Domestic game companies rolled out new titles one after another last month for the second half, seeking a rebound in results, but most appear to have failed to generate early buzz. With no new titles in the first half, sales stagnated, and warning lights are now flashing for second-half results as well. In an overall depressed gaming market, intensifying competition is making it harder for new releases to break out.
According to the gaming industry on the 13th, starting with Netmarble's "King of Fighter AFK" last month, each company released its highly anticipated titles in succession, including Com2uS' "The Starlight," Kakao Games' "Goddess Order," and WEBZEN's "R2 Origin" and "MU: Pocket Knights." The third quarter is traditionally peak season for the gaming industry, when major companies beef up their lineups to stage a rebound. In particular, because September is the last month of the third quarter and just ahead of the fourth quarter, major game companies typically concentrate on launching new titles to boost second-half results.
Still, despite these launches, the early performance of most titles is falling short of expectations. According to mobile analytics firm Mobile Index, in the first week of October's weekly combined revenue rankings, Netmarble's "King of Fighter AFK" ranked 33rd and Com2uS' "The Starlight" ranked 36th. WEBZEN's "MU: Pocket Knights" and "R2 Origin" ranked 101st and 107th, respectively, while Kakao Games' "Goddess Order" ranked 116th, remaining outside the top 100. Looking at user count rankings for the same period, only Kakao Games' "Goddess Order" was inside the top 100 at 68th.
Industry officials note the disappointment is big given that the September releases were each company's flagship titles aimed at a second-half rebound. In particular, given the nature of the mobile game market, where early buzz dictates the sales trajectory, new titles with weak starts do not appear likely to rebound later.
Jeong Ui-hoon, an analyst at EUGENE INVESTMENT & SECURITIES, said, "For Kakao Games, this is its first new title in about eight months since early-year Valhalla Survival, and with only 'SM Game Station (working title)' slated within the year, the sluggish showing of Goddess Order is all the more disappointing," adding, "The Steam concurrent users for Path of Exile 2 (POE2) have now fallen to the 80,000 range, so it seems difficult to expect more than a modest contribution to third-quarter results."
Kim Hyeon-yong, an analyst at Hyundai Motor Securities, said, "Com2uS' The Starlight ranked 105th in mobile revenue in the fourth week of September, which we judge to be a somewhat disappointing initial performance," adding, "With revenue growth sluggish and marketing expenses rising, operating profit is expected to fall well short of market expectations."
It has become harder than in the past for new titles from the gaming industry to succeed in the market. Competition has intensified as Chinese games, backed by technological prowess and ample capital, have surged in the mobile game market. As the industry overall slumps and user expectations rise, Korean game companies are grappling more. Also, as it has become the norm for companies to generate stable revenue by steadily updating existing hits, there is less room for new titles to gain a foothold.
A gaming industry official said, "These days, the old formula that 'if you release a new title, a certain level of revenue is guaranteed' has completely broken down," adding, "User expectations have risen, and competition with foreign companies such as those from China is fierce." The official added, "From the perspective of domestic game companies, marketing costs keep rising, but the chances of a hit are actually declining."