Game Stocks' Performance Divided by Overseas Expansion... "Must Target Global Market"

Domestic Game Market Trust Shaken, Underperforming Game Stocks
Krafton and Devsisters Achieve Significant Overseas Success
NCSoft and Pearl Abyss Also Enter Global Market

As confidence in the domestic game market wavers and game stocks continue to underperform, game stocks that have succeeded in overseas expansion are showing an upward trend despite the downturn.

According to the Korea Exchange on the 29th, NCSoft fell by 13.03% in September. NCSoft is a representative game stock with a market capitalization of 12.6016 trillion KRW. Other game stocks such as Netmarble, Kakao Games, Pearl Abyss, Com2uS, Webzen, and Neowiz also dropped by 11.24%, 17.40%, 14.42%, 7.27%, 6.08%, and 18.93% respectively in September alone.

As trust in the domestic game market has been shaken, investor sentiment toward game stocks has weakened. Users have expressed dissatisfaction every year due to the need to obtain items at excessively low probabilities and the growing influence of cash items within games. However, game companies have continued to adopt low probabilities and microtransactions as the core model of their games. NCSoft, Netmarble, and Kakao Games operate similar games based on probability-type items, such as ‘Lineage M’, ‘The Second Country’, and ‘Odin’, respectively.

In this situation, the domestic game market has begun to enter a relatively stagnant phase. The domestic mobile game market size had grown by 10% annually since 2018, but this year’s growth rate is expected to be only about 6.38%. Furthermore, as competitors increase, the revenue generated per game has significantly decreased. In 2017, two MMORPGs (Massively Multiplayer Online Role-Playing Games), Lineage M and Lineage 2: Revolution, ranked high in App Store sales, generating an average annual revenue of 1.03 trillion KRW. However, by 2020, the number of MMORPGs in the top revenue rankings increased to nine, but the average annual revenue dropped to 305.7 billion KRW.

Diverging Game Stocks in Overseas Expansion… NCSoft and Pearl Abyss Also Head to Global Markets

On the other hand, Krafton and Devsisters showed an upward trend. The stock prices of Krafton and Devsisters rose by 1.73% and 121.03%, respectively, in September. In particular, Devsisters’ market capitalization, which was less than 1 trillion KRW at the beginning of this month, exceeded 2 trillion KRW on the 27th.

The common factor between these two stocks is their success in pioneering overseas markets. Krafton’s popular title ‘Battlegrounds’ remains highly popular even four years after its release, recording 377,000 concurrent users on the game platform Steam as of the 25th. ‘Battlegrounds Mobile’, the smartphone version, also ranked first in Apple App Store sales in 38 countries as of the 27th.

Devsisters is also achieving significant results overseas. Devsisters’ flagship game ‘Cookie Run: Kingdom’ ranked first among popular games on the Japanese Apple App Store as of September 6. It also maintained popularity in the United States, ranking sixth in Apple App Store game sales. Notably, the game has attracted market attention in the U.S. despite not conducting full-scale marketing there.

Accordingly, the securities industry emphasizes the need to focus on the future overseas performance of underperforming game stocks. NCSoft is targeting overseas markets with ‘Lineage W’, and Pearl Abyss is preparing to launch ‘Black Desert Mobile’ in China. In particular, NCSoft is actively taking steps to overcome its slump, such as holding the second online showcase for Lineage W on the 30th.

Ahn Jae-min, a researcher at NH Investment & Securities, explained, "The domestic mobile game market is stagnating while competition intensifies, making overseas expansion results even more important. The global game market is larger than the domestic market and offers opportunities for various genres to succeed."

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