[Click eStock] NCSoft Stalls, Will Accelerate Starting Next Year

Lineage M and Lineage 2M Sales Slow Down
Effect of New Releases Like Blade & Soul 2 Expected from Next Year If Launched at Year-End

[Asia Economy Reporter Minwoo Lee] Despite various game updates, NCSoft's fourth-quarter sales are expected to decrease by about 20% compared to the previous quarter. Assuming the overseas launch of Lineage 2M and the year-end release of the new title Blade & Soul 2, performance improvement is expected to begin from the first quarter of next year.

On the 28th, KTB Investment & Securities maintained a 'Buy' rating on NCSoft but lowered the target price by 10%, from 1.2 million KRW to 1.08 million KRW. This decision was based on the expectation that the period to see the effects of new releases such as Aion 2 and Blade & Soul 2 could be delayed amid declining domestic sales of Lineage 2M. It is analyzed that the fourth quarter may be somewhat subdued.

NCSoft's third-quarter sales this year are forecasted at 583 billion KRW, with an operating profit of 213.3 billion KRW. This represents an increase of 46.6% in sales and 65.5% in operating profit compared to the same period last year. However, compared to the previous quarter, operating profit increased by only 2.1%. The fourth quarter operating profit is expected to decrease by 20.8% from the third quarter to 168.9 billion KRW. Researcher Kim explained, "This is due to the stabilization of mobile game sales decline and increased marketing expenses," adding, "Marketing expenses reflect an increase of 11.2 billion KRW from the previous quarter to 35.1 billion KRW, due to marketing for new titles like Fuser and strengthened promotions for existing live games."

Meanwhile, Lineage M's average daily sales in the third quarter are expected to increase by 45% from the previous quarter to 2.5 billion KRW, driven by the effectiveness of the 3rd anniversary update. However, from the fourth quarter, this effect is expected to diminish, with average daily sales forecasted to decrease by 10% from the previous quarter to 2.3 billion KRW. Lineage 2M showed a slowdown starting in the third quarter, with average daily sales expected to decline by 17.5% from the previous quarter to 1.8 billion KRW. Kim Jingu, a researcher at KTB Investment & Securities, explained, "Although major updates continued monthly since the end of June, the sales increase effect was limited," adding, "An additional 1st anniversary update is expected around the end of November, but considering the overall trend, fourth-quarter average daily sales are expected to decrease by 10% from the previous quarter to 1.6 billion KRW."

Assuming the launch of Lineage 2M in Taiwan and the domestic year-end release of Blade & Soul 2, significant performance effects are expected to begin from the first quarter of next year. Accordingly, the combined domestic and overseas average daily sales of Lineage 2M next year are expected to reach 2.5 billion KRW.

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