Korea game sector hopes for better profits with new titles

South Korea’s game developers aimed to improve earnings with the release of new titles in the second half after reporting disappointing quarterly profits as COVID-19 became an endemic, hurting demand for games, and labor costs surged.

Com2uS Corp. the developer of the beloved baseball mobile game MLB Perfect Inning, is scheduled to launch Summoners War: Chronicles on Aug. 16 in South Korea. The massively multiplayer online role-playing game will hit the global market in November.

A mobile game developer Netmarble Corp. is set to release more than ten new titles in the July-December period with an MMORPG Seven Knights Revolution already launched. NCSOFT Corp., the country’s leading game publisher, also plans to showcase Throne and Liberty (TL) during the period.

NO NEW GAMES TO ATTRACT PLAYERS

Major domestic game makers such as Krafton Inc., Neowiz, Netmarble, Com2uS and PearlAbyss Corp. logged disappointing earnings on Thursday. They came under pressure from not only surging labor costs and weaker demand but also a lack of new titles that could allure players.

Krafton’s operating profit fell 6.8% to 162.3 billion won ($124.7 million) in the second quarter from a year earlier, missing analysts’ profit forecast of 166.9 billion won. Neowiz reported an operating profit of 5.9 billion won, up 13% from a year ago, but failed to meet a 6.9 billion won profit forecast.

Com2uS said its operating profit tumbled 65.6% to 3.8 billion won, far lower than a consensus forecast of 6.9 billion won. The profit declined despite a record quarterly sales of 193.4 billion won as labor costs jumped 50.5%.

PearlAbyss logged an operating loss of 4.2 billion won as bonuses for employees including stock grants surged.

NCSOFT, which is scheduled to release quarterly earnings on Friday, is widely expected to report a weaker-than-forecast operating profit. Analysts predicted the developer of blockbuster titles such as Lineage to report an operating profit of 141.9 billion won for the April-June period.

On the other hand, Kakao Games Corp. reported an operating profit of 81 billion won, about ten times 810.2 million won in the same period of 2021, powered by new titles such as Odin and Uma Musume Pretty Derby. Online game juggernaut Nexon Co. enjoyed a record quarterly sales of 817.5 billion won thanks to the mobile version of Dungeon & Fighter.

Write to Jeong-Soo Hwang at hjs@hankyung.com
Jongwoo Cheon edited this article.