Kakao Games announced on the 2nd that it recorded a consolidated revenue of 122.9 billion won and an operating loss of 12.4 billion won, marking a turnaround to a loss compared to the same period last year during its first-quarter earnings report.
The poor performance in the first quarter is the result of a combination of the absence of new game releases, declining revenue from existing games, and restructuring centered on core businesses. Revenue decreased by 31% compared to the previous year, and operating profit turned to a loss. Compared to the previous quarter, revenue also dropped by 8%, and operating losses persisted.
By institutional sector, revenue from PC online games increased by 72% year-on-year and by 30% quarter-on-quarter to 26.8 billion won. This is interpreted as a result of the recognized deferred revenue from the published titles "PUBG" and "Path of Exile." In contrast, mobile game revenue declined by 41% year-on-year and by 15% quarter-on-quarter to 96.1 billion won, leading the overall performance decline.
Kakao Games is focusing on global expansion by developing new titles centered on competitive platforms and genres through its 'selection and concentration' strategy this year. Following the global launch of "Odin: Valhalla Rising" on April 29, the company plans to conduct large-scale closed beta testing of the console-based AAA online action RPG "Chrono Odyssey" through the Steam platform in the second quarter. The planned release is set for the fourth quarter of this year.
In the second half of the year, a number of new titles will be released sequentially, including the action roguelite shooter "Section 13," the 2D pixel graphics side-scrolling RPG "Guardians Order," the medieval-themed zombie survival simulator "God Save Birmingham," and the open-world MMORPG "Project Q." Among these, "Guardians Order" is aiming for a soft launch in June, followed by a global release in the third quarter. The subculture nurturing simulation game "Project C" and a casual game in collaboration with SM Entertainment, tentatively named "SM Game Station," are also planned for release within the year.
Kakao Games recently sold its entire stake in Neptune (39.4%) to Krafton for approximately 165 billion won. CFO Cho Hyuk-min noted during the earnings announcement conference call, "Currently, there is no specific use defined for the funds, but we are prioritizing expanding our lineup of new titles and considering equity investment opportunities. If there are no opportunities that meet our target level, we will also consider repaying some of our liabilities."
Furthermore, CFO Cho stated, "In the first half, we will focus on maintaining stable sales and profitability while improving our business structure, and starting in the second half, we will aim for a performance rebound beginning with the success of the release of 'Guardians Order.'" CEO Han Sang-woo explained, "'Chrono Odyssey' has completed its content implementation, and 'Archaeage Chronicle' is planning a global closed beta test in the second half following the Western region's closed beta test in June and July."