NCSOFT and KRAFTON, representing the domestic gaming industry, showed a stark contrast in performance last year. NCSOFT recorded its first annual loss in its 26-year history, continuing its slump, while KRAFTON surpassed 1 trillion won in operating profit for the first time thanks to the global success of the PlayerUnknown's Battlegrounds (PUBG) intellectual property.
NCSOFT reported a consolidated revenue of 1.5781 trillion won last year, a decrease of 11.3% compared to the previous year. The operating loss amounted to 109.2 billion won, marking a return to deficit, while net profit fell by 56% to 94.1 billion won. Particularly, in the fourth quarter, the operating loss was 129.5 billion won, exceeding market expectations of 95.8 billion won, leading to an expanded deficit. During the same period, revenue recorded 409.4 billion won, with a net loss of 7.6 billion won.
The main reasons for the poor performance were the declining sales of the core intellectual property, the Lineage series, and the underperformance of new releases. Lineage M and Lineage 2 M continued to see a decrease in revenue, maintaining a downward trend, while Throne and Liberty (TL) and Journey of Monarch, released in the second half of last year, showed disappointing results after an initial surge in popularity. Additionally, one-time expenses due to a large-scale restructuring were incurred. NCSOFT conducted voluntary retirements for more than 700 employees in the second half of last year, resulting in expenditures exceeding 100 billion won.
In contrast, KRAFTON's revenue last year reached 2.7098 trillion won, an increase of 41.8% compared to the previous year. Operating profit grew by 54% to 1.1825 trillion won, while net profit surged 119.3% to 1.3026 trillion won. In the fourth quarter, the company achieved a revenue of 617.6 billion won and an operating profit of 215.5 billion won, reflecting a growth of 31.1% year-over-year.
The growth in KRAFTON's performance was driven by the global success of the PUBG intellectual property. After becoming free-to-play, the PC version of PUBG enhanced premium content and expanded revenue, while the mobile version improved its performance and continued to grow. Notably, in the Indian market, traffic and revenue for Battlegrounds Mobile India (BGMI) hit all-time highs, driving performance improvements.
KRAFTON is continuing its global market expansion by developing four new titles utilizing the PUBG intellectual property. In March, it plans to release the life simulation game Enjoy, along with new titles in various genres such as the mobile extraction game Dark and Darker, the underwater survival adventure game Subnautica 2, and the life simulation game Dinkum Together.
The performance gap between the two companies has been attributed to their competitive advantages in intellectual property and global market strategies. NCSOFT has faced difficulties in diversifying its revenue due to increasing dependence on Lineage, and with the underperformance of new releases and restructuring, a short-term recovery in performance is challenging. In contrast, KRAFTON has adopted an aggressive expansion strategy based on the global market performance of PUBG and has joined the 1 trillion won club.
An industry insider noted, "KRAFTON is maximizing profitability based on the solid global cash cow of PUBG, while NCSOFT is losing its growth momentum, struggling with dependence on Lineage and underperformance in new titles." The insider added, "Although NCSOFT has reduced expenses through restructuring, a fundamental change in its business model is necessary beyond short-term performance improvements."