Kakao Games sees 8% operating profit growth in Q1

[Courtesy of Kakao Games Corp.]

Kakao Games Corp. reported an estimated operating profit of 12.3 billion won ($9.01 million) for the first quarter of 2024, or an 8.12 percent increase from the corresponding period during the previous year, the company said on Wednesday.

But the estimated first-quarter operating profit fell short of market expectations, trailing 10.5 percent below the 13.7 billion won forecast compiled by Yonhap Infomax. Sales for the period totaled 246.3 billion won, reflecting a slight 1.2 percent decrease compared to the same period in 2023, while net profit saw a substantial decline of 91.1 percent, plummeting to 380 million won.

Breaking down sales by segment, mobile game sales totaled 161.3 billion won, PC game sales amounted to 15.6 billion won, and other sales stood at 69.4 billion won. Sales from the gaming business currently in service hit 176.9 billion won, marking a 5.3 percent increase from the same in 2023 and a 4.1 percent rise from the previous quarter.

“Odin: Valhalla Rising”

The company attributed its results to the consistent performance of titles such as “Odin: Valhalla Rising,” the successful launch of the new title “R.O.M,” and the positive impact of content updates for the PC online game “Kakao Battleground.”

Operating expenses for the first quarter totaled 234 billion won, reflecting a 1.6 percent decrease from the same period in 2023. Within operating expenses, payment fees amounted to 103 billion won, personnel expenses totaled 54.5 billion won, amortization of intangible and tangible assets totaled 16.2 billion won, marketing expenses stood at 11.2 billion won, and other expenses amounted to 49.2 billion won.

Kakao Games noted that although personnel expenses increased due to factors such as reflecting salary increases and payment fees increased due to higher profit distribution to developers, amortization expenses including intangible assets decreased.