Game Industry Faces Poor 3Q Performance... "Relying on New Releases, Heading to Busan G-Star"

Wemade Turns to Deficit, Kakao Games Also Posts Weak Q3 Operating Profit
Netmarble Heads to Busan with New Release... Gamescom Triple Winner 'P-ui Geojit' Anticipated
Nexon Attends G-Star for First Time in 4 Years, Largest Scale with 300 Booths

[Asia Economy Reporter Lee Seung-jin] The gaming industry’s outlook for the third quarter is bleak. Due to the impact of COVID-19, major new releases have not been launched for an extended period, and existing game revenues have fallen more sharply than expected, resulting in poor performance. With stock prices failing to recover, the gaming industry plans to showcase major new titles at the international game exhibition ‘G-STAR 2022’ held in November to boost second-half sales and raise expectations for new releases.

Third Quarter Results Fall Short One After Another

According to the gaming industry on the 27th, Wemade recorded losses for the second consecutive quarter. Its third-quarter revenue was 108.3 billion KRW, a 71% increase compared to the same period last year, but it posted an operating loss of 28 billion KRW. This was due to a significant increase in operating expenses compared to the previous year.

Most game companies expected to announce third-quarter results are anticipated to report poor performance. Netmarble is projected to record 694.6 billion KRW in revenue and an operating profit of 400 million KRW in the third quarter. This represents a 14.4% increase in revenue but a 99% plunge in operating profit. Having recorded operating losses in the first and second quarters this year, many securities analysts have speculated that Netmarble may also report an operating loss in the third quarter.

Kakao Games, which posted record-high results in the second quarter, is expected to see growth slow in the third quarter. Revenue is projected at 356.1 billion KRW, and operating profit at 71.1 billion KRW, representing a 23.6% decrease in revenue but a 66.5% increase in operating profit compared to the same period last year. Due to declining revenues from major games, the company is expected to fall short of market expectations.

In addition, major game companies such as NCSoft, Krafton, and Com2uS are also expected to report results below market forecasts. Many companies have not announced major new releases, and the new titles that have been launched have underperformed initial expectations, leading to continued cost pressures.

The gaming industry’s attention is focused on the international game exhibition ‘G-STAR 2022’ held next month in Busan. As G-STAR is being held normally for the first time in three years due to COVID-19, it is attracting significant interest from numerous gamers and domestic and international developers. The gaming industry plans to showcase major new titles at G-STAR to stage a turnaround.

Gaming Industry Gathers at ‘G-STAR’ with Blockbusters

At the G-STAR 2022 BTC hall, major participants including main sponsor Wemade, Neowiz, Nexon Korea, Netmarble, Level Infinite, Kakao Games, and Krafton will set up booths.

Wemade, participating with 200 booths, plans to promote its new blockchain business during G-STAR and unveil new MMORPGs ‘Legend of Mir’ and ‘Night Claw (working title).’ Notably, ‘Legend of Mir’ is being developed as a global one-build incorporating Wemade’s blockchain technology.

Netmarble will showcase four new titles at G-STAR, including ‘Solo Leveling: Arise,’ ‘Arthdal Chronicles,’ ‘Paragon: The Overprime,’ and ‘Hype Squad.’ The Netmarble booth will be 100 booths in size, featuring over 160 demo stations and an open stage. Kakao Games will present three new games: ‘Goddess Order,’ ‘Ares: Rise of Guardians,’ and ‘Eversoul.’ These new titles are expected to be key contributors to Kakao Games’ overall performance next year.

Neowiz, participating with 100 booths including an outdoor plaza, will exclusively showcase ‘P’s Lie,’ which recently won three awards at the European game exhibition Gamescom, drawing considerable attention.

Nexon, the ‘big brother’ of the gaming industry who did not participate last year, will join G-STAR this year. This marks Nexon’s first offline interaction with users since ‘G-STAR 2018,’ four years ago. Nexon will participate with the largest scale of 300 booths and plans to showcase key upcoming titles. Krafton is also expected to introduce its upcoming titles along with its self-developed virtual human ‘Anna.’

Meanwhile, G-STAR 2022 will be held for four days from November 17 to 20 at BEXCO in Busan. Unlike previous years, the G-STAR 2022 BTC hall will be expanded beyond the existing BEXCO Exhibition Hall 1 to include the third floor of Exhibition Hall 2, offering a wider variety of attractions.

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