Webzen's stock price, which has been on a downward trend for the past year, continues to fall. With a dependence on the main intellectual property (IP) "Mu" for revenue at an excessively high level of 70%, the postponement of new releases appears to leave insufficient factors for stock price increases. The ongoing legal risks stemming from plagiarism disputes with NCSoft are also heightening shareholders' anxieties.
On the morning of the 27th, Webzen's stock price recorded 14,080 won in the KOSDAQ market, trading at a price 2.63% (380 won) lower than the previous day. Webzen's stock price has fluctuated recently between the 14,000 won and 15,000 won ranges. Compared to the price of 19,470 won in mid-August, this reflects a 25% decrease. The market capitalization has fallen below 500 billion won.
The sluggish performance of Webzen's stock can be attributed to low expectations for new releases. The company faces criticism for its excessive reliance on the massively multiplayer online role-playing game (MMORPG) "Mu" and "R2" (Reign of Revolution). While the main IP serves as a strong cash cow for the company, there is a risk that a decline in the popularity of its works could greatly impact the company's performance.
Webzen is also experiencing deteriorating performance as revenues from "Mu" and "R2" continue to decline. By the end of the third quarter, revenues from "Mu" amounted to 110.428 billion won, down 10.3% from 123.122 billion won during the same period last year. Similarly, revenues from "R2" also saw a decrease, totaling 16.609 billion won, a 54.9% drop compared to 36.856 billion won in the same period last year. "Mu" accounted for 69.7% of total revenues (158.361 billion won) up until the third quarter of this year.
Webzen is preparing two new titles, but has not yet finalized their release dates. The open-world action role-playing game (RPG) "Dragon Sword," which received high praise for its completion level at the G-Star event in November, is being developed based on user feedback. The subculture game "Terbiss" is being promoted at various exhibitions. Both games are targeted for release next year. Additionally, Webzen is preparing the publishing of the MMORPG (massively multiplayer online role-playing game) "Dragons and Warriors."
The legal battle with NCSoft also poses a negative factor for Webzen. NCSoft previously filed a lawsuit in 2021, claiming that Webzen's "R2M" excessively imitated its "Lineage M," and won in the first trial. Following this, NCSoft expanded the scope of its claims based on the first trial results and filed an appeal, seeking 60 billion won in damages from Webzen in 2023. According to industry sources, the ruling for the appeal is expected to be announced in the first half of next year.
Investment sectors anticipate that Webzen's stock price will rebound once a release date for new titles is confirmed. Odonghwan, a researcher at Samsung Securities, noted, "If the subculture new title Terbiss and the publishing RPG Dragon Sword are released in 2025, we expect the IP to expand significantly." Gang Seok-oh, a researcher at Shinhan Securities, mentioned, "The biggest risk is the ongoing delays in self-developed new titles and the underperformance of externally sourced games, leading to decreased revenue. If the release schedule for new titles becomes concrete, we will see expectations reflected in the stock price."
Webzen stated, "We are prioritizing medium- to long-term business portfolio diversification through internal and external investments, and we plan to establish new growth engines through diversification in game genres." Regarding the lawsuit, they mentioned, "It is a matter currently in progress and difficult to comment on."