[NC]First-Quarter Results Revealed... Growth Expected Through New Subculture Titles

Nexon, Krafton, and NC Achieve Record-High Quarterly Results
Netmarble and Kakao Games Develop Subculture Titles Amid Sluggish Performance

The first quarter performance reports of major domestic game companies have been released. While some game companies achieved their highest-ever results based on key intellectual property (IP), others posted sluggish results due to lackluster performance from newly released titles. These companies are now formulating strategies to drive full-fledged growth momentum through new subculture game releases.

Teaser image of 'Project RX,' a new subculture game developed by Nexon. Provided by Nexon

Nexon recorded first-quarter revenue of 1.4201 trillion won (152.2 billion yen, based on an exchange rate of 932.8 won per 100 yen for the first quarter), up 34% year-on-year. Operating profit increased by 40% to 542.6 billion won, and net profit rose by 118% to 533.8 billion won, marking the highest figures ever for a single quarter across all metrics.

Krafton and NC also posted their highest-ever quarterly results. Krafton's first-quarter revenue and operating profit reached 1.3714 trillion won and 561.6 billion won, respectively. Krafton's performance was supported by diversifying content based on its flagship IP, 'PUBG: Battlegrounds.' NC also saw its revenue and operating profit reach 557.4 billion won and 113.3 billion won, respectively, driven by growth in PC games and strong performance in overseas markets.

Netmarble showed signs of taking a breather. Netmarble’s first-quarter revenue rose 4.5% year-on-year to 651.7 billion won, with operating profit up 6.8% to 53.1 billion won. Although both revenue and operating profit increased, some observers noted that the results did not meet expectations. NH Investment & Securities recently lowered its target price for Netmarble from 73,000 won to 60,000 won. Ahn Jae-min, a researcher at NH Investment & Securities, stated, “The games released in the first half of the year have not quite met market expectations,” adding, “Although the titles launched in March and April yielded meaningful results, none achieved breakout success.”

Kakao Games continued to face difficulties, recording its sixth consecutive quarterly loss. Kakao Games' first-quarter revenue fell 32.5% year-on-year to 82.9 billion won. The operating loss widened to 25.5 billion won, compared to a loss of 12.4 billion won in the same period last year. The absence of new releases in the first quarter contributed to the weak performance.

The subculture market reaches 72 trillion won... Game companies rush to unveil new subculture titles

Netmarble subculture game new release 'MonGil: Star Dive' main image. Provided by Netmarble

Game companies, having received their first-quarter results, are now looking to new subculture game releases for further growth. Their aim is to secure more users in the expanding subculture game market. According to market research firm DataIntello, the global subculture market grew from $41.2 billion (about 6.2 trillion yen) in 2021 to $52.4 billion (about 7.9 trillion yen) last year. The domestic subculture market is also estimated to be worth around 500 billion won.

Nexon, known as a powerhouse in subculture games with titles such as 'Blue Archive,' is currently developing two more new games: 'Azure Promilia' and 'Project RX.' Azure Promilia is a new game in which players explore a fantasy continent alongside characters with distinct personalities. Azure Promilia is conducting a closed beta test in Korea through May 18, with a domestic launch planned for later this year. Project RX is designed to create an immersive world where users can live alongside characters. Notably, Project RX is also being developed for consoles, a platform rarely used for subculture games.

NC is also set to release a new subculture game, 'Limit Zero Breakers,' this year. Limit Zero Breakers is a subculture game where players take on powerful bosses using characters with various combat styles. The game will be tested globally on both Steam and mobile platforms from June 11 to 15. Krafton is also reportedly developing a subculture mobile game through its in-house studio, Loonshot Games.

Even companies with poor recent results are looking to subculture games for a turnaround. Netmarble is hoping for improved second-quarter performance following the global launch of 'MonGil: StarDive' on April 15. MonGil: StarDive features animation-like direction and easy controls. Netmarble has stated it is managing MonGil: StarDive with a long-term perspective rather than seeking a short-term sales spike. On May 7, Netmarble CEO Kim Byung-kyu said at a conference call, “Rather than analyzing and correcting what fell short of market expectations, we are currently formulating an update direction and focusing on country- and platform-specific strategies based on our findings.”

Kakao Games is preparing a new subculture collection RPG, 'Project C,' through its subsidiary Lionheart Studio. Project C features multidimensional characters whose abilities, skills, and appearances change based on communication and development reflecting personality and tendencies. Kakao Games plans to launch Project C in the fourth quarter of this year.

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