NCSOFT Reports Third Quarter Loss Due to Rising Operating Costs.


Seoul: NCSOFT Corp., a major South Korean game developer, announced a significant financial downturn in the third quarter as it reported a net loss attributable to increased operating costs associated with the release of new game titles and substantial updates. The company recorded a net loss of 26.5 billion won (US$19.3 million) from July to September, a stark contrast to the net profit of 44 billion won reported in the same period last year.

According to Yonhap News Agency, the company also experienced an operating loss of 14.3 billion won, a reversal from the previous year’s profit of 16.5 billion won, while its sales declined by 5 percent year-on-year to 401.9 billion won. The transition to a net loss was primarily driven by heightened operating expenses linked to the promotion of new games and unfavorable currency exchange rate conditions. Earlier this year, NCSOFT launched a new massively multiplayer online role-playing game (MMORPG) titled Throne and Liberty, as well as the switching role-playing gam
e, Hoyeon.

The company’s revenue for this period included 286.2 billion won from South Korea, 49.4 billion won from Asia, and 28.2 billion won from North America and Europe. Sales from mobile games saw an increase of 16 percent year-on-year, reaching 253.4 billion won, whereas sales from online computer games fell by 6 percent to 80.7 billion won.

In an effort to address its sluggish performance, NCSOFT announced plans to establish four new firms through a split-off, which will include independent game studios and an artificial intelligence company. Furthermore, the company intends to globally launch new titles, such as the shooter game LLL and MMORPG AION2, in the coming year.

Despite the financial setbacks, shares in NCSOFT rose by 1.15 percent to 219,500 won on the main Seoul bourse, though they underperformed compared to the broader Korea Composite Stock Price Index’s gain of 1.83 percent. The company’s earnings report was released after the stock market had closed.