Even Without New Releases, Star IPs Drive Results... Divergent Earnings Among Game Companies

NHN Disney Tsum Tsum, Revenue Up 47%
Krafton Joins the KRW 1 Trillion Club on PUBG's Strength
Kakao Games and DevSisters Target Performance Improvement on Existing IP

The performance of major domestic gaming companies is showing a divergent trend depending on the success and expansion potential of their key intellectual properties (IP). Companies that have posted strong results have continued with an aggressive strategy of expanding their existing IPs, even while focusing on new releases.

Krafton's core intellectual property PUBG: Battlegrounds. Provided by Krafton

On May 12, NHN announced that its consolidated revenue for the first quarter of this year reached KRW 671.4 billion, an increase of 11.9% year-on-year. Operating profit was KRW 26.3 billion, down 5% during the same period, but net profit turned to black, reaching KRW 31.1 billion. Growth in the game division’s existing IP led to this performance. NHN’s game division revenue rose by 6.8% to KRW 127.8 billion. The core IP “LINE: Disney Tsum Tsum,” which marked its 12th anniversary, saw its revenue jump by 47%, driven by a collaboration with the popular animation “Detective Conan,” contributing to the overall results. NHN’s mainstay web board games also grew by 11% over the same period thanks to regulatory easing implemented in February.

Major domestic gaming companies are improving their performance based on the key IPs they already own. This marks a shift from the previous trend where new releases primarily drove revenue growth. Krafton’s revenue for the first quarter this year reached KRW 1.3714 trillion, up 56.9% year-on-year, with operating profit rising 22.8% to KRW 561.6 billion. The company not only achieved its highest-ever quarterly revenue but also joined the “KRW 1 Trillion Club” for a single quarter. This growth was driven by revenue of KRW 1 trillion generated solely from its core IP “PUBG: BATTLEGROUNDS,” rather than from new releases. Krafton pursued expansion of the PUBG IP through collaborations, such as with global supercar manufacturers Aston Martin and Apollo Automobil, in addition to standard game operations.

NCSOFT and Nexon are also expected to show continued stable growth based on their existing IPs, ahead of their earnings announcements on May 13 and 14, respectively. According to SK Securities, NCSOFT’s first-quarter revenue is forecast to reach KRW 494.4 billion, up 37.2% year-on-year, with operating profit surging 1,578.1% to KRW 87.6 billion. SK Securities researcher Nam Hyoji said, “The results of ‘Lineage Classic,’ released in February this year, and ‘Aion 2,’ announced in November last year, will be reflected.” Both Lineage Classic and Aion 2 are games developed using NCSOFT’s existing IPs, such as Lineage and Aion.

Nexon is already expecting quarterly revenue to exceed KRW 1 trillion. Shiro Uemura, Nexon’s Chief Financial Officer (CFO), stated during a conference call in February that “first-quarter revenue will be between JPY 150.5 billion (approximately KRW 1 trillion) and JPY 164 billion (about KRW 2 trillion).” This is due to the continued competitiveness in the Chinese market of “MapleStory Idle,” a spin-off from the MapleStory IP, and “Dungeon & Fighter,” which was released in 2005, rather than new releases.

NCSOFT and Nexon Expected to Improve Earnings on Existing IP... DevSisters Launches Voluntary Resignation Program

DevSisters' core intellectual property Cookie Run. Provided by DevSisters

In contrast, Kakao Games recorded weak results, despite owning the key IP “Odin.” Kakao Games’ first-quarter revenue for this year was KRW 82.9 billion, a decrease of 32.5% year-on-year. Its operating loss was KRW 25.5 billion, marking an operating deficit for the sixth consecutive quarter. Revenue from the mobile gaming segment fell by 42.7% during the same period, as existing games failed to contribute to performance. Kakao Games aims to improve its results in the third quarter with the release of “Odin Q,” a new large-scale MMORPG developed from its core IP.

DevSisters also showed disappointing performance. For the first quarter of this year, DevSisters’ revenue fell by 34.4% to KRW 58.5 billion. The company posted an operating loss of KRW 17.4 billion and a net loss of KRW 15.1 billion, turning to deficit during the same period. It is interpreted that DevSisters’ existing IP “Cookie Run” failed to drive growth.

Ultimately, DevSisters has introduced management reform measures, including the implementation of a voluntary resignation program for all employees and the launch of unpaid management by CEO Cho Kilhyeon and other executives. The company is also pursuing a restructuring of its portfolio based on core IP. A DevSisters official stated, “Based on these management reform measures, we will aim for the successful launch of new titles and increased efficiency of key live services in the second half of the year.”

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