard refers to a genre of games including Go-Stop, Baduk, Poker, and Janggi (Korean chess). These games are characterized by their long-standing popularity among older age groups. For example, NHN's Hangame Poker has consistently ranked within the top 10 to 30 in sales over the past year.

Additionally, compared to other genres such as Massively Multiplayer Online Role-Playing Games (MMORPGs), webboard games require less development cost and manpower, resulting in relatively shorter development periods. This structure yields high returns on investment.

Among NHN's webboard games, Hangame Poker Classic showed remarkable results. The monthly new users in the third quarter more than doubled compared to the same period last year. On the 8th of last month, it also achieved its highest-ever sales ranking of 7th place on the Google Play Store.

The industry is also paying attention to the potential for global expansion. According to data from Business Research Insights, the global social casino game market was valued at $6.464 billion (approximately 9.0198 trillion KRW) by 2021 and is expected to grow by 84% over ten years to reach $11.87 billion (approximately 16.5633 trillion KRW) by 2031.

Jung Ho-yoon, a researcher at Korea Investment & Securities, explained, "Due to the Timep incident, NHN is expected to end this year with a net loss. However, excluding the one-time loss, the profit resilience based on the stable performance of the gaming division remains strong."