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NCSoft financials show almost 75% drop in profit year-on-year

The majority of the company’s revenue comes from mobile games
NCSoft financials show almost 75% drop in profit year-on-year
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Korean game maker NCSoft has seen a nearly 75% tumble in income year-on-year in their latest financials.

That’s according to outlet Korea Times, who reported that their operating income had fallen 71.3% to to 35.3bn won ($26.9m), while their profit had dropped 74.3% to 30.5bn won ($23.2 million) from a peak of 118.7bn won ($90.5m) in 2022. These earnings unsurprisingly fell well short of expectations, and one of the key drops was for NCSoft’s flagship title Lineage W which saw a 54% drop in sales, down to 102.8bn won ($78m).

In July of this year, NCSoft’s stock price saw a sharp dip by 36.6% since January. A tumble that has continued into August reflecting lack of investor confidence in the company, a situation unlikely to be helped by these bleak financial results. As noted in Korea Times’ coverage, the company still makes 64.8% of its sales in Korea and is highly reliant on the domestic market, while this decline in income also continues a trend seen earlier in our coverage of their January financials, where income dropped 57% year on year.

Trouble in Korea?

If there is one possible light at the end of the tunnel it's - ironically - continuing worries around the Chinese games market due to increased regulatory oversight and the hangover from the months-long licensing freeze which paralysed the country’s mobile gaming industry. With news that China will be further cracking down, this time on non-gaming apps, spooked investors may look within the Asian market for other investment opportunities.

Despite attempts to tackle company finances previously, with a huge 20% cut in staff, it seems this has done little to correct the company’s trajectory. It’s quite a sharp change in fortunes, as NCSoft had previously made our Top 50 Game Makers of 2022 list in August of last year, mainly due to the great performance of Lineage W at the time, their most successful launch.