Nashinpyung Downgrades NC Credit Rating from 'AA' to 'AA-' Due to Turnaround to Deficit

Nice Credit Rating has downgraded NCSoft's long-term credit rating from AA (negative) to AA- (stable) on the 4th.

Nice Credit Rating stated, "With the domestic game market's growth slowing and the business environment deteriorating, sales of mobile games utilizing the Lineage intellectual property (IP) are on a downward trend, along with a gap in major new releases and poor performance, making it likely that sales recovery this year will take time." They added, "Due to weakened operating cash flow and non-recurring capital expenditures (CAPEX), the capacity for cash flow improvement is limited in the short to medium term."

They further commented, "In a deteriorated gaming industry environment, consistent new releases are a key factor determining business performance to increase user engagement," and added, "Key monitoring factors include the level of business stability enhancement by genre, region, and platform through self-developed new titles, publishing new titles, and mergers and acquisitions (M&A) of game developers, the level of profitability improvement following sales recovery, and whether the current level of financial stability is maintained."

NCSoft recorded an operating loss of 109.2 billion KRW on a consolidated basis last year, turning to a deficit compared to an operating profit of 137.3 billion KRW the previous year. This was the first deficit since 1998. Sales decreased by 11.3% year-on-year to 1.5781 trillion KRW, and net profit fell by 56% to 94.1 billion KRW.

NCSoft