Amid the earnings announcements of major domestic gaming companies last year, the large firms have solidified a duopoly centered around Nexon and KRAFTON, while medium-sized companies reported better-than-expected performance. This year's business strategies appear to vary depending on the size of the gaming company. Large firms are focusing on maintaining revenue based on popular intellectual properties (IP), whereas medium-sized companies aim to continue their growth through various new releases.
◇ Solidified 'NK'… Using hit IPs to excel globally
According to the gaming industry on the 15th, Nexon became the first domestic gaming company to exceed 4 trillion won in revenue last year. Nexon's revenue last year was 4.0091 trillion won, and its operating profit was 1.1157 trillion won, representing a 5% increase in revenue compared to the previous year, while operating profit decreased by 8%. KRAFTON surpassed 1 trillion won in operating profit last year, ranking first in the gaming industry's profitability. KRAFTON's revenue last year reached 2.7098 trillion won, with an operating profit of 1.1825 trillion won, marking a respective increase of 41.8% and 54.0%, the highest figures ever.
Nexon and KRAFTON's early entry into the global market, based on hit IPs, has driven performance growth. In the case of Nexon, 'Dungeon & Fighter Mobile,' launched in China through Tencent last May, is enjoying commercial success. The sales impact of the 'Dungeon & Fighter' IP in China saw a remarkable increase of 53% compared to the previous year. Additionally, 'The First Descendant,' which was unveiled in overseas markets last July, has also contributed to the results by targeting the demand among overseas loot shooter fans.
KRAFTON's hit IP, PUBG, is excelling in the Indian market. KRAFTON launched PUBG in India under the name 'Battlegrounds Mobile India (BGMI)' in 2021, where it has been ranking in the 1st to 2nd positions in local market revenue. According to KRAFTON, BGMI has 180 million users in India and 200 million viewers for esports. BGMI set a record for the highest revenue last year, leading to a 35.7% increase in KRAFTON's overall mobile institutional sector revenue compared to the previous year.
Nexon and KRAFTON plan to maintain revenue this year by leveraging their globally popular IPs. Lee Jung-heon, head of Nexon's Japanese subsidiary, noted that "Nexon is strengthening strategic research and investment for the expansion of powerful IPs it holds, such as Dungeon & Fighter and MapleStory." He added, "We are confident in achieving the mid-term goals for the Dungeon & Fighter franchise,” and mentioned that the partnership announced with Tencent will contribute to localization efforts.
Kim Chang-han, CEO of KRAFTON, stated, "This year, we aim to upgrade the PUBG PC service to Unreal Engine 5.0 and create multiple well-made modes while adding UCG (User-Generated Content) features, which will help PUBG transition from a mere battle royale game to a platform offering diverse gaming experiences."
◇ Wemade, Pearl Abyss, Com2uS aim for rebound through new releases this year
Medium-sized gaming companies received favorable performance reviews compared to market expectations last year. WEBZEN reported revenue of 214.7 billion won and operating profit of 54.5 billion won, marking respective increases of 9.4% and 9.3% compared to the same period last year. NEOWIZ recorded revenue of 367 billion won and operating profit of 33.3 billion won last year, showing increases of 0.4% and 5.3%, respectively.
Medium-sized firms that successfully turned profits are also notable. Wemade achieved revenue and operating profit of 712 billion won and 8.1 billion won, marking respective increases of 17.6% and successfully turning profits compared to the previous year. Com2uS achieved revenue of 692.7 billion won and operating profit of 6.6 billion won, marking a profit turnaround from the previous year. Devsisters also recorded revenue of 236.2 billion won last year, an increase of 46.6% over the previous year, and achieved a profit turnaround with operating profit of 27.2 billion won.
Medium-sized firms have announced various new releases this year. Wemade is set to launch a new title starting with 'Legend of Emire' on the 20th. NEOWIZ plans to unveil the DLC (expansion pack) for 'Lie of P,' which caused a stir in the console gaming market, within the year. Pearl Abyss will release the highly anticipated 'Crimson Desert' in the fourth quarter. Com2uS opened the year with the idle role-playing game (RPG) 'Gods and Demons' launched on the 15th. Com2uS is expected to present the anticipated hit 'KBO Rising' in the first half of the year. HYBE will present its first major game, the MMORPG 'Architect: Land of Exile.' AquaTree, which developed 'Lineage 2 Revolution' and 'The Second Country: Cross World,' is currently in development, with HYBE handling the publishing.
Kim Jung-tae, a professor in the Department of Game Studies at Tongyang University, said, "In the case of Nexon and KRAFTON, they will aim to solidify their hit IP this year while maximizing growth," adding that "KRAFTON will expand PUBG's territory to North America and the Middle East, introducing new maps to secure revenue."
He continued, "Medium-sized gaming companies are also expected to announce many new releases this year and likely attempt to surpass the genres they have been involved in until now," adding that "the key will be capturing killer content, so they will pursue developing hit IP or publishing proven IPs to grow their business."