KOSPI Hits Record High... Large Game Stocks Underperform

NCSoft, Netmarble, and Others Continue to Struggle
Attention Needed on Small and Mid-Cap Game Stocks with Many Upcoming New Releases

Kim Taek-jin, CEO of NCSoft

[Asia Economy Reporter Minwoo Lee] While the KOSPI continues to hit record highs day after day, the stock prices of major domestic game companies such as NCSoft and Netmarble are showing sluggish performance. In the case of NCSoft, negative factors are piling up, including the possibility of delays in the release schedule of new titles. Netmarble's stock price has also faltered following the disappearance of positive momentum after the release of new games.

At around 9:23 a.m. on the 24th, the KOSPI recorded 3,289.24, up 0.40% from the previous day, setting a new all-time high. This marks the eighth trading day of record highs, leaving only about 100 points to reach 3,300.

On the other hand, large game stocks have not been able to avoid sluggishness. NCSoft, the largest domestic game company by market capitalization, has seen its stock price fall more than 5% since the beginning of this month until the previous day. This contrasts with the KOSPI’s 2% rise during the same period. Since closing at 872,000 KRW on the 1st, it has struggled to surpass the low 800,000 KRW range. On the 22nd, it even dropped to 811,000 KRW during intraday trading. Various negative factors concentrated in the first half of the year have kept the stock price on a downward trajectory since the beginning of the year.

The delay in the release of this year’s most anticipated title, ‘Blade & Soul 2,’ has recently acted as a negative factor. Originally scheduled for release this month, the release date has not yet been announced, effectively pushing it to the second half of the year. During the pre-registration period that began in February, expectations were high with 4 million people signing up, but repeated delays in the release schedule have recently led to disappointing sell-offs. The stock price fell about 5.4% over six trading days from the 14th to the 22nd. Sung Jong-hwa, a researcher at Ebest Investment & Securities, explained, "A series of negative factors such as the legislation on probability disclosure for randomized items, poor overseas performance of Lineage 2M, and boycott movements have concentrated, causing the stock price, which surpassed 1 million KRW in February, to fall to the 800,000 KRW range."

Netmarble’s stock price continues to struggle as well. Following the release of the highly anticipated new game ‘The Second Country,’ profit-taking sell-offs have emerged as the positive momentum faded. The stock price, which had dropped to 125,500 KRW on the 4th of last month, rose to 144,500 KRW on the release day of ‘The Second Country’ on the 10th, but has since sharply declined. It fell about 10% from that day to the previous day. On the 15th alone, it plunged 4.96%, marking the largest single-day drop since January 11th’s -5.02%. Nexon, listed on the Tokyo Stock Exchange, also showed a similar trend, falling about 4% this month until the previous day.

Some analysts suggest focusing on small and mid-sized game companies with strong upward momentum. Kakao Games, the ‘leader’ of the game sector in the KOSDAQ market, is considered the stock with the richest growth potential this year. Anticipation is growing for ‘Odin,’ which will be released on the 29th, and ‘Uma Musume,’ scheduled for release in the second half of the year. The PC MMORPG ‘Elyon,’ released in December last year, is also steadily generating earnings. It is scheduled to be released in North America and Europe in the fourth quarter of this year. In addition, Kakao Games is preparing about ten new titles for release this year.

Neowiz is also regarded as a ‘dark horse.’ The most anticipated title is ‘Bless Unleashed,’ which will be released on the overseas PC platform ‘Steam’ in August. Other titles such as ‘Blade Assault’ and ‘Unsouled’ are also planned. Kim Hyun-yong, a researcher at Hyundai Motor Securities, explained, "Based on a solid cash-generating source from web board games, Neowiz is pursuing stable growth by increasing new titles utilizing existing intellectual property (IP) and publishing through its Japanese subsidiary." He added, "A price-to-earnings ratio (PER) below 10 and a strong cash-generating base increase its investment attractiveness."

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