4Q Slump NC Aims to Reclaim Emperor Stock Status Next Year

4Q Earnings Consensus Expected to Fall Short
Lineage W Hits Big but Costs Also Rise
Anticipation for New Releases and NFT·P2E Adoption Next Year

Exterior view of NCSoft Pangyo headquarters

[Asia Economy Reporter Minwoo Lee] NCSoft, once known as a "Hwangjejeu" (emperor stock) with a stock price exceeding 1 million KRW, is expected to post earnings below market expectations again in the fourth quarter of this year. Although Lineage W, which was embroiled in various controversies, succeeded in gaining popularity, profitability did not improve due to increased costs.

According to the industry on the 10th, Shinhan Financial Investment forecasted that NCSoft would achieve sales of 785.6 billion KRW and operating profit of 222.3 billion KRW in the fourth quarter of this year. These figures are 3.4% and 4.9% below the market consensus of 813.4 billion KRW in sales and 233.8 billion KRW in operating profit, respectively, as compiled by financial information analysis firm FnGuide. IBK Investment & Securities also projected sales to be 2.3% and operating profit to be 5.9% below consensus.

Although Lineage W is on a successful run, the overall increase in costs is seen as the cause. Lee Seunghoon, a researcher at IBK Investment & Securities, explained, "Marketing expenses are expected to more than double compared to the previous quarter due to increased promotional events for Lineage W and existing games," adding, "Personnel increases and year-end baseball team contract issues are also expected to raise labor and other costs."

Substantial earnings improvement is expected to begin next year. Lineage W is set to be released in North America and Europe, and through various content updates, it is anticipated that existing sales levels can be maintained. There is also significant anticipation for the application of a 'play-to-earn' business model through the introduction of blockchain-based non-fungible tokens (NFTs), a hot topic in the gaming industry recently. NCSoft emphasized "asset value preservation" at its 'Directors Preview' event held the day before. The company aims to create an in-game economic structure that prioritizes the asset value of users within the game. Shinhan Financial Investment researcher Lee Moonjong explained, "If the in-game economic ecosystem built since the PC Lineage era continues in new titles, expectations for NFT and P2E games could expand."

Accordingly, securities firms have set target stock prices above 1 million KRW. The last time NCSoft was a "Hwangjejeu" with a stock price exceeding 1 million KRW was on February 18. As of 11:13 AM on that day, the stock price was recorded at 734,000 KRW.

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