Pearl Abyss has announced that the highly anticipated "Crimson Desert" will be released in the second half of next year, resulting in a continuous decline in its stock price. This is because the launch of Crimson Desert, which was expected to provide momentum for the company's recent sluggish performance, has been delayed longer than anticipated, increasing the likelihood of a prolonged performance gap. However, there are concerns that even if Crimson Desert is launched in the second half of next year, the company's performance may not rebound.
According to the Korea Exchange on the 20th, Pearl Abyss closed at 27,150 won. Just a month ago, the stock price was 37,500 won, but it has dropped by about 27.6% in one month. During the COVID-19 pandemic's peak in January 2022, the stock price soared to 130,000 won, but it has now plummeted to the 20,000 won range.
The decline in Pearl Abyss's stock price is due to the delay in the launch date of Crimson Desert to the second half of next year, which has frozen investor sentiment. On the 13th, Pearl Abyss unveiled the "2025 release teaser gameplay trailer" for Crimson Desert at the Game Awards (TGA) held in Los Angeles, United States, announcing a plan to release it in the fourth quarter of next year. Originally, Crimson Desert aimed for a release in the second half of 2021. However, after officially announcing a delay in July 2021, the company has gradually released only limited information.
Even among the securities sector, there is skepticism regarding the repeated delays in Crimson Desert's release date. Kiwoom Securities has lowered its target price for Pearl Abyss by 20% and excluded it from its favorite stocks. Kim Jin-gu, a researcher at Kiwoom Securities, noted, "The release timeline for Crimson Desert has not even reached the conservative estimate of the third quarter of 2025 that our firm projected. It is necessary to internally review whether the company's comments that development of Crimson Desert is in the final stages have actually increased market predictability."
Pearl Abyss's actions are not solely an issue related to Crimson Desert. Another upcoming project, "Goblin," gained expectations upon the release of its game trailer in 2021, but no additional information has been released since then. Some critics argue that Pearl Abyss is hastily unveiling projects that have not even properly begun development as a strategy to defend its stock price.
Currently, Pearl Abyss relies heavily on its main intellectual property (IP), "Black Desert." As of the third quarter of this year, the share of the Black Desert IP in the company's revenue accounted for 68%. Last year, it reached as high as 71.2%. While it is not uncommon for game companies to rely significantly on a single game, it is rare for a company to depend solely on one game for nearly a decade since the launch of Black Desert in 2015.
Pearl Abyss stated that it is focusing on improving the game's quality. However, the problem is that the company must endure a drought in performance until the release of Crimson Desert. In fact, Pearl Abyss recorded a revenue of 79.5 billion won and an operating loss of 9.2 billion won in the third quarter of this year. Revenue decreased by 6.4% compared to the same period last year, and operating profit turned to a deficit. The decline in the Black Desert IP led to the drop in revenue, with IP revenue decreasing from 66.8 billion won in the first quarter to 54 billion won in the third quarter.
If Crimson Desert is launched, performance is expected to rebound. The securities sector estimates that sales of Crimson Desert will range from 3 million to 10 million copies. Mirae Asset Securities projects 5 million copies, Yujin Investment Securities estimates 3 million copies, and Kiwoom Securities estimates 3.75 million copies in package sales by the third quarter of 2025, with cumulative sales of 7.5 million copies over four years. A simple calculation assumes that the revenue from selling 1 million copies of an AAA-rated package game is 100 billion won. Considering distribution fees, it can be considered that at least 2 million copies must be sold to surpass the break-even point for development costs, which market expectations seem to exceed.
However, some argue that Crimson Desert does not guarantee Pearl Abyss's success unconditionally. This is because, as domestic game companies continue to enter the console market successfully, user expectations for domestically produced console games have also increased.
A game industry official noted, "Unlike when Crimson Desert was first announced in 2019, there has been a succession of successful domestic console games such as 'Lies of P,' 'Dave the Diver,' and 'Stellar Blade.' As the release of Crimson Desert is continually delayed, there is a possibility that it may fail to meet the heightened expectations of users."