[Click eStock] "New Release Delay Variable... Kakao Games, Target Price Downgraded"

Kiwoom Securities has lowered the target price of Kakao Games from 19,000 KRW to 18,000 KRW due to delays in the release of new titles and uncertainties in game quality verification.

Jingu Kim, a researcher at Kiwoom Securities, explained, "The initial revenue recognition timing for Odin and ArcheAge War in Western regions has been postponed by one quarter, from Q2 and Q3 of 2025 to Q3 and Q4, respectively. The daily average revenue assigned for each period is 150 million KRW and 100 million KRW, respectively, but further confirmation is needed regarding the release timing."

He continued, "The global launch of Ares has been excluded from this earnings announcement lineup, reflecting the realistic situation, and all estimates related to it have been removed. Consequently, delays in the timeline of major new titles have inevitably led to a downward revision of this year’s earnings estimates compared to previous forecasts."

Researcher Kim expects Kakao Games to continue its operating loss trend this year. He stated, "We anticipated the release of Project Q in Q3 this year and expected flexible profit growth in the second half, but since the release has also been delayed, we believe operating profit improvement could begin as early as Q4 this year."

He added, "We have reflected additional pressure on earnings by lowering the 2025 expected revenue and operating profit by 15% and 38%, respectively, compared to previous estimates. To rebound corporate value, it is necessary to drive financial expectations by unveiling a console-based lineup that appeals to a global mass audience. The most important variable is whether the gameplay completeness of ArcheAge Chronicle, which is considered a highly anticipated title, is achieved."