Korean Economy News
NCsoft’s Q2 OP drops 56% on weak PC game sales

By Oh Chan-jong

South Korea’s biggest online game publisher NCsoft Corp. saw its operating profit in the second quarter plunge 56.39 percent from a year earlier, falling well below market expectations due to lackluster performance of its PC games.

The Korean online game titan said in a regulatory filing Monday that its operating profit on a consolidated basis in the April-June period fell 56.39 percent on year to 37.6 billion won ($33.4 million) with net profit tumbling 65.91 percent to 30.8 billion won. Sales rose 7.52 percent to 258.6 billion won.

This comes in way below market consensus estimates which forecast an operating profit of 60 billion won on sales of 300 billion won.

Shares of NCsoft closed Monday at 384,000 won, up 11,500 won or 3.09 percent from the previous session.

Compared to the previous quarter, the company gained 23.42 percent in operating profit, 7.98 percent in sales, and 77.23 percent in net profit.

Royalty revenue stood at 36.1 billion won.

The company has been diversifying its game portfolio, which so far has been focused on computer games, by releasing three new mobile games in the first half of the year. Mobile games made up 36 percent of total revenue in the second quarter on sales of 93.7 billion won.

In June, NCsoft touched a new milestone with Lineage M, the mobile version of its blockbuster hit Lineage. But the game whose sales topped 100 billion won in just 12 days of launch would contribute to the income balance from the third quarter.

By PC game, Blade & Soul raked in 39 billion won, followed by Lineage with 33.8 billion and Lineage 2 with 16.7 billion won. Sales of GuildWars II came to 13.6 billion won and Aion 10.8 billion won.

By region, sales were 174 billion won in South Korea, 28.7 billion won in North America and Europe, 10.5 billion won in Japan, and 9.3 billion won in Taiwan.

NCsoft plans to tap into its intellectual properties to unveil new games in a variety of genres. It expects to release the mobile versions of Aion and Blade & Soul by the end of the year.

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