Netmarble bets on new games for turnaround in 2024

Netmarble Corp. expects a turnaround this year driven by new games after successfully snapping its seven consecutive quarter losing streak in the final quarter of last year thanks to its newest game, “Seven Knights Idle Adventure,” which gained instant popularity after its September launch. 

South Korea’s second-largest game publisher by revenue announced in a regulatory filing on Wednesday that it swung to an operating profit of 17.7 billion won ($13.3. million) on a consolidated basis in the fourth quarter ending December 2023 compared with the same period the previous year.

It was the first quarterly profit in eight quarters and beat Yonhap Infomax’s estimate of 7.3 billion won profit in the quarter.

Revenue dropped 3.2% on-year to 664.9 billion won but rose 5.4% from the prior quarter. Its net loss narrowed to 195 billion won from a loss of 436.6 billion won one year ago.

Thanks to the final quarter’s profit, Netmarble’s annual operating loss in 2023 was reduced to 69.6 billion won from 108.7 billion won in 2022.

The company attributed its solid earnings to brisk sales of its new game “Seven Knights Idle Adventure” and the upgraded version of “Marble Contest of Champions," which hit the market late last year.

The company raked in 534 billion won from overseas markets in the fourth quarter, taking up nearly 80% of its total revenue. Of its total annual revenue last year, 83%, or 2.1 trillion won, was raised abroad.

North America accounted for 45% of total revenue as of the fourth quarter, followed by Korea with 20%, Europe with 12%, Southeast Asia with 9% and Japan at 6%.

By genre, casual games made up the biggest portion, 43%, trailed by role-playing games (RPGs) with 38% and massively multiplayer online role-playing games (MMORPGs) with 9%.

With the company planning to release at least four new games this year, starting in the second quarter, it expects to return to annual profit this year.

“We will enhance our competitiveness by focusing on our strengths this year with much-anticipated new releases,” said Netmarble CEO Kwon Young-sik.

The company foresees a slowdown in the first quarter of this year due to the lack of new games, said Do Ki-wook, Netmarble’s chief financial officer.

“(But) we expect to swing to a somewhat solid profit this year on the back of a full-blown rebound in the second quarter,” added Do.

IDLE RPG GAME

“Seven Knights Idle Adventure” debuted on the market in September and immediately grabbed attention, rising to top positions in popularity and sales on gaming platforms.

According to mobile app market intelligence Sensor Tower, this new game ranked sixth in sales four months after its launch. It was the highest earner among non-MMORPGs in the Korean gaming market during the second half of last year.

It is based around Netmarble’s steady-selling title “Seven Knights” but different from the original intellectual property (IP) because it is in the form of an idle role-playing game (RPG), which minimizes player interaction or requires near-zero strategy. It is ideal for casual play.

“Seven Knights Idle Adventure” has succeeded in keeping players engaged thanks to its rich content.

The new title has helped Netmarble diversify its game portfolio, which has relied heavily on MMORPGs such as “Blade & Soul Revolution” and “Lineage 2: Revolution” for mobile game sales.

Its other newbie “Tower of God: New World” has also been well received by game fans since its release in July 2023, according to Netmarble.

MORE NEW GAMES IN THE PIPELINE

Netmarble will strive to maintain its latest growth momentum with more new games this year.

It plans to roll out “Arthdal Chronicles: Three Factions,” “Solo Leveling: ARISE,” “Raven 2” and “King Arthur: Legend Rises” in the first six months of this year. In China, it will release “Second Country: Cross Worlds.”

It plans to launch “Solo Leveling: ARISE” in April after open beta testing in March, said Kwon, adding that the company aims to release a new title monthly throughout the second quarter.

The CEO also said the release of “Seven Deadly Sins: Origin,” which is under development, could be postponed from its original target release date set for the end of this year.

The company is now developing two more games that can be played across PCs, mobile devices and consoles, as well as one title as a pure console game, in hopes of introducing them during the second half of this year, according to Kwon.

Netmarble shares ended up 3.1% at 62,900 won on Thursday.

Write to Seung-Woo Lee at leeswoo@hankyung.com
Sookyung Seo edited this article.