Thanks to Lineage2M... NC Reports Q4 'Earnings Surprise' (Comprehensive)

Q4 Revenue Up 34%·Operating Profit Up 25%
Lineage2M Tops Google Play Revenue Rankings for 11 Consecutive Weeks
Possibility of Joining '2 Trillion Won Club' This Year
However, Weak Performance in Q1-Q3 Last Year Due to No New Releases
Annual Operating Profit Down 22% Due to Decline in Royalty Revenue

[Asia Economy Reporter Jin-gyu Lee] With the huge success of Lineage2M, known for the phrase 'Taekjin hyung, did you stay up all night?', NCSoft achieved an 'earnings surprise' in the fourth quarter of last year. Revenue increased by 34% and operating profit rose by 25% compared to the same period last year. However, since the success of Lineage2M was only reflected in the fourth quarter, and due to a decrease in royalty revenue and increased marketing expenses, the overall profitability for the year worsened compared to the previous year. The other major three companies, including Nexon and Netmarble, posted results similar to the previous year, showing little change.

◆ Strong performance of 'Lineage2M' = On the 12th, NCSoft announced that its revenue for the fourth quarter of last year was 533.8 billion KRW, a 34% increase compared to 399.7 billion KRW in the same period last year. Operating profit for the same period was 141.2 billion KRW, up 25% from 112.6 billion KRW in the previous year. However, since Lineage2M, which was released on November 27 last year, did not have its performance fully reflected in the fourth quarter, and the first to third quarters showed somewhat sluggish results without any notable new releases, the annual performance did not grow. Last year's revenue was similar to the previous year at 1.7012 trillion KRW, while operating profit decreased by 22% to 479 billion KRW compared to the previous year.

The improvement in fourth-quarter results is attributed to the combined revenue effect of Lineage2M and 'LineageM'. The average daily revenue of Lineage2M in the fourth quarter of last year was between 4 billion and 5 billion KRW, exceeding the market's initial expectation of 3 billion to 4 billion KRW. Despite concerns that LineageM's revenue would decline due to the launch of Lineage2M, LineageM posted revenue in the 210 billion KRW range in the fourth quarter, an increase from the third quarter's 200 billion KRW range, showing strong performance.

According to mobile application ranking analysis site Gevolution, Lineage2M holds the number one spot in revenue on Google Play. Since achieving first place in Google Play revenue rankings on December 1 last year, it has maintained the top position for 11 consecutive weeks. LineageM, which had held the number one revenue spot on Google Play for two and a half years, now maintains the second position, leading to evaluations that the Lineage series has dominated the mobile gaming market.

◆ Challenge for the '2 trillion KRW club' this year = The industry is paying close attention to whether NCSoft can enter the '2 trillion KRW club' this year, with the full revenue effect of Lineage2M reflected. NCSoft has remained in the 1.7 trillion KRW revenue range for three consecutive years since 2017. The daily revenues of Lineage2M and LineageM remain high this year, and the global launch of Lineage2M is also scheduled, raising expectations more than ever. Additionally, new mobile titles based on proprietary intellectual properties (IPs) such as 'Aion2' and 'Blade & Soul 2' are expected to be released this year. The securities industry expects NCSoft's annual revenue to exceed 2 trillion KRW this year as the full impact of Lineage2M's performance is reflected. Researcher Jong-won Lee of Sangsangin Securities predicted, "NCSoft's first quarter this year is expected to record the highest operating profit ever, and the global launch momentum starting from the second quarter will expand the stock's upside."

◆ Little change expected in the 3N's performance = Meanwhile, the revenues and operating profits of the other major three companies, including Nexon and Netmarble, are expected to be similar to the previous year. Nexon is expected to record revenue of 2.5 trillion KRW and operating profit of 1 trillion KRW last year, similar to the previous year. Nexon plans to aim for a second heyday by launching 'Dungeon & Fighter Mobile (tentative)' in China in the first half of this year. Also, the mobile game 'Baram-eui Nara: Yeon', developed based on the long-running PC game 'Baram-eui Nara' IP, is scheduled to be released soon.

Netmarble, which did not release any notable new titles last year, is expected to record revenue of 2.22 trillion KRW, an 8% increase from the previous year, and operating profit of 220 billion KRW, an 8% decrease compared to the previous year. However, with new titles that were delayed last year set to be released one after another starting from the first half of this year, expectations for performance improvement are growing. 'A3: Still Alive', a fusion-genre mobile new title that Chairman Jun-hyuk Bang confidently predicted would become a trend, is scheduled for release in March, and 'Seven Knights 2', 'Magic: Mana Strike', and 'Second Country' are also in the final stages of release preparation.

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