NCsoft Strengthens Its Position as a Leading Gaming Stock Riding on 'Lineage 2M' Success

[Image source=Yonhap News]

[Asia Economy Reporter Eunmo Koo] NCSoft has been leading the game sector by hitting record highs since the beginning of the year. Thanks to the strong performance of 'Lineage 2 Mobile (Lineage 2M),' NCSoft's position as the top game stock is expected to remain solid this year.

According to the Korea Exchange on the 6th, NCSoft's stock price closed at 565,000 KRW on the 3rd, up 4.44% (24,000 KRW) from the previous trading day. During the session, it rose to 568,000 KRW, marking a 52-week high. NCSoft played a leading role in the domestic stock market's game sector by recording a 16.0% return over the past year, including a 9.7% increase last month. As of 9:55 AM on the same day, the stock price further rose to 585,000 KRW, setting a new record high.

It is analyzed that the success of Lineage 2M is influencing both earnings and stock price increases. Released on November 27 last year, Lineage 2M has reclaimed the number one spot in Google Play revenue, achieving daily sales exceeding 5 billion KRW. Most notably, it is encouraging that the impact on the revenue decline of the existing 'Lineage M' and PC Lineage series is minimal. Yoon Eul-jung, a researcher at Shin Young Securities, stated, "Since the launch of Lineage 2M, the daily active users (DAU) of Lineage M have not deviated significantly from their usual fluctuations, indicating that the cannibalization effect is likely less severe than the market fears."

With profit growth through new releases gaining momentum, expectations for future performance are also rising. According to financial information provider FnGuide, NCSoft's Q4 revenue last year is estimated at 518.7 billion KRW, a 29.8% increase year-over-year, and operating profit is expected to rise 63.7% to 184.4 billion KRW. For this year, revenue is projected to grow 44.9% to 2.44 trillion KRW, and operating profit is expected to increase 88.2% to 979 billion KRW.

Thanks to the success of Lineage 2M, NCSoft's position as the leading game stock is expected to remain strong this year. First, Lineage 2M is anticipated to generate better-than-expected profits, potentially filling the gap caused by the lack of new releases in the first half. Additionally, one of 'Aion 2' or 'Blade & Soul 2' is planned for release in the summer, and a global launch of Lineage 2M is scheduled within the fourth quarter, raising expectations for new titles. Oh Dong-hwan, a researcher at Samsung Securities, commented, "It may be difficult to find stocks that can threaten NCSoft within the game sector this year. NCSoft will continue to be the leading stock driving the sector."

Benefits from the expansion of the Chinese cloud gaming market are also expected. NCSoft's flagship title, 'Blade & Soul,' has been conducting a closed beta test (CBT) for cloud gaming services through Tencent since last month. With the full-scale commercialization of 5G in China last year, the number of 5G subscribers in China is expected to surge to 200 million this year, and the cloud gaming market is projected to expand to 370 million users and a market size of 19.3 billion yuan (approximately 3.3 trillion KRW) by next year. Lee Kyung-il, a researcher at Cape Investment & Securities, stated, "As the Chinese cloud gaming market grows steadily, royalty income from Blade & Soul in China is also expected to increase."

This content was produced with the assistance of AI translation services.