In a bleak gaming market, only Nexon logs record-breaking profit

Nexon achieved record earnings in 2023 driven by strong growth in its major franchises. NCSoft and Netmarble reported decreased operating profits while Wemade recorded an operating loss due to surging labor costs.

Nexon's sports game FC Online"posted record-breaking revenue for 2023, Nexon said on Thursday. Pictured above is a poster for FC Online featuring Son Heung-min. [NEXON]

While the rest of the domestic game industry looks bleak as the market retracts in the aftermath of Covid-19 pandemic, only Tokyo-listed Nexon managed to log record-breaking earnings in 2023 driven by strong growth in major franchises.

Nexon’s operating profit for the full year of 2023 jumped 30 percent on year to a record high of 134.7 billion yen ($906 million), which still came in below the market outlook that had ranged between 141.6 billion yen and 148 billion yen.

Revenue surged 20 percent to 423.4 billion yen, another record-breaking figure that also missed market expectations, which were set between 426.7 billion yen and 435 billion yen.

Net profit decreased 30 percent to post 70.6 billion yen, falling far short of the market consensus of 121.7 billion yen to 126.8 billion yen.

Nexon saw strong growth from its games such as MapleStory,FC Online and FC Mobile, Wars of Prasia, Dave the Diver and The Finals. Dungeon&Fighter, Blue Archive and MapleStory: The Legends of Maple, released in China, also achieved solid growth.

Following the success of its major franchises and new games, the game publisher has hefty lineups planned. Season two of The Finals will be released in March, and new lineups this year include Dungeon&Fighter Mobile in China, as well as role-playing game (RPG) The First Berserker: Khazan, massively multiplayer online role-playing game (MMORPG) Mabinogi Mobile and the third-person shooter game The First Descendant

NCSoft reported operating profit of 137.3 billion won ($103.3 million), down 75 percent on year.

The figure missed the market consensus of 146.6 billion won compiled by market tracker FnGuide.

Revenue slumped 31 percent to 1.78 trillion won, in line with the market consensus.

Net profit also lost 51 percent to 213.9 billion won, outperforming analysts’ expectations of 206.6 billion won.

NCSoft's "Throne and Liberty" will be released in the global market this year, the company said Thursday. [NCSOFT]

The decrease in sales was attributed to the poor performance of the mobile games in the company's Lineage franchise, which fell 38 percent to 1.2 trillion won. The figure made up 67 percent of total revenue.

By region, Korea took up 64 percent of total revenue with 1.15 trillion won, followed by other Asian regions accounting for 349.9 billion won, or 19 percent of the total revenue. North American and Europe contributed 7 percent of the total sales.

NCSoft plans to release its latest MMORPG, Throne and Liberty, globally this year. It’s also developing new game titles called Project BSS and Battle Crush, which are set for release sometime during the first half of this year.

Netmarble slimmed down its operating loss to 69.6 billion won compared to the year before, missing the market consensus of an 80.6 billion won operating loss. It was able to curb losses from selling its 6 percent stake in the K-pop agency HYBE for 568.7 billion won last November and cutting costs.

Revenue dipped 6.4 percent to 2.5 trillion won, in line with analysts’ expectations of 2.49 trillion won.

It logged net loss of 313.3 billion won, exceeding market expectations of a 111.5 billion won net loss.

The company said that it expects “meaningful results” from the second quarter this year as its lineup of new game releases begins rolling out in April.

Netmarble will release four new titles — Arthdal Chronicles: Three Factions, Solo Leveling: ARISE, Raven 2 and King Arthur: Legends Rise — by first half of this year and will bring Ni no Kuni: Cross Worlds to China.

Its much anticipated RPG, The Seven Deadly Sins: Origin is also scheduled for release latter half of this year. The company is also developing two new console games.

Wemade recorded operating loss of 112.6 billion won due to a surge of labor costs. Revenue jumped 31 percent to 607.2 billion won last year, while net loss was 209.6 billion won over the period.

The company said the revenue jump was derived from the strong performances of its latest MMORPG Night Crow, and the licensing of its Mir franchise to China.

Kakao Games’ operating profit nose-dived 57.7 percent to 74.5 billion won, narrowly missing the market expectation of 74.3 billion won.

Revenue slumped 10.8 percent to 1.02 trillion won, in line with analysts’ projections.

The game publisher continued to a report net loss of 329.5 billion won, falling far short of the market consensus of a 30.2 billion won net profit.

The company will focus on global releases this year, such as those of ArcheAge War in nine Asian regions including Japan and Taiwan, Eversoul in Japan and Odin: Valhalla Rising in North America and Europe regions.

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