Wemade Turns to Deficit... Jang Hyun-guk: "Deficit Due to Investment... Profit Turnaround in Q1"

[Asia Economy Reporter Seungjin Lee] Jang Hyun-guk, CEO of Wemade, apologized for the performance turning to a loss last year. However, he expressed confidence in turning a profit in the first quarter of this year, attributing last year's loss to investments.

On the 15th, during the earnings conference call, Jang Hyun-guk stated, "I apologize for everything that happened last year and also for the poor financial results."

"We will turn a profit in the first quarter of this year"

Wemade posted a loss last year. The company recorded sales of 458.6 billion KRW, an operating loss of 80.5 billion KRW, and a net loss of 123.8 billion KRW. Operating profit showed losses for three consecutive quarters starting from the second quarter of last year.

CEO Jang explained, "Most of the losses are not due to inefficiency in existing businesses but rather due to investments in new businesses," adding, "It is natural to have a time gap between investment and results."

He continued, "Some may question whether the investments are excessive, but what matters is the potential of the industry we are investing in and whether the level of investment is something we can bear. MirM is showing good results. If things go well, we expect to turn a profit in the first quarter of this year, possibly as soon as next month on a monthly basis."

However, it seems difficult to meet the goal of onboarding 100 games to WEMIX within the first quarter. CEO Jang said, "The reason we set the goal of onboarding 100 games on WEMIX both internally and externally was because the quantitative aspect was important for platform advancement. It seems unlikely that we will reach the number 100 by the end of the first quarter."

He added, "However, during this process, we have established a new brand called WEMIX Play and made various advancements such as backend systems. The recently launched MirM is performing well with an advanced economy system. Rather than focusing on the number of games, our goal is to activate the entire platform. There is no specific target for the number of games this year."

He also revealed plans for the Chinese market. Wemade is currently preparing to enter China with ‘MirM’ and ‘Mir4’.

CEO Jang stated, "The process of obtaining game licenses (panho) in the Chinese market is very sensitive. At this point, I cannot say it is underway." He added, "Considering the importance of IP in the Chinese market, we expect that games with strong Mir IP will achieve great success. Once publishing contracts are signed, licenses are issued, and service schedules are confirmed, we plan to announce them sequentially within this year."

"Once cryptocurrency accounting standards are established, it will lead to shareholder value"

CEO Jang also addressed the issue that related revenues are not reflected in the financial results due to the lack of established accounting standards for cryptocurrencies.

He said, "Currently, the economic activities of our blockchain businesses are not accurately recorded because accounting standards have not been established. Since the government has announced plans to establish accounting standards, this is only temporary."

He emphasized, "Just because records were not kept in the past does not mean assets disappear. Once accounting standards are established, everything will be recorded at once, so business performance will not fail to translate into shareholder value or disappear somewhere."

Wemade included and then excluded revenue from selling its own cryptocurrency 'WEMIX' in 2021 because accounting standards for cryptocurrencies were not established. Accordingly, all revenues related to game tokens from MirM sales last year were excluded.

This year, Wemade plans to focus its capabilities on ▲ expanding onboarding of WEMIX Play games ▲ preparing for Chinese service of Mir4 and MirM ▲ investing in and collaborating with domestic and international blockchain specialized companies ▲ diversifying platform services based on WEMIX 3.0.

Meanwhile, Wemade Max recorded annual sales of approximately 86 billion KRW, a 142% increase from the previous year, and an operating profit of about 25 billion KRW last year. The fourth quarter results were approximately 18.2 billion KRW in sales and about 1.6 billion KRW in operating profit.

Wemade Play's sales last year increased by about 27% compared to the previous year, reaching 134 billion KRW. Operating profit was 750 million KRW, and net profit was 90 million KRW.

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