Korean game publishers NCSoft and Krafton report best top line for Q1

2022.05.13 11:11:33 | 2022.05.13 14:04:32

“Lineage W”이미지 확대

“Lineage W”

Major Korean game publishers NCSoft and Krafton Inc. achieved their best quarterly revenues during the first quarter ended March on strong performance of their games overseas, while another gaming giant Nexon Co. performing unimpressively raised expectations for the coming quarters with new releases.

NCSoft on Friday disclosed that its consolidated operating profit for the January-March period was twice bigger from the previous quarter and more than four times from a year ago at 244.2 billion won ($189.4 million).

Sales rose 4 percent on quarter and 54.2 percent on year to 790 billion won, its highest quarterly record thanks to the success of its online game “Lineage W” which was released end of last year. Net income rose 38 percent on quarter and more than doubled on year to 168 billion won.

By sector, mobile game sales came to 640 billion won, up 6 percent on quarter due to Lineage W and the rebound in the popularity of “Lineage M”. PC online games amounted to 93.1 billion won, up 4 percent on quarter.

By region, sales in Korea made up 63.7 percent of total sales. Sales in Korea also rose 8 percent thanks to a rebound in mobile game sales. Sales in the Asian market took up 26.7 percent followed by sales in the North America and EU region which took up 4.7 percent of sales.

Total operating expenses fell 16 percent on quarter but rose 20 percent on year to 546.1 billion won. Labor costs fell 15 percent on quarter to 218.5 billion won on decreased Lineage W incentives and marketing costs also fell 65 percent on quarter to 41.8 billion won after the global launch of Lineage W.

NCSoft plans to hold a summer showcase for its upcoming release “Throne and Liberty”, a multiplayer online role-playing game part of the Lineage series.

Shares of NCSoft were up 12.92 percent at 450,000 won in morning trade on Friday.

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Krafton on Thursday also reported its highest quarterly revenue during the first quarter, owing to the surge in monthly active users (MAU) as its flagship intellectual property “PUBG: Battlegrounds” went free-to-play in January.

Krafton’s operating profit came to 311.9 billion won on a consolidated basis, surging from 43 billion won the previous quarter and up 37.3 percent on year for the January to March period.

Revenue amounted to 523 billion won, rising 13.5 percent on year led by flagship IP “Battlegrounds.” Net income surged 26.4 percent from the same period last year to 245.2 billion won.

By sector, mobile game sales rose 4.5 percent on year to 395.9 billion won, and PC game sales rose 60.6 percent on year to 106.1 billion won. Sales of console games and e-sports also jumped 29.8 percent on year to 20.9 billion won.

Operating costs amounted to 211.1 billion won, falling 47.4 percent from the previous quarter and 9.7 percent from the previous year. Personnel expenses rose 30.5 percent on year to 110.5 billion won but paid commissions shrank by 26.5 percent on year to 55.9 billion won.

Marketing costs surged 134.8 percent on year to 17.5 billion won.

 “PUBG: Battlegrounds”이미지 확대

“PUBG: Battlegrounds”

Krafton emphasized that it will continue strengthening its profitability by updating and marketing its main game title “Battlegrounds.”

“PUBG mobile grew in both the Chinese and Indian market and we expect continued growth during the second quarter,” said Bae Dong-geun, the Chief Financial Officer (CFO), during the earnings conference call.

Shares of Krafton were up 3.77 percent at 261,500 won in Friday morning trade.

Nexon among the three majors reported deterioration in the bottom line for the first quarter due to increased marketing costs from its new releases.

Tokyo-trading Nexon disclosed on the Tokyo Stock Exchange on Thursday that its consolidated operating profit for the January to March period fell 11 percent on year to 399 billion won.

Revenue rose 3 percent on year to 943 billion won while net profit fell 13 percent to 417.6 billion won.

“Dungeon & Fighter Mobile” which was released domestically in March, reached 1 million users and topped both Google and Apple app charts.

Nexon is expecting improved earnings in the latter half of the year as it is planning to launch new games in various genres such as the battle game “DNF Duel”, an MMORPG sequel “Hit2”, free-to-play cooperative third-person shooter “ARC Raiders” and free-to-play cross-platform “KartRider: Drift.”

By Susan Lee

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