Korea’s top game firms post disappointing Q3 earnings
[THE INVESTOR] Korea’s leading game companies reported lackluster sales and profits in the third quarter, as momentum for their signature games slowed down.
NCSoft logged 403 billion won (US$357 million) in sales with operating profit of 139 billion won, plunging 44 percent and 58 percent, respectively, the company said on Nov. 9. Its net profit nosedived 65.67 percent from a year ago to 94.4 billion won in the July-September period.
The weak performance was largely due to a decline in sales of “Lineage M” and other popular games in the absence of new releases.
NCSoft said it hopes to rebound next year by introducing five new titles including “Lineage 2 M.”
The operating profit of mobile game giant NetMarble Games in the same period fell 39.8 percent to 67.3 billion won on-year, also due to delayed new releases. The gamemaker's sales decreased 9.6 percent on-year to 526 billion won.
“Although we recently recorded a disappointing performance due to changes in internal and external environments, we are now stabilizing by recognizing and responding to these changes proactively,” said Netmarble CEO Kwon Young-sik.
Kakao Games, the game unit of Kakao, also logged lukewarm performance, weighed down by weak sales in mobile games and “PlayerUnknown’s Battlegrounds.”
Kakao Games ranked up 99.4 billion won in the third quarter, up 5.8 percent from a year earlier.
“The competitiveness of Kakao Games has been weakening as mobile massively multiplayer online role-playing games are gaining popularity and the market share of ‘PlayerUnknown’s Battlegrounds’ is declining,” said Eugene Securities analyst Jung Ho-yoon.
Forecasting dim prospects, he cut the 2019 sales estimate for Kakao Games from 423 billion won to 374 billion won.
Meanwhile, Nexon defied the negative trend. The firm saw its operating profit increase by 4 percent on-year to 238 billion won. Sales grew 15 percent to reach a record high of 696 billion won, backed by overseas sales, which jumped 25 percent to 463 billion won.
By Park Ga-young (email@example.com)