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NCsoft Reports First Loss in 12 Years, Banks on Lineage W

gioco: Lineage w

Published on：Nov 29,2024

Declining performance and restructuring commitments

During its third-quarter earnings call on Nov. 4, NCsoft CFO Hong Won-joon said the company plans to focus more on its core business from 2025 onward to rebound its financial performance. The company recorded an operating loss of KRW 14.3 billion in the quarter, a sharp reversal of performance compared to the KRW 16.5 billion operating profit in the same period last year.

In fact, NCsoft's operating profit has been declining since the first quarter of 2022, and it was close to the brink of a loss in the second quarter of this year. According to analysts, the decline in revenue was mainly due to lower earnings from mobile games and the failure of new games to reach the market.

Core Products Face Challenges

NCsoft's classic Lineage series has been the backbone of its revenue, including “Paradise M” (2017), “Paradise 2M” (2019) and “Paradise W” (2021). These games had generated huge revenues for the company with their probabilistic lottery mechanics and competitive gameplay. However, with competitors launching a large number of similar games, the market is becoming saturated and user interest is declining significantly. For example, Paradise W, which generated a record revenue of around 1 trillion won last year, only generated 195.2 billion won in the first three quarters of this year.

Meanwhile, recently released new games have performed poorly. Thrones & Liberty (TL) has seen a rapid decline in subscribers despite initial popularity; fighting game Battle Crush will cease operations this month due to poor performance; and Project HOF, which targets younger players, has seen a rapid decline in revenue rankings despite significant marketing resources. In contrast, many players are still interested in the classic game Lineage W. In particular, the Lineage W Diamonds Sale campaign has attracted the attention of some loyal users and brought a certain amount of vitality to the game.

Radical Reform and Future Plans

In response to its woes, NCsoft announced a series of major restructuring measures, including the spin-off of four subsidiaries of its AI and game development studios, the cancellation of six new game projects, and the launch of its first voluntary retirement program in 12 years. The company hopes to reduce costs by optimizing its structure and focusing its resources on key upcoming releases.

Going forward, NCsoft will focus on upcoming games such as Journey of the Monarchs and look to rebound its market position with a number of heavy-hitting titles launching after 2025.

Despite the current challenges, NCsoft is confident in its future and is seeking to re-emerge in the highly competitive gaming market by reorganizing and focusing on its core business.

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