Neowiz Faces Decline in Performance Due to Web Board Game Slump... Needs Hit New Releases

by Jang Hyowon

Published 14 Nov.2021 11:41(KST)

Updated 24 Jul.2023 19:51(KST)

open/close

[Asia Economy Reporter Jang Hyowon] Samsung Securities analyzed on the 14th that the success of new releases is the key to the stock price rebound of Neowiz. The target stock price was lowered by 27.7% from the existing 47,000 KRW to 34,000 KRW, reflecting the poor performance of the game 'Bless Unleashed.'

On the 12th, Neowiz announced that its consolidated sales for the third quarter of this year reached 61.7 billion KRW, operating loss was 1.4 billion KRW, and net profit was 8.6 billion KRW. Compared to the same period last year, sales decreased by 17.3% and net profit by 40%.

Operating losses were recorded due to a decrease in high-margin web board game sales and increased marketing costs for new releases. This significantly underperformed the existing market consensus of 13.3 billion KRW operating profit.

Samsung Securities researcher Oh Donghwan stated in the report, “Web board game sales have declined in traffic and revenue since the second quarter due to the application of an enhanced gambling prevention system. However, traffic has been rebounding since October, and with the peak season effect expected, sales rebound is possible in the fourth quarter.”

Additionally, Neowiz’s preparation of multiple new releases and blockchain-based P2E games is expected to act as a factor for valuation increase.

Researcher Oh said, “Neowiz is preparing to release multiple Steam publishing games, so a rebound in game sales is possible. Also, they are preparing P2E games in collaboration with affiliate Neoply, and since this is receiving high market interest, if the plans become visible, it is expected to be a factor for valuation increase.”

Furthermore, he forecasted, “Although adjustment of growth expectations is necessary due to the poor performance of anticipated titles, since many new releases and P2E game launches are scheduled for next year, a stock price increase due to the success of new releases is considered sufficiently possible.”