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NCSoft posts weak Q2 earnings over ‘Lineage M’ marketing costs
By Sohn Ji-youngPublished : Aug. 7, 2017 - 15:54
South Korean game giant NCSoft posted a weak second-quarter performance on Monday, largely due to the cost of marketing its new mobile game “Lineage M” and shrinking sales of its online games.
The firm’s operating profit shrank 56 percent on-year to 37.6 billion won ($33.34 million) while net profit dropped 66 percent on-year to 30.8 billion won during the April-June period, it said.
At the same time, its second-quarter revenue rose 8 percent on-year to 258.6 billion won during the cited period, according to the company.
NCSoft attributed the sharp drop in its second-quarter profit to the large-sum marketing costs for its new mobile game “Lineage M” coupled with shrinking sales of the firm’s PC online game ”Lineage.”
According to the company, sales of PC-based “Lineage” fell 34 percent on-year in the second quarter in line with the launch of the mobile-based “Lineage M,” suggesting a platform switch among players.
By product, “Lineage” raised 33.8 billion won, “Lineage 2” 16.7 billion won, “Aion” 10.8 billion won, “Blade & Soul” 39 billion won and “Guild War 2” 13.6 billion won. Its mobile games, including “Lineage M,” the mobile remake of the original “Lineage” for PCs, raised 93.7 billion won.
By region, Korea generated sales of 174 billion won while North America and Europe raised 28.7 billion won, Japan 10.5 billion won and Taiwan 9.3 billion won. Revenue from royalties from the intellectual property of its games reached 36.1 billion won.
NCSoft said it expects its earnings to improve in the third quarter, as the profits from its mobile hit “Lineage M” flow in. The game was launched on June 21, and only 10 days’ worth of the game’s revenue was reflected in the firm’s second-quarter earnings.
Looking ahead, the firm is also planning to launch new mobile games based on its hit games “Aion” and “Blade & Soul” by the end of this year.
Shares of NCSoft closed at 384,00 won on Monday, up 3.09 percent from the previous trading day.
By Sohn Ji-young (jys@heraldcorp.com)
The firm’s operating profit shrank 56 percent on-year to 37.6 billion won ($33.34 million) while net profit dropped 66 percent on-year to 30.8 billion won during the April-June period, it said.
At the same time, its second-quarter revenue rose 8 percent on-year to 258.6 billion won during the cited period, according to the company.
NCSoft attributed the sharp drop in its second-quarter profit to the large-sum marketing costs for its new mobile game “Lineage M” coupled with shrinking sales of the firm’s PC online game ”Lineage.”
According to the company, sales of PC-based “Lineage” fell 34 percent on-year in the second quarter in line with the launch of the mobile-based “Lineage M,” suggesting a platform switch among players.
By product, “Lineage” raised 33.8 billion won, “Lineage 2” 16.7 billion won, “Aion” 10.8 billion won, “Blade & Soul” 39 billion won and “Guild War 2” 13.6 billion won. Its mobile games, including “Lineage M,” the mobile remake of the original “Lineage” for PCs, raised 93.7 billion won.
By region, Korea generated sales of 174 billion won while North America and Europe raised 28.7 billion won, Japan 10.5 billion won and Taiwan 9.3 billion won. Revenue from royalties from the intellectual property of its games reached 36.1 billion won.
NCSoft said it expects its earnings to improve in the third quarter, as the profits from its mobile hit “Lineage M” flow in. The game was launched on June 21, and only 10 days’ worth of the game’s revenue was reflected in the firm’s second-quarter earnings.
Looking ahead, the firm is also planning to launch new mobile games based on its hit games “Aion” and “Blade & Soul” by the end of this year.
Shares of NCSoft closed at 384,00 won on Monday, up 3.09 percent from the previous trading day.
By Sohn Ji-young (jys@heraldcorp.com)
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