Netmarble Reports Increased Loss in Q2 with Operating Loss of 34.7 Billion KRW

[Asia Economy Reporter Seungjin Lee] Netmarble recorded an operating loss in the second quarter following the first quarter.

Netmarble announced on the 11th that its sales in the second quarter of this year reached 660.6 billion KRW, a 14.4% increase compared to the same period last year. The operating loss was 34.7 billion KRW, marking a consecutive quarterly deficit. The net loss was 120.5 billion KRW, continuing the negative trend.

Looking at the cumulative results for the first half of 2022, sales amounted to 1.2921 trillion KRW, a 12.6% increase year-over-year. EBITDA (earnings before interest, taxes, depreciation, and amortization) was 67.2 billion KRW, down 45% compared to the previous year. Operating loss totaled 46.6 billion KRW, and net loss was 172.3 billion KRW.

Operating expenses rose 23.9% year-over-year to 695.3 billion KRW. The increase in operating expenses was largely due to higher personnel and marketing costs. Personnel expenses increased 22.7% year-over-year to 189.7 billion KRW, also rising compared to the previous quarter due to the recruitment of development staff for new titles. Marketing expenses increased 43.8% year-over-year and 28% quarter-over-quarter, driven by multiple new releases including the global launch of The Second World. Commission fees rose 7.1% year-over-year to 260.8 billion KRW.

Overseas sales in the second quarter reached 558.5 billion KRW, accounting for 85% of total sales. Netmarble explained that the sales distribution by region is diversified with North America at 49%, Korea 15%, Europe 12%, Southeast Asia 11%, Japan 8%, and others 5%.

By genre, casual games accounted for 47%, MMORPGs 22%, RPGs 22%, and others 9%. Top-grossing games included The Second World: Cross Worlds at 10%, Marvel Contest of Champions 10%, Cash Frenzy 8%, Jackpot World 8%, Ratcher Slots 8%, and The Seven Deadly Sins: Grand Cross 7%.

Netmarble stated, “Although the global release of The Second World: Cross Worlds and Merge Kungya Island at the end of the second quarter contributed little to second-quarter sales, we expect performance improvement in the third quarter due to the full reflection of sales from new releases in the second quarter and the launch effect of Seven Knights Revolution.”

Netmarble aims to release a total of six new titles within the year, including three blockchain-based new games: Everyone's Marble: Meta World, Monster Arena Ultimate Battle, and King of Fighters: Arena, as well as Overprime (early access), BTS Dream: TinyTAN House, and Charlotte's Table.

Netmarble CEO Young-sik Kwon said, “The release of anticipated new titles was delayed, and the performance of new titles launched in the first half fell short of expectations, resulting in two consecutive quarters of poor results. However, Seven Knights Revolution, launched at the end of July, has stably settled in the market, and the development progress of various games based on our own IP is smooth, so we expect gradual performance improvement going forward.”

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