Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Q4 online PC game sales increased by 16%, marking the highest quarterly sales in the past two years.
- LinageW achieved a sales rebound driven by the popularity of Reboot's World, released for the game's 3rd anniversary.
- Royalty sales increased by 26% year-over-year, contributing positively to the revenue.
- NCsoft Corp (XKRX:036570, Financial) plans to return 30% of consolidated net income to shareholders as cash dividends over the next three years.
- The company is focusing on global title launches and customer-centric operations to extend product life cycles.
Negative Points
- Q4 sales were down by 6% year-over-year due to a decline in mobile game sales.
- The company reported an operating loss of 129.5 billion won in Q4, driven by one-off severance benefits and increased marketing expenses.
- Full-year sales declined by 11% year-over-year, primarily due to a decrease in mobile game sales.
- Operating costs increased by 24% year-over-year, with labor costs rising significantly.
- The company experienced a net loss of 7.6 billion won in Q4, despite gains from higher foreign exchange rates.
Q & A Highlights
Q: What measures are being taken to address the challenges in the MMORPG market, particularly with the launch of Ion 2?
A: The MMORPG market is experiencing stagnation, but NCsoft believes there is potential for growth with new user experiences. They plan to differentiate their approach for Ion 2 by targeting Korean and Taiwanese users first, followed by North American and European users, leveraging lessons from previous launches. (Respondent: Unidentified_6)
Q: What are NCsoft's plans for new IP investments, and how do they compare to competitors?
A: NCsoft plans to invest around CNY70 billion annually in new IPs, focusing on genres like subculture and shooters. They are also exploring M&A opportunities to strengthen their portfolio, utilizing treasury stocks for potential deals. (Respondent: Unidentified_6)
Q: Is there a plan for further company restructuring following the voluntary resignation program?
A: NCsoft has reduced its headcount to 3,001, including spin-offs, and does not have a specific target for future optimization. Existing IPs will be managed by HQ, while new titles will be developed by subsidiaries and investees. (Respondent: Unidentified_6)
Q: What is the status of the game "Tech," and are there any marketing plans involving game shows?
A: The release of "Tech" is delayed for further polishing, with plans to launch in the second half of the year. NCsoft is focusing on user-driven feedback and tailored marketing strategies, which may include participation in game shows depending on the IP. (Respondent: Unidentified_6)
Q: How is NCsoft incorporating AI technology into its operations, and what is the potential for collaboration with external clients?
A: AI is considered essential for NCsoft, with applications in game development, operations, and QA processes. They are focusing on specialized AI assets and plan to monetize these technologies by offering solutions to other developers. (Respondent: Unidentified_6)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
