Game publishers to implement big changes for future growth

[Courtesy of NCSoft]

South Korean game publishers are going all-out to boost competitiveness by diversifying genres and realigning businesses, with their third-quarter earnings projected to remain weak amid a lack of new releases.

NCSoft Corp., one of Korea’s leading game companies, formed a committee last week to kickstart a major internal transformation. The committee plans to drive comprehensive innovation, including organizational restructuring, decision-making system refinement, rational cost control and reduction, and measures to enhance competitiveness.

The committee comprises six executives including Koo Hyun-bum, NCSOft’s chief operating officer, Kim Taek-hun, chief publishing officer, Kim Sung-ryong, chief information officer, and Hong Won-jun, chief financial officer.

NCSoft Founder Kim Taek-jin is excluded from the committee, which is seen as a move to allow the executives to express their opinions freely to achieve substantial innovation.

NCSoft’s decision to tighten its management stems from an lack of factors that could lead to a performance rebound by the end of 2023.

The company’s operating profit in the second quarter of this year plunged 71.3 percent from the same period a year ago due to a decline in sales of its flagship “Lineage” mobile game series.

SK Securities Co. projected NCSoft to raise 22.6 billion won ($16.8 million) in operating profit in the third quarter, down 84.3 percent from a year ago.

NCSoft’s earnings have been impacted by the delay in the release of major new titles since the end of 2021, following “Lineage W,” and the influx of competition in the market due to the release of similar multiplayer online role-playing games.

NCSoft plans to release the new “Throne and Liberty” game in December in Korea and next year in other markets.

Fellow game developer Netmarble Corp., which is expected to log an operating loss for a seventh consecutive quarter in the third quarter of 2023, plans to focus on new releases in the fourth quarter after the success of new titles such as “Tower of God: New World” and “Seven Knights Idle Adventure.”

Of note are new titles that incorporate successful elements, an example of which is “Arthdal Chronicles: The Sword of Aramun” that uses drama intellectual property.

The company plans to begin services of its popular games, “The Seven Deadly Sins: Grand Cross” and “Second Country: Cross Worlds,” in China this year.

Krafton Inc., whose performance has deteriorated since the beginning of this year, is expanding second-party publishing, or investing in games developed by external developers in addition to its own to maximize growth.

Kakao Games Corp. is expanding its operation of collaboration characters by incorporating characters from other companies into its games.

Com2uS Corp., which posted consecutive losses for three quarters since the fourth quarter of last year, recently hired former analyst Kim Dong-hee as its executive overseeing investor relations matters after seeing its shares plunge by nearly half over the past year. With the hiring of its new IR officer, the company aims to enhance communication with investors and strengthen its IR strategy for corporate value improvement, leveraging Kim’s extensive experience and professionalism in the securities market.