South Korean online game giant NCSoft Corp. whose growth has plateaued in recent years amid the lack of its sure-fire growth driver will likely see both operating profit and sales recover this year thanks to upcoming launch of new games.
Operating profit of NCSoft declined from 278.2 billion won ($238 million) in 2014 to 237.5 billion won last year, while sales stalled with 756.7 billion won in 2013, 838.7 billion won in 2014 and 838.3 billion won in 2015. But the company is certain of a turnaround in its profitability with a plan to release four new games between December and the first half of next year. Market analysts expect that the company’s operating profit for this year to hit 300 billion won and sales for next year to top a record 1 trillion won, helping its stock price gain momentum.
According to industry sources on Wednesday, NCSoft plans to launch Lineage RK, a new mobile game in 12 countries including Korea, Taiwan and Vietnam on December 8. Six days later, Netmarble Games Corp. will release mobile game Lineage Revolution. NCSoft owns 9.8 percent of Netmarble Games and they are cooperating in game development.
Another mobile game Lineage M is scheduled to be available in the first half of next year. New PC game Lineage Eternal will also be launched late next year after a closed beta service was introduced on Wednesday. Lineage was one of the most successful online games that have brought fame to NCSoft. Market watchers pay attention to whether the four sequels designed to leverage the influence of Lineage will make a hit again.
Analysts expect that the new games will contribute to the company’s earnings. Sales will likely jump from some 900 billion won this year to more than 1.15 trillion won next year. Operating profit is likely to surpass 400 billion won next year. Give its high operating margin of some 30 percent, a considerable part of additional revenue generated from new games will be directly linked to profits.
Its stake ownership of Netmarble Games is likely to be reevaluated, too. Market capitalization of Netmarble Games that plans to go public in January or February is expected to reach 8 to 10 trillion won and NCSoft that paid 380 billion won for the stake is expected to gain up to 600 billion won profit from the IPO.