NCSOFT profit beats forecasts as Lineage W drives sales to record

NCSOFT Corp., South Korea’s leading game developer, surprised investors with stronger-than-expected profit in the first quarter as Lineage W, its latest massively multiplayer online role-playing game (MMORPG) lifted sales to a quarterly record.

The publisher of popular games such as Blade & Soul plans to release its blockbuster titles in overseas markets later this year while launching new games to maintain growth momentum.

NCSOFT said on Friday its operating profit more than quadrupled to 244.2 billion won ($190.3 million) in the first quarter from a year earlier, far higher than market forecasts of 189.9 billion won. Sales also jumped 54% to 790.3 billion won, beating forecasts of 733.5 billion won.

LINEAGE W

The healthy earnings came as Lineage W, launched in November last year, attracted a large number of gamers. The mobile MMORPG has logged sales of 730.9 billion won since its release with a revenue of 373.2 billion won in the first quarter, becoming a new cash cow, according to the company. That helped the firm’s mobile game unit raise sales by 97% to 640.7 billion won on-year.

“Lineage W secured unprecedented traffic of 1.2 million DAUs,” said NCSOFT's Chief Financial Officer Hong Won-jun in an earnings call, referring to daily active users. “Given its continuous box-office popularity, we plan to release the game in the West, such as to North America and Europe, in the second half.”

After the earnings, NCSOFT’s stock surged 10.29% to close at 439,500 won, far outperforming a 2.12% gain in South Korea’s main Kospi. Earlier this week, shares fell to as low as 395,500 won, their weakest since October 2018.

OVERSEAS MARKETS, NEW GAMES

In addition to the launch of Lineage W in the West, NCSOFT aims to release other popular games -- Blade & Soul 2, a mobile fantasy martial-arts MMORPG, in Asia, in the second half, and Blade & Soul, an online MMORPG, in the second quarter of next year, Hong said.

NCSOFT also plans to release seven new games by the end of 2023 including Throne and Liberty (TL), an MMORPG for PCs and consoles to be launched in the second half of this year.

“We will launch TL for both PC and console platforms at the same time with preparations of versions for Windows, Mac, PlayStation, Xbox and Steam,” Hong said. “Through TL, we will clearly show different strategies from those of the existing mobile games in all aspects such as ways of play and content.”

The company will also unveil the detailed roadmap for AION2, which is under development, in the second half, Hong added. AION2 is a sequel to the popular 3D MMORPG AION.

Meanwhile, NCSOFT is likely to present directions for its metaverse business that the company is preparing.

“The metaverse games we are preparing are not play-to-earn (P2E) games. We aim to create a world for users in the metaverse by converging game and non-game content,” Hong said.

Write to Sungsu Bae at baebae@hankyung.com