Game Stocks Benefiting Despite Poor Performance

Momentum Expectations, COVID-19 Spread Also Plays a Role

[Asia Economy Reporter Kum Boryeong] The stock prices of gaming companies are drawing attention as they show strength despite last year's poor performance.

According to the Korea Exchange on the 13th, NCSoft's closing price on the previous day was 650,000 KRW. Although last year's announced performance showed sales of 1.7012 trillion KRW and operating profit of 479 billion KRW, down 0.81% and 22.11% respectively from the previous year, the stock price rose 0.93% (6,000 KRW) compared to the previous session.

Com2uS and Gamevil, which also released their results alongside NCSoft, did not perform well last year. Com2uS's sales last year were 469.6 billion KRW, and operating profit was 127 billion KRW, down 2.5% and 13.4% respectively from the previous year. Gamevil recorded an operating loss of 17.1 billion KRW last year. In particular, the operating loss in the fourth quarter of last year widened compared to the previous quarter. However, the stock prices of Com2uS and Gamevil on the previous day rose 0.56% (600 KRW) and 0.18% (50 KRW) respectively compared to the previous session.

Although last year's performance was unstable, remaining momentum is supporting the stock prices. In the case of NCSoft, the mobile new release 'Lineage 2M' launched in November last year plays a significant role. Lineage 2M has established itself as a momentum to improve NCSoft's performance this year. Jaemin Ahn, a researcher at NH Investment & Securities, explained, "The performance of Lineage 2M greatly exceeds the initial expectations of 936 billion KRW in sales and 2.6 billion KRW daily average this year," adding, "We are raising this year's sales estimate for Lineage 2M to 1.05 trillion KRW and a daily average of 2.8 billion KRW." In the second half of this year, Lineage 2M is expected to expand into Taiwan, Japan, and other markets, anticipating growth in performance.

Com2uS also has a series of new releases scheduled. This year, 'Summoners War: Hundred Years' War,' 'Summoners War: Chronicle,' and 'Heroes War: Counterattack' are set to be launched. In particular, Hundred Years' War and Chronicle are based on existing 'Summoners War' characters and universe, which could lead to additional success in overseas markets. Gamevil aims to return to operating profit this year and is seeking regional expansion of 'Gamevil Pro Baseball.' Expectations are high for the markets in the United States, Taiwan, and Japan, where professional baseball leagues are active.

The spread of COVID-19 has also played a role in the rise of gaming stocks. Changyoung Lee, a researcher at Yuanta Securities, analyzed, "Due to the impact of COVID-19, the population refraining from going outside has increased, raising the possibility of benefiting from this trend."

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