NC Nexon is coming out... When will Netmarble?

Struggling to Break Free from the 140,000 Won Range
NC Crowned 'Emperor Stock,' Hits All-Time High Amid Contrasting Nexon Mood
Investor Sentiment Fades Due to 'Seven Knights 2' and Other New Titles' Poor Performance

[Asia Economy Reporter Minwoo Lee] Netmarble's stock price has been struggling to rebound. This contrasts with the upward trends seen in NCSoft and Nexon, also considered part of the gaming industry's 'Big 3.' The weak performance of new releases combined with declining sales of existing titles is evaluated as the reason for the lack of upward momentum.

On the 10th, Netmarble's stock opened at 137,000 KRW, up 0.37% from the previous day. Since recording 142,500 KRW earlier this month, it has struggled to break above the 140,000 KRW level. After a 9.87% drop on October 15 last year, falling into the 130,000 KRW range, it further declined to 117,000 KRW by October 30. Since then, it has only risen 11.6% up to the day before. This contrasts with the KOSPI index, which stabilized from the 2200s to the 3000s during the same period.

The atmosphere is also different compared to NCSoft and Nexon, the other members of the industry's 'Big 3.' NCSoft's stock rose 29.6% from 776,000 KRW on October 30 last year to 1,006,000 KRW the day before. On the 3rd, it surpassed a closing price of 1 million KRW for the first time, solidifying its status as a 'blue-chip' stock. Nexon, listed on the Tokyo Stock Exchange in Japan, is also on an upward trend. It surpassed 3,500 yen for the first time ever the day before and has been steadily climbing since March last year.

Although early investments in companies like Kakao Games and Big Hit Entertainment, which attracted record-breaking funds during last year's IPOs, yielded results, the core gaming business is struggling, leading to waning investor interest.

SK Securities forecasts that Netmarble will record consolidated sales of 670.8 billion KRW and operating profit of 81.4 billion KRW in the fourth quarter of last year. These figures represent increases of 20.9% and 59.2% year-over-year, respectively, but are estimated to fall short of market expectations by 1.1% and 5.4%. The flagship new release 'Seven Knights 2,' launched in November last year, is performing well, maintaining a top position in sales rankings with an expected daily revenue of 1 billion KRW. However, other new titles such as 'Seven Knights Time Wonderer,' 'Marvel Realm of Champions,' and the global version of 'A3: Still Alive' are all underperforming. There are also concerns about declining sales of existing titles like 'The Seven Deadly Sins' and 'Lineage 2 Revolution.' Following Hi Investment & Securities and Samsung Securities last month, SK Securities issued a 'neutral' investment rating on the 4th based on these factors.

Although earnings growth is expected this year, concerns about overvaluation remain. Jinman Lee, a researcher at SK Securities, explained, "With overseas releases of 'Blade & Soul Revolution,' and new titles such as 'The Second Country' and 'Seven Knights Revolution,' operating profit is expected to increase by about 50% compared to last year. Additionally, equity-method investments in Big Hit and Coway are continuing to perform well, improving net income. Nevertheless, considering the current stock price at about 35 times the expected earnings per share (EPS) for this year and the fundamentals, the upside potential is limited."

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