[Click e-Stock] "Netmarble Faces Limits of Multi-Title Strategy... Target Price Lowered"

On November 4, Kiwoom Securities maintained its Outperform (above market average) investment rating on Netmarble, stating, "A meaningful increase in corporate value can only be achieved by expanding the horizons of innovative gameplay and user-driven monetization." The firm revised its target price downward from 69,000 won to 67,000 won.

On this day, Kim Jingu, an analyst at Kiwoom Securities, explained, "The weakness of a multi-title release strategy is that if product lifecycle (PLC) management is lacking, revenue declines while operating and indirect costs do not decrease accordingly, resulting in lower profitability for each game."

Netmarble is fundamentally pursuing a consistent policy of releasing multiple mobile games. Kim pointed out, "The concern is that there is a lack of innovative gameplay that goes beyond the entrenched genres, and insufficient PLC management and maintenance for key new releases." He added, "Even 'RF Online Next' and 'Seven Knights Rebirth,' both launched this year, have recently seen a significant drop in sales rankings," and assessed, "'Vampire' also does not clearly break away from the entrenched patterns of existing domestic MMORPGs."

Regarding 'The Seven Deadly Sins: Origin,' which is expected to be a major new release next year, he commented, "I am not convinced that it can create a new sensation that surpasses the concepts and gameplay of existing similar genres."

Kim emphasized, "What is needed is innovative gameplay based on fun, going beyond conventional monotony," and added, "Korean games need to showcase gameplay based on rational user choice, rather than being dominated by pay-to-win monetization. In such cases, monetization should have a limited impact on gameplay outcomes while still enhancing user satisfaction."

Netmarble's operating profit for the third quarter is expected to be 100.6 billion won, similar to the previous quarter, thanks to the initial sales effect of 'Vampire.' However, Kim added, "It should be noted that annual non-operating profit may be limited due to the potential for impairment losses related to intangible assets and goodwill at year-end."

This content was produced with the assistance of AI translation services.