NCSoft "Sale of Old Samsung-dong Office Building... Monetizing Purple"

Co-CEO Park Byung-moo Announces Measures to Overcome Earnings Decline in Conference Call

Byung-moo Park, co-CEO of NCSoft, made a surprise announcement that the company will sell its old headquarters in Samseong-dong, Gangnam-gu, Seoul, as a measure to overcome deteriorating earnings. This decision came after much deliberation amid worsening business conditions.

At the Q1 earnings conference call held on the 10th, co-CEO Park stated, "We plan to sell the NC Tower in Samseong-dong within this year to cover the construction costs of the new headquarters," adding, "Following further review, we will also liquidate assets related to the current Pangyo R&D Center to prevent any further increase in real estate assets."

NCSoft is constructing a new headquarters near the existing Pangyo R&D Center, located at 641 Sampyeong-dong, Bundang-gu, Seongnam-si, Gyeonggi Province, through a consortium. This strategy appears to have been adopted in response to worsening performance, with Q1 sales dropping 17% year-on-year to 397.9 billion KRW and operating profit plummeting 68% to 25.7 billion KRW.

The land acquisition cost for the new headquarters is approximately 430 billion KRW, with completion targeted for 2027. Additionally, construction costs are expected to amount to 580 billion KRW. Although the combined book value of the Samseong-dong building and the Pangyo R&D Center is 230 billion KRW, their market value is estimated to be around 1 trillion KRW.

Park also explained the monetization of Purple, the platform that services NCSoft’s self-developed games. He said, "Currently, Purple is a platform exclusively for NCSoft games, but our goal is to launch 2 to 3 overseas triple-A (blockbuster) games through Purple."

NCSoft announced the day before that it will repurchase 533,417 shares of its own stock to enhance shareholder value. Regarding this, co-CEO Park said, "The acquired treasury stock will account for about 10%, and this will be used as funds for future mergers and acquisitions (M&A)." He added, "We plan to maintain a 10% treasury stock ratio going forward, and any additional shares purchased beyond 10% will be considered for cancellation." The planned repurchase amount is 98.095386 billion KRW, with the acquisition period from the 10th of this month to August 9th.

Regarding new game releases and overseas expansion plans, co-CEO Park emphasized, "We will release Battlecrush, Project BSS, and the global version of TL as scheduled this year," and "We guarantee the launch of Aion 2, LLL, and Project G next year."

NCSoft is also pursuing entry into Southeast Asia through the establishment of a joint venture (JV) and explained improvements in game development. Co-CEO Park said, "The development period became too long, failing to keep up with user trends, and we hardly conducted external testing, so user feedback was not properly reflected." He added, "Since the end of last year, we have established a review community involving younger participants and introduced new guidelines for development periods."

He continued, "We will make a detailed announcement around July to August, but we are working on collaborating with a global console platform company to develop or convert existing IPs for consoles," and "We are growing ArenaNet under NC West as our North American frontline studio, while NC America will focus on publishing."

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