Netmarble narrows loss in Q3 thanks to new game releases

[Courtesy of Netmarble]

South Korean gaming company Netmarble reported improved financial results for the third quarter of 2023, aided by the success of its new game releases. According to the preliminary data released by Netmarble on Thursday, the company’s operating loss for the July-September period was 21.9 billion won ($16.7 million), markedly improving from a loss of 38 billion won a year ago.

While the revenue for the third quarter was 630.6 billion won, down from a year ago, it increased by 4.5 percent versus the previous quarter. The company also managed to reduce its net loss, which amounted to 28.4 billion won.

Netmarble’s regional revenue distribution shows that 47 percent of its revenue comes from North America, 17 percent from Korea, 12 percent from Europe, 10 percent from Southeast Asia, 6 percent from Japan, and 8 percent from other regions, highlighting the significant role of overseas markets that make up 83 percent of the company’s total revenue.

Netmarble attributed its improved performance to the successful launch of new games in the third quarter, such as ‘Seven Knights Idle Adventure’ and ‘Tower of God: New World,’ which contributed to increased revenue and EBITDA compared to the previous quarter.

Breaking down its revenue by genre, Netmarble reported that casual games accounted for 44 percent, role-playing games (RPGs) for 35 percent, massively multiplayer online role-playing games (MMORPGs) for 10 percent, and other categories for 11 percent.

Among its games, ‘Marvel Contest of Champions’ contributed 10 percent of the revenue, ‘Jackpot World,’ ‘Cash Frenzy,’ and ‘Lotsa Slots’ 8 percent each, while ‘Seven Knights Idle Adventure,’ ‘Tower of God: New World,’ and ‘Grand Cross’ each contributed 5 percent. In total, the top 10 games generated about 59 percent of the company’s total revenue.

In terms of operating expenses, Netmarble reported operating costs of 652.5 billion won, which marked a 10.9 percent decrease compared to a year ago, but a 1.9 percent increase compared to the last quarter.

Within these expenses, payment fees, which constitute 38 percent of the total costs, were down by 14.1 percent compared to the previous quarter, driven by the growth in revenue from the company’s intellectual property (IP) games. Employee wages, representing 29 percent of the total costs, fell by 6.5 percent on-year and 11 percent from the previous quarter.

Marketing expenses grew by 29 percent compared to the previous quarter, and by 0.6 percent on-year, largely attributed to the release of new games in the third quarter.