[Click eStock] NC's Strong 4Q Performance... Will Growth Continue Next Year?

4Q Lineage W Revenue Hits 320 Billion
Expectations for 'Emperor Stock' Recovery with New P2E Games and Project TL Success Next Year

[Asia Economy Reporter Minwoo Lee] NCSoft is expected to achieve solid results in the fourth quarter of this year, driven by the success of Lineage W. Depending on the sustained popularity of Lineage W, the success of new releases, and the development and launch of 'play-to-earn (P2E)' games, there is a forecast that NCSoft could reclaim its status as a 'Hwangjeju (stocks priced over 1 million KRW per share)' next year.

On the 22nd, Eugene Investment & Securities projected that NCSoft would record consolidated sales of 778.7 billion KRW and operating profit of 199.3 billion KRW in the fourth quarter of this year. These figures represent increases of 38.7% and 27.2%, respectively, compared to the same period last year. Although these numbers fall short of the market consensus?sales of 821.3 billion KRW and operating profit of 237.3 billion KRW?by 5.2% and 16.0%, respectively, they mark significant growth compared to the quarterly sales of around 500 billion KRW seen earlier this year. Operating profit is also estimated to nearly double compared to 56.7 billion KRW in Q1, 112.8 billion KRW in Q2, and 96.3 billion KRW in Q3.

The success of Lineage W, which was released on the 4th of last month, played a crucial role. The average daily sales during the first week after launch reached 12 billion KRW. The number of servers increased from 108 at launch to 192. The estimated average daily sales of Lineage W in the fourth quarter is 5.6 billion KRW, amounting to approximately 320 billion KRW in sales for the quarter alone. However, it is inevitable that this will cannibalize sales from existing Lineage games. Operating expenses are also expected to rise somewhat due to increased commission fees from sales growth, higher marketing costs from promotions following the Lineage W launch, and performance bonuses for Lineage W developers.

NCSoft, which had been struggling with a sluggish stock price since the beginning of the year, is now seen to be at a turning point thanks to the success of Lineage W. Analysts suggest that sustaining the popularity of Lineage W, stabilizing sales of existing games, the success of new releases, and the development and launch of P2E games will be key factors for a stock price rebound next year. Earlier this month, NCSoft announced various content plans through the Lineage W Director's Preview event. However, it remains uncertain whether the game will achieve success in the secondary markets such as the US and Europe next year. The new release event scheduled for the first quarter of next year will unveil blueprints for new titles including 'Project TL' and P2E games.

Jeehoon Jung, a researcher at Eugene Investment & Securities, explained, "NCSoft recently completed internal testing of Project TL successfully and has stated that the P2E game is targeted for release next year. If these immediate challenges are successfully met, there is ample potential for further stock price increases." Against this backdrop, Eugene Investment & Securities maintained its 'Buy' rating and a target price of 1 million KRW for NCSoft. The closing price the previous day was 663,000 KRW.

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