Declining Revenue and Rising Operating Expenses, Including Advertising Costs
"Delay Due to Partner Collaboration... A Strategic Decision"
The release date for Pearl Abyss's highly anticipated title 'Red Desert', originally expected in the second half of this year, has been postponed to the first quarter of next year.
On August 13, Pearl Abyss CEO Jin-Young Heo announced during the company's second-quarter earnings conference call, "Due to the need to coordinate with various partners on offline distribution, voice work, console certification, and schedule adjustments, we have unavoidably decided to delay the release by one quarter." He added, "We apologize for not being able to meet the promised fourth quarter release schedule."
He continued, "This is a strategic decision to ensure the game's success, and we ask for your understanding. We will announce the specific release date at an appropriate time based on business considerations, not at Gamescom."
'Red Desert' is Pearl Abyss's first AAA (blockbuster-level) console game and the sequel to 'Black Desert', which was launched in 2014. The release was initially targeted for the second half of 2021, but the schedule has been repeatedly postponed to improve content quality.
An official from an investment firm commented, "Confidence in the company's proposed timeline is waning. I am curious whether the plan to release the game in the first quarter of next year is truly reliable."
CEO Heo explained, "We will manage the schedule thoroughly and do our utmost to prevent any further delays."
On the same day, Pearl Abyss announced that it recorded an operating loss of 11.8 billion won on a consolidated basis in the second quarter of this year, widening its deficit. This represents a 101.9% decrease compared to the same period last year.
During the same period, sales amounted to 79.6 billion won, down 2.7%. Due to foreign exchange translation losses resulting from exchange rate fluctuations, the company posted a net loss of 22.7 billion won, marking a turnaround to a deficit.
Overseas sales accounted for 82% of total revenue. By region, North America and Europe made up 64%, while the domestic and Asian markets each accounted for 18%.
By intellectual property (IP), 'Black Desert' generated 54.9 billion won in sales, while 'EVE' brought in 24.2 billion won. According to the company, 'Black Desert' gained popularity by adding a new difficulty level to the boss in 'Land of the Morning Light: Black Shrine East Sea Province' and improving node and conquest wars.
Additionally, Black Desert Console launched PlayStation 5 (PS5) and Xbox X|S versions, establishing a stable gameplay environment through hardware upgrades. 'EVE Online' successfully hosted the EVE Fanfest alongside the release of its expansion pack 'Legion'.
Operating expenses rose to 91.3 billion won, up 4.3% year-on-year. Personnel expenses increased by 1.5%, while advertising and promotion costs surged by 43.9% due to marketing activities related to 'Red Desert'.
Pearl Abyss plans to strengthen marketing for new titles by participating in global game shows such as Gamescom, PAX West, and Tokyo Game Show in the third quarter.
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