Wemade Reports 33.3 Billion KRW Operating Loss in Q2... Operating Expenses Including Labor Costs Cause Bleeding

Jang Hyun-guk, CEO of Wemade, is being interviewed on the 3rd at Wemade headquarters in Seongnam, Gyeonggi Province. / Seongnam = Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kang Nahum] Wemade posted a loss in the second quarter of this year. Increased labor costs due to new hires and marketing expenses for new releases are cited as the reasons for the poor performance.

Wemade announced on the 27th that it recorded an operating loss of 33.3 billion KRW on a consolidated basis in the second quarter of this year, turning to a deficit. Sales during the same period reached 109 billion KRW, up 58.2% compared to the same period last year. Net profit turned to a loss of 31.6 billion KRW.

The increase in operating expenses dealt a heavy blow. In particular, labor costs amounted to 56.2 billion KRW, which is a 244% increase from 16.4 billion KRW recorded in the same period last year. Wemade explained, "Second quarter sales decreased compared to the previous quarter due to stabilization of existing game sales," and added, "Operating profit turned to a loss compared to the previous quarter and the previous year due to increased operating expenses such as labor costs from workforce expansion and advertising expenses related to new releases."

However, the investment sector achieved remarkable results. Last month, Wemade sold part of its stake in Lionheart Studio, the developer of 'Odin: Valhalla Rising,' earning approximately 118.7 billion KRW in revenue. Strategic investments in ALTAVA and FANC also showed visible investment outcomes as their tokens were listed on domestic and international exchanges.

Jang Hyun-guk, CEO of Wemade, said at the earnings conference call, "Wemade invested as aggressively as possible to the extent of enduring external investments for talent investment and ecosystem expansion, but net cash flow recorded a positive figure," adding, "Overall cash is expected to increase this year."

He emphasized, "It takes time for investments to yield results and for those results to be reflected in accounting figures. This is especially true when cryptocurrency accounting treatment is not yet established," and added, "It is impossible to evaluate solely by the income statement; performance should be judged by how faithfully the strategy is implemented and the vision realized."

Wemade plans to integrate blockchain systems into the new release Mir M in the second half of the year and launch global services. It will also actively build a blockchain ecosystem centered on WEMIX 3.0 and focus more on the economic connection of games through the 'inter-game economy' and its expansion into the real economy.

CEO Jang said, "Now is the time when all blockchain coins must prove their utility. WEMIX has already proven its usefulness through games, so we will lead the market with even more aggressive moves," adding, "We will refine the currently tested WEMIX 3.0 to build a more open blockchain ecosystem and become a unique global platform."

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