[Click eStock] "NC, Intensified New Game Competition... Lineage Revenue Expected to Decline"

Daishin Securities Report
Target Price Lowered to 380,000 Won

Daishin Securities maintained a buy rating on NCSoft on the 19th and set a target price of 380,000 KRW, down 11.6% from the previous target. This reflects an analysis that sales are expected to decline due to new releases from competitors.

The company's sales for the second quarter are expected to be 464.8 billion KRW, with an operating profit of 38.9 billion KRW. These figures represent a decline of 26% and 68%, respectively, compared to the same period last year. Lee Ji-eun, a researcher at Daishin Securities, stated, “Due to the impact of new releases from competing game companies, a decrease in traffic and sales for the company’s lineup is inevitable,” adding, “Despite the 6th anniversary update of Lineage M in the second quarter, the seasonal effect is expected to be weak.” The estimated daily average sales for Lineage M, 2M, and W in the second quarter are 1.4 billion KRW, 700 million KRW, and 1.2 billion KRW, respectively.

Marketing expenses are estimated to have increased by 618% from the previous quarter to 34.9 billion KRW. This is due to content updates for the existing lineup and pre-marketing related to new releases. Researcher Lee Ji-eun explained, “Marketing expenses will continue to increase until the new release is launched.”

The company’s stock price has been declining following negative feedback from participants during the closed beta test (CBT) period of the new release TL conducted last month. Considering that Lineage 2M and W showed strong initial success after launch despite negative feedback prior to release, the momentum for TL is still considered valid.

However, researcher Lee Ji-eun advised, “Nevertheless, the exact release schedule for the new title has not yet been confirmed,” and added, “Since competition among new releases is expected to intensify in the second half of the year, it is advisable to monitor the company’s short-term performance before the launch of TL.”

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