[Click eStock] NCSoft 'Shaken' by Probability Item Regulations... "Sales Impact Will Be Minimal"

Most Probabilistic Items Already Disclose Rates
Top-tier Item Drop Rates Below 0.001% Still Generate Strong Sales
"Opportunity to Buy at Low Prices Ahead of New Release"

Kim Taek-jin, CEO of NCSoft

[Asia Economy Reporter Minwoo Lee] Following the introduction of a bill to strengthen regulations on probability-based items, NCSoft's stock price plummeted more than 6% in a single day. However, since the gaming industry has already disclosed a significant portion of probability-based item information as part of self-regulation and the legalization remains uncertain, there is an analysis that the bill's actual impact on sales may not be significant.

According to the Korea Exchange on the 23rd, NCSoft's stock price closed at 931,000 KRW the previous day, down 6.62% from the day before. This is attributed to increased backlash from the gaming industry after the National Assembly proposed a full amendment to the Game Industry Promotion Act mandating the disclosure of probability-based items.

However, even if the amendment passes, the actual impact on NCSoft's sales may be minimal, leading to an analysis that the stock price decline is excessive. Jaemin Ahn, a researcher at NH Investment & Securities, explained, "Since 2015, a significant portion of probability-based item information has already been disclosed through the gaming industry's self-regulation, and even if item probabilities are further detailed or lowered, it is unlikely that users' frequency of item purchases will significantly decrease. If the law passes, it may negatively affect stock sentiment as regulation would shift from self-regulation to legal enforcement, but the actual sales impact will be minimal."

The controversy over regulating probability-based items is not new. As the introduction of probability-based items became widespread in mobile games in the early 2010s, calls for regulation have been continuously raised. In 2011, during a government audit, concerns were raised that probability-based items promote gambling tendencies. In 2015, a bill to regulate probability-based items was even proposed. However, the industry avoided legalization by agreeing with the government to strengthen self-regulation. NCSoft also publicly discloses the item probabilities for all its games on its website.

Since the disclosed probabilities for probability-based items are already low, additional disclosure is expected to have little impact on sales. Researcher Ahn analyzed, "Currently, users purchase items knowing that the probability of obtaining high-grade items is less than 0.001%. Only a very small number of users have spent hundreds of millions of KRW on item purchases, and the average monthly spending per user is only in the 100,000 KRW range." On the contrary, with a new game release approaching, there is also speculation that this could be an additional buying opportunity. In this context, NH Investment & Securities maintained a 'Buy' rating and a target price of 1,400,000 KRW for NCSoft.

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