Korea's major game companies are expected to see a split in third-quarter results depending on whether new titles take off and how existing intellectual property (IP) performs. Among the 3N2K (Nexon, Netmarble, NCSOFT, KRAFTON, Kakao Games), Netmarble and KRAFTON are projected to post solid results, while Nexon's operating profit is likely to decline and NCSOFT and Kakao Games are expected to record operating losses.
According to financial information provider FnGuide on the 21st, Netmarble's third-quarter revenue is forecast at 696.2 billion won and operating profit at 88.9 billion won, up 7.6% and 35.8%, respectively, from a year earlier. A string of hit new releases drove the improvement. "Vampir," a massively multiplayer online role-playing game (MMORPG) that Netmarble released in August, has gained popularity, including topping revenue on both major domestic app markets (Google Play and App Store). Market research firm Sensor Tower analyzed that Vampir booked $40 million (about 57.1 billion won) in its first month.
"Seven Knights Rebirth," a collection-type role-playing game (RPG) released in Korea on May 5, is also still a hit. After topping revenue on both major app markets following its launch, the game is currently ranked No. 12 by revenue on both markets. In particular, the game launched globally last month and ranked No. 1 by revenue on both major app markets in Thailand and No. 1 on Hong Kong's App Store. Since turning a profit in the third quarter of last year with "Solo Leveling: ARISE," Netmarble has continued to show strong revenue.
Kang Seok-o, an analyst at Shinhan Investment & Securities, said, "Vampir, KOF AFK, and the global version of Seven Knights Rebirth delivered results that exceeded expectations," and noted, "The surprise run that began in 2024 could continue into next year." He added, "Considering next year's results, we judge Netmarble to have the most attractive valuation (price level relative to results) in the game sector."
KRAFTON's third-quarter revenue is expected to be 816 billion won, with operating profit of 354.8 billion won, up 13.4% and 9.4%, respectively, from a year earlier. Aggressive collaboration events for its flagship IP "PUBG: Battlegrounds" drove the results. Starting with popular girl group aespa in July, KRAFTON collaborated with supercar brand Bugatti in August and artist G-Dragon last month. On mobile, not only Bugatti but also a collaboration with the Chinese traditional animation "Ne Zha 2" worked effectively.
Nam Hyo-ji, an analyst at SK Securities, said, "Despite a high base last year due to consecutive collaborations, PC revenue continued to grow," and added, "Another premium vehicle collaboration is scheduled for the fourth quarter, so we expect the solid growth trend in results to continue."
By contrast, Nexon, NCSOFT, and Kakao Games are expected to see weaker third-quarter results due to failed new releases and delayed launches. Nexon projected third-quarter revenue of 1.0915 trillion–1.1902 trillion won, down 3.2%–11.2% from a year earlier. It said operating profit is expected at 306.5 billion–385.3 billion won, down 21.2%–34.4% year over year.
NCSOFT's third-quarter revenue is projected at 359.6 billion won, down 10.5% from a year earlier, and its operating loss is expected to be 15.2 billion won, remaining in the red. Unlike the previous quarter, the absence of updates to existing IPs and rising marketing costs for new titles are likely to hurt profitability. NCSOFT's highly anticipated "AION 2," due out on the 19th of next month, appears likely to be an inflection point for a rebound in results.
Kakao Games' third-quarter revenue is expected to be 120.6 billion won, down 25.9% from a year earlier, and it is projected to swing to an operating loss of 8.4 billion won. The failure of new titles to take off and delays in releases led to the decline. With the 2D action RPG "Goddess Order," released last month, appearing to post weak results, disclosures for "Project C," "Project Q," and "Chrono Odyssey," which had been slated for release this year, were delayed.