Korean game companies record quiet Q1, domestically

First quarter earnings for Korean game companies listed in foreign markets pushed through with impressive results, as opposed to domestically listed companies who had a quiet first quarter amid the economic slowdown and absence of new titles.

An image of Nexon's PC game FIFA Online 4 [NEXON]

First quarter earnings for Korean game companies listed in foreign markets pushed through with impressive results, as opposed to domestically listed companies who had a quiet first quarter amid the economic slowdown and absence of new titles.

Tokyo-listed Nexon and New York-listed Gravity showed solid performances with steady titles, but domestic game publishers did not release any new titles in the first quarter. Wemade released its first massively multiplayer online roleplaying game (MMORPG) Night Crows in five years, but its sales are not reflected in the first quarter, since it was released in April. Kakao Games released ArcheAge War at the end of March, and meanwhile, NCSoft recently filed suit against the game title for alleged copyright infringement of its Lineage 2M.

Nexon's net profit recorded above the market consensus with 52.8 billion yen ($393 million) in the first quarter of this year, up 31 percent on year.

Revenue was in line with market expectations reaching an all-time high of 124 billion yen, or 1.2 trillion won. The figure jumped 36 percent on year. Nexon’s revenue climbed for five consecutive quarters, and it is the first time within the game industry that a company’s quarterly sales went over the 1 trillion won mark.

Nexon attributed solid performances from PC games FIFA Online 4 and Dungeon & Fighter, as well as from mobile games FIFA Mobile and Blue Archive.

PC games took up 75 percent of the total sales with 93 billion yen. Revenue for mobile games also jumped 33 percent to 31 billion yen.

Net profit for New York-listed Gravity jumped 122 percent to 36.4 billion won. Revenue jumped 86.2 percent to 164.9 billion won. The increase in profit is due to the long-term popularity of its Ragnarok franchise including Ragnarok Online.

Revenue in Taiwan, Hong Kong and Macau took up 54 percent of the total, followed by 23 percent from Korea, Japan and China. By genre, mobile games took up 84 percent of the total revenue. PC games followed with 14 percent.

Krafton’s net profit jumped 9 percent to 267.2 billion won, beating the market consensus of 170.3 billion won.

Revenue inched upwards 3 percent to 538.7 billion won, above analysts’ expectations of 489.6 billion won. Even without any new game titles, Krafton managed to generate stable profit and sales with its prior Battlegrounds franchise. The company explained this was possible by efficiently managing its paid services with various collaborations and updates.

Among listed companies in Korea, Com2us’s net profit swung black with 40.6 billion won, far exceeding market expectations of 3 billion won.

Revenue jumped 44.5 percent to 192.7 billion won, above market consensus of 182.6 billion won.

The increase in profit and revenue is attributed to the global popularity of Summoners War: Chronicles. The company expects better quarterly earnings in the second quarter with the popularity of MMORPG and its new MMORPG Zenonia next month.

An image of Throne and Liberty (TL), a new massively multiplayer online roleplaying game (MMORPG) by NCSoft [NCSOFT]

Other game companies received relatively weak results. Long-reigning NCSoft's net profit fell 32.2 percent on year to 114.2 billion won. But the figure greatly surpassed the market consensus of a 43.1 billion-won net profit.

NCSoft's revenue fell 39.4 percent to 478.8 billion won, below market expectations of 506 billion won. Mobile games, which account for most of the revenue generated by the game company, fell 48.37 percent on year to 330.8 billion won as sales for Lineage W fell and stabilized since its release in November 2021.

Total revenue in Korea took up 63.4 percent of the total sales with 303.7 billion won, and total revenue in Asia followed with 99.4 billion won.

Despite a fall in profit and revenue, NCSoft is confident the release of its upcoming PC and console MMORPG, Throne and Liberty, will turn the tables around. The game is scheduled for release in the latter half of this year.

Netmarble logged a net loss of 45.8 billion won. The figure missed market expectations of 65.1 billion won. Revenue decreased 4.6 percent to 602.6 billion won, below the market consensus of 644.8 billion won. The game publisher expects to rebound with new games such as Solo Leveling: Arise and Arthdal Chronicles, scheduled for release in the second quarter, as well as with Ni no Kuni: Cross Worlds, A3: Still Alive and Shop Titans.

Kakao Games’ net profit fell 85 percent to 42.5 billion won, above the market consensus of 16.5 billion won. Revenue fell 6.45 percent to 249 billion won, below the market consensus of 280.6 billion won.

The fall in profit is attributed to the fall in sales of the company’s primary game title, Odin: Valhalla Rising, due to a lack of updates.

An image of Kakao Games' MMORPG ArchAge War released in March [KAKAO GAMES]

The company hopes for a rebound in the second quarter with performances from ArcheAge War, already released in March, and the new release of Odin: Valhalla Rising in Japan next month.

Wemade swung red to report a net loss of 28.5 billion won. The figure missed the market consensus of a 16.8 billion-won net loss. Revenue decreased 28.3 percent to 93.9 billion won, below analysts’ expectations of 114.5 billion won.

The lack of updates from its prior game titles contributed to the fall, but the publisher expects to swing black with its latest MMORPG Night Crows.

Shares for game publishers with weak results also fell. Netmarble’s shares decreased 10.46 percent to close at 58,200 won. Wemade shares fell 9.11 percent to 44,400 won. Com2us shares fell 2.58 percent to 64,300 won.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]