Kakao Games has struggled to escape the impact of the lack of new titles in the second quarter of this year, continuing its losses for three consecutive quarters. The ongoing lack of new titles since the second half of last year, combined with a drop in sales of key titles such as 'Uma Musume', has led both mobile and PC platforms to experience a simultaneous slump. Although the company has announced new releases starting with 'Guardians Order' in the second half, it remains unclear whether a rebound in performance will be achieved this year, as the launch of major projects has been postponed to next year.
Kakao Games reported a consolidated operating loss of 8.6 billion won in the second quarter, converting to a deficit compared to the same period last year (operating profit of 4.2 billion won). Revenue was 115.8 billion won, a decrease of 24.2% compared to the same period last year, and the net loss for the current period expanded significantly to 33.6 billion won. This marks the third consecutive quarter of losses since the fourth quarter of last year.
The center of the performance downturn was the mobile sector. In the second quarter, mobile game sales decreased by 26% year-over-year to 101 billion won. While 'Uma Musume Pretty Derby' and 'ArcheAge War', which drove last year's success, have entered a stabilization phase of declining sales this year, there were no new titles to replace them. The PC game sector also saw a decline of 9% compared to last year and 45% compared to the previous quarter, reaching only 14.8 billion won, due to the expiration of the early launch effect of 'Path of Exile 2'.
However, the reduction of the loss margin by about 31% compared to the previous quarter (operating loss of 12.4 billion won) due to the global expansion of existing live games and expense management efforts was a positive factor. In particular, the key title 'Odin: Valhalla Rising', which successfully expanded into North America, Europe, and Southeast Asia in April, contributed to the overall reduction of loss size. In Korea, it also reclaimed the top spot in Google Play revenue with a four-year anniversary update at the end of June, showcasing its intellectual property competitiveness.
Cho Hyuk-min, the Chief Financial Officer (CFO) of Kakao Games, noted during a conference call after the earnings announcement that, "We promoted platform diversification and global strategies in the first half and implemented operational efficiency, but the prolonged lack of new titles made it impossible to avoid a decrease in revenue," adding that, "The new titles scheduled to be released sequentially starting with 'Guardians Order' in the second half will serve as a crucial opportunity for a significant rebound."
Kakao Games' first new title of the second half, 'Guardians Order', is set for a global simultaneous release in September. This 2D side-scrolling action RPG features pixel graphics and manual control, targeting to attract global users. Development is handled by Pixel Tribe, founded by the creators of 'Crusader Quest'. During a recent soft launch in Southeast Asia, New Zealand, and Australia, positive feedback from local users has fueled expectations for success.
In contrast, the launch times for many major anticipated titles have been postponed to next year. The subculture collection nurturing game 'Project C', developed by Lionheart Studio, and the large MMORPG (Massively Multiplayer Online Role-Playing Game) 'Project Q', which were expected to launch this year, are now being prepared with a goal for a second-quarter 2026 release. Notably, large anticipated projects 'Chrono Odyssey' and 'ArcheAge Chronicle' have officially had their schedules adjusted.
'Chrono Odyssey', an action MMORPG developed by Chrono Studio, received high praise for its worldview, art concept, and open-world content in the global closed beta test (CBT) held in June. However, feedback indicated that improvements were needed in optimization and user convenience. Consequently, Kakao Games has postponed the official release to the fourth quarter of next year, starting additional development to enhance the game's completeness.
'ArcheAge Chronicle', the next project from Kakao Games' subsidiary XL Games, plans to conduct user testing this year to examine its content. The strategy is to preemptively address issues such as optimization during the testing phase, based on experiences from the 'Chrono Odyssey' CBT, to enhance development efficiency.
Han Sang-woo, CEO of Kakao Games, stated during the conference call that, "As global market competition intensifies and user expectations rise, it is necessary to prioritize game completeness even if it means accepting schedule delays," and added, "We will endure short-term performance shortcomings and lay a more solid foundation for success in the mid- to long-term." He further noted, "We are incorporating the operational know-how gained from the recent 'Chrono Odyssey' CBT into 'ArcheAge Chronicle', aiming to minimize additional schedule delays."