NCSoft Steady with Aion 2... Anticipation Grows for Lineage Classic [Click e-Stock]

Aion 2 Maintains Early Traffic and Revenue
Significant Performance Improvement Expected with Lineage Classic

Despite the recovery in NCSoft's performance driven by the steady progress of Aion 2, the company's stock price has yet to rebound. Analysts attribute this to concerns over the sustainability of its revenue and the low profitability associated with its "good" business model (BM).

On January 7, Yuanta Securities maintained its target price for NCSoft at 310,000 won and its "Buy" investment rating. The previous day's closing price was 215,500 won.

Since the sharp decline following the launch of Aion 2 on November 19 last year, NCSoft's share price has been gradually recovering. Although both traffic and revenue have met market expectations-such as 1.5 million daily active users (DAU) in the early stages and cumulative sales of 50 billion won in the first three weeks-the stock has not yet returned to its pre-launch levels.

This is interpreted as reflecting concerns over the future sustainability of current traffic and revenue figures. There are also worries about low profitability stemming from the "good BM," which avoids excessive monetization schemes.

However, at the beginning of the year, traffic levels are estimated to be similar to or higher than those seen immediately after launch. The business model is also believed to be maintaining daily revenue of over 2 billion won, thanks to a high membership subscription rate and purchases of character appearances. In the past, when Lineage Mobile and Lineage 2 Mobile were launched, stock prices initially fell but later rose as traffic and revenue remained strong.

Yuanta Securities estimated Aion 2's sales for the third quarter of last year at 75 billion won (with payment volume at 102.5 billion won). Reflecting a surge in marketing expenses in the fourth quarter and increased personnel costs, including year-end bonuses, operating profit was projected at 3.5 billion won. For the first quarter of this year, with Aion 2's sales fully reflected and lower platform commission rates, operating profit is expected to surge to 131.6 billion won with an operating margin of 25%.

Aion 2 has positioned itself as a "good game" that can be enjoyed without heavy spending. However, among Lineage's loyal customer base, there are many "heavy users" who prefer to spend significantly to enjoy the game. "Lineage Classic," which will be released in Korea and Taiwan on February 7, is based on a 297,000 won monthly subscription and includes probability-based items.

Lee Changyoung, a researcher at Yuanta Securities, stated, "Lineage's loyal customers will be motivated by equipment and competitive combat, resulting in a higher average revenue per user (ARPU) than Aion 2." He added, "With platform commission savings expected to reach 115 billion won annually, this will contribute to this year's performance and help alleviate market concerns."