Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NCsoft Corp (XKRX:036570, Financial) reported a positive quarter-over-quarter operating profit of KRW5.2 billion, driven by reduced severance payments.
- The company turned profitable quarter-over-quarter with a net income of KRW37.5 billion.
- Lineage W mobile game sales increased by 8% quarter-over-quarter, indicating strong performance in this segment.
- The company has outlined a robust sales growth strategy, aiming for sales in the range of KRW1.4 trillion to KRW1.5 trillion per annum using legacy IPs.
- NCsoft Corp plans to release four new titles, including AION 2 and LLL, from the second half of this year to early next year, which could drive future growth.
Negative Points
- Year-over-year, sales were 9% lower due to a decline in flagship PC and mobile games.
- Operating profit dropped 80% year-over-year due to decreased sales.
- Net income was down 34% year-over-year, impacted by non-recurring gains from financial assets and foreign currencies.
- Mobile game sales decreased by 4% quarter-over-quarter, with Lineage M and Lineage 2M experiencing declines.
- Online PC game sales decreased by 11% quarter-over-quarter, affected by diminished Guild Wars 2 expansion sales.
Q & A Highlights
Q: Regarding AION 2, how is this game different from existing legacy IPs, and what business models or monetization schemes does it have? Additionally, how does AION 2 plan to address the negative reputation of Lineage-like games?
A: (Byeong-Moo Park, Co-CEO) AION 2 inherits the spirit of the original AION but incorporates technical advancements. It strengthens PvE and raid aspects, differing from Lineage-like games. While it will have pay-to-win elements, it won't follow the typical Lineage monetization scheme. We are confident about AION 2 and will introduce detailed features through live streaming and FGT events to gather feedback and insights.
Q: Are there additional cost reductions regarding headcount planned for this year?
A: (Won Jun Hong, CFO) Compared to last year, our employee number decreased by 15%. We plan to streamline our cost structure further, including headcount measures, especially in overseas subsidiaries. We aim to optimize labor costs to meet market consensus.
Q: Could you provide additional context behind the sales guidance for 2026, including the sales mix and marketing costs?
A: (Won Jun Hong, CFO) We have a realistic sales case of KRW600 billion to mid KRW600 billion for new IPs, with seven IPs in the pipeline. AION 2 will account for half of the sales mix, based on conservative assumptions. Marketing costs will be around 5% to 6% of total sales, focusing on ROI analysis and targeted strategies.
Q: How do you plan to address the challenges of launching new IPs in a competitive market, especially for AION 2 and LLL?
A: (Byeong-Moo Park, Co-CEO) AION 2's monetization scheme will be gradually released, and we will gather feedback from user segments. AION 2 inherits high retention elements from the original AION. For LLL, although competition is fierce, we are confident in its unique content and retention potential.
Q: What is the sales figure for TL outside of Korea and Taiwan, and is it based on actual sales or an annualized number?
A: (Byeong-Moo Park, Co-CEO) The sales figure for TL is an annualized number, as it hasn't been a year since its global launch. However, it aligns with the sales performance over the past eight months.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
