As Devsisters' third-quarter results deteriorated, its share price has plunged about 40% over the past three months. With the company's revenue structure effectively concentrated in the intellectual property (IP) "Cookie Run," the limits of a single-IP strategy have surfaced. Considering that all upcoming new games are being developed with the "Cookie Run" IP, the dependence is likely to deepen.
According to the Korea Exchange (KRX) on the 25th, Devsisters' share price fell 38.2% over the past three months. The stock, which was 49,450 won on Aug. 26 this year, closed at 30,550 won the previous day. Compared with Sep. 23 this year, when the share price peaked at 58,200 won over the three-month period, it plunged as much as 47.5%. Among major game stocks, Devsisters posted the steepest three-month decline.
The third-quarter earnings decline weighed on the stock plunge. Devsisters' third-quarter revenue this year was 54.9 billion won, down 23.8% from the same period a year earlier (72 billion won). It swung to an operating loss of 700 million won. Through the second quarter, the company had shown a stable trend, with revenue and operating profit of 92 billion won and 10.1 billion won, respectively, but results tumbled in just one quarter. The company said, "This quarter's updates centered on casual content, leading to a temporary revenue decline."
Still, the industry notes that Devsisters' reliance on the single Cookie Run IP has hit its limits. Devsisters has diversified genres by leveraging its flagship IP "Cookie Run," expanding from a mobile running game into an RPG, puzzle, and co-op action. Major titles include "Cookie Run: Kingdom," "Cookie Run: OvenBreak," "Cookie Run: Tower of Adventures," and "Cookie Run: Witch's Castle."
However, "Cookie Run: Kingdom" saw revenue fall more than 70% from the initial level after its launch in China. With no large-scale updates quarter over quarter and the launch effect of "Cookie Run: Tower of Adventures" fading, third-quarter results declined. The release date of the anticipated title "Cookie Run: OvenSmash," initially slated for this year, was pushed back to March next year, further dampening investor sentiment.
The company's main revenue source, game revenue, was 49 billion won in the third quarter, down 30.2% from a year earlier. Overseas game revenue grew 3.8% to 35.6 billion won, but domestic game revenue fell 62.7% to 13.4 billion won, weighing heavily. Still, non-game revenue increased to 5.8 billion won from a year earlier, and rising North American sales of the trading card game (TCG) "Cookie Run: Braverse" were a positive sign.
Devsisters moved to diversify its IP to address the risks of a single IP, but it has not delivered standout results. In 2023, it introduced the construction simulation game "Brick City" and the shooting game "Side Bullet," both based on new IP. However, Side Bullet ended service just a month after launch, and Brick City has not been updated since April last year. As new IPs failed to meet initial expectations, Devsisters reinforced its strategy to refocus on the Cookie Run IP.
Still, some raise concerns about Devsisters' strategy of expanding its portfolio with the single "Cookie Run" IP. If new titles are released repeatedly within the same universe, internal cannibalization of the brand is more likely than market expansion. Each time a new title comes out, instead of broadening the user base, existing Cookie Run users may simply shift between games, critics say.
A gaming industry official said, "The Cookie Run IP is certainly a powerful weapon, but excessive reliance on a single universe will accumulate long-term growth limits and update burdens," adding, "It may not help profitability right away, but in the long run, they must not stop discovering new IPs to broaden the user base."