[Click eStock] "Netmarble, Success of Seven Knights Revolution in Second Half is Key"

IBK Investment & Securities Report

[Asia Economy Reporter Minji Lee] IBK Investment & Securities maintained a buy rating on Netmarble on the 20th but lowered the target price by 35% to 90,000 KRW. This adjustment was due to the company's performance falling short of market expectations in the first half of the year.

Netmarble is expected to record sales of 663.9 billion KRW in the second quarter, representing a 15% increase compared to the same period last year. However, operating profit is predicted to plummet by 96.3% to 600 million KRW during the same period. This is attributed to minimal revenue contribution from new games and a rapid decline in sales from existing games.

'The Second Country,' which was globally released in May, saw a rapid decline in sales after failing to maintain its initial performance. Although it attracted attention by including a P2E ecosystem, various blockchain systems were still insufficient, such as the exclusion of NFTs. Other new games like 'Merge Kungya Island' were also released but showed minimal results. IBK Investment & Securities analyst Seunghoon Lee stated, “Marketing expenses likely increased compared to the previous quarter due to the advance spending on multiple new game releases,” adding, “Labor costs have also continuously risen, so operating profit probably did not meet market expectations.”

From the third quarter onward, many anticipated new titles will be launched. More than seven new games, including 'Seven Knights Revolution,' 'Overprime,' 'Monster Taming Arena,' and 'Modoo Marble Metaworld,' are scheduled for release within this year.

Among these, the success of Seven Knights is crucial. As it is an in-house IP, expectations for its success are high. If it succeeds, it will prove the competitiveness of the company's own IP and development capabilities, while a decrease in payment commission rates is expected to lead to a sharp improvement in performance. Additionally, the success of several new games combining popular in-house IPs with blockchain-based P2E is also worth noting.

Analyst Seunghoon Lee explained, “In the short term, the success of Seven Knights Revolution and, in the mid to long term, blockchain-based P2E games will be turning points for the company's value.”

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