NC's Operating Profit Halved... Aiming for Turnaround This Year with NFT and New Releases (Comprehensive)

[Asia Economy Reporter Kang Nahum] Despite the success of Lineage W last year, NCSoft reported a disappointing performance with operating profit more than halved compared to the previous year. NCSoft plans to target the global market this year with non-fungible token (NFT) technology and new titles across various genres.

NCSoft announced on the 15th that its consolidated revenue last year was 2.3088 trillion KRW, with an operating profit of 375.2 billion KRW. These figures represent decreases of 4% and 55%, respectively, compared to the previous year.

In the fourth quarter of last year, revenue rose 35% year-on-year to 757.2 billion KRW, while operating profit fell 30% to 109.5 billion KRW.

NCSoft explained that the decline in operating profit was due to increased operating expenses such as marketing and labor costs. Marketing expenses increased 122% year-on-year to 282.6 billion KRW due to intensified marketing activities for new releases. Labor costs rose 18% year-on-year to 849.5 billion KRW due to workforce expansion and performance rewards for new games.

Looking at annual revenue by region, South Korea accounted for 1.5752 trillion KRW, Asia 447 billion KRW, and North America and Europe 114.3 billion KRW. Royalty revenue was 172.4 billion KRW.

Annual revenue by product showed mobile games generating 1.6105 trillion KRW. Specifically, Lineage M earned 545.9 billion KRW, Lineage 2M 652.6 billion KRW, Blade & Soul 254.4 billion KRW, and Lineage W 357.6 billion KRW.

PC online game revenue included Lineage at 134.1 billion KRW, Lineage 2 at 99.7 billion KRW, Aion at 74.9 billion KRW, Blade & Soul at 43.6 billion KRW, and Guild Wars 2 at 73.7 billion KRW.

NCSoft aims to turn things around this year by integrating blockchain and NFT technology into its games. Hong Wonjun, NCSoft’s Chief Financial Officer (CFO), stated during the earnings conference call that "preparations to apply NFT technology to our games are progressing smoothly."

He added, "We consider it very important that the in-game economic system itself is highly sophisticated and stably maintained, as this is the most crucial prerequisite for applying NFT or blockchain technology. Our company firmly believes that blockchain technology must provide new value to game users that has never existed before."

The company is also actively pursuing global expansion. Previously, NCSoft released teaser videos for five new IPs consisting of TL, Project E, and Project M. These games cover various genres including massively multiplayer online role-playing games (MMORPG), interactive movies, action battle royale, and collectible role-playing games (RPGs). These titles are targeted at the global market.

CFO Hong said, "We fully recognize that relying solely on the domestic market limits the continuous enhancement of the company’s value, so our top strategic priority is to leap forward as a global game company." He added, "While maintaining our strengths in MMORPGs, we plan to diversify by betting on various genres."

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