NC Faces Crisis in 1Q Earnings Due to Boycott... Expected to Halve Compared to Last Year

1Q Operating Profit Expected at 100 Billion KRW... Forecasted 60% Sharp Decline YoY
LineageM Boycott, Lineage2M Poor Performance in Japan and Other Adverse Factors
Only 'Blade & Soul 2' to Rely On... Will It Be the Sole Support This Year?

[Asia Economy Reporter Minwoo Lee] NCSoft's first-quarter performance this year is expected to be significantly weak. This is analyzed to be due to a decrease in Lineage M sales caused by a boycott movement, as well as the underwhelming performance of Lineage 2M's launch in Japan.

On the 11th, DB Financial Investment forecasted that NCSoft would record consolidated sales of 524.4 billion KRW and operating profit of 100 billion KRW in the first quarter of this year. Compared to the same period last year, sales are down 28% and operating profit down 59%. This is also far below the market consensus forecast of 563.5 billion KRW in sales and 151.3 billion KRW in operating profit. Compared to the previous quarter, both sales and operating profit sharply declined by 7% and 36%, respectively.

Both flagship titles, Lineage 2M and Lineage M, performed poorly. Due to the expiration of update effects, Lineage 2M's sales are expected to decrease by about 10% compared to the previous quarter (assuming daily domestic sales of 1.6 billion KRW). Additionally, the performance of the Japan launch is also expected to fall short of expectations. Lineage M, which faced a boycott movement, also showed poor results. Based on an assumed daily sales of 2 billion KRW, sales are estimated to have decreased by 11% compared to the previous quarter.

According to big data platform company IGAWorks, the monthly active users (MAU) of 'Lineage M' on Android last month were recorded at 187,822. This is about a 25% decrease compared to 233,937 two months prior. Compared to the usual MAU level of 200,000 to 300,000, this is a significant drop. Lineage 2M also saw a decrease of about 11% in users last month, with 85,053 users compared to the previous month.

Considering that both games are not affected by seasonal factors, it is evaluated that the recent boycott movement by users had a major impact. Earlier, on January 27, NCSoft implemented an update to Lineage M's main monetization element, 'Patterns,' allowing completion with low spending. This led to backlash from users who had previously spent large amounts, resulting in the update being canceled and reverted within four days. Subsequently, users who spent money during the update period demanded refunds and protested. When NCSoft compensated with in-game currency, users reacted even more strongly, escalating the boycott movement and truck protests.

Meanwhile, increased costs were also cited as a cause of poor performance. Representative factors include an approximately 30 billion KRW special bonus payment and a salary increase (about 12 billion KRW), leading to higher labor costs. Additionally, marketing expenses related to the overseas launch of Lineage 2M and the release of Blade & Soul 2 are believed to have had an impact.

The hope lies in the massively multiplayer online role-playing game (MMORPG) Blade & Soul 2, scheduled for release next month. As this year's most anticipated title, various promotions are underway, including the start of pre-character creation on the 22nd. As a sequel to the previously successful intellectual property (IP) Blade & Soul, its initial success and mid-term performance are expected to be key to improving NCSoft's performance this year.

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