This year, the outlook for major Korea-based game companies represented by "3N2K" (Nexon, Netmarble, NCSOFT, Krafton, Kakao Games) is expected to diverge. Following last year, Nexon and Krafton are likely to post operating profit in the trillion-won range, while Netmarble also maintained solid results. NCSOFT appeared to rebound after hitting bottom last year, but Kakao Games saw warning signs flash for its results.
According to the game industry on the 31st, Nexon's maximum expected revenue this year is 4.5594 trillion won and operating profit is 1.4112 trillion won, up 13.7% and 26.4%, respectively, from a year earlier. Earlier, during its third-quarter earnings announcement, Nexon projected fourth-quarter revenue of 1.0863 trillion to 1.2133 trillion won and operating profit of 204.0 billion to 299.0 billion won. With Nexon's cumulative revenue and operating profit from the first to the third quarter at 3.3461 trillion won and 1.1122 trillion won, respectively, one can gauge this year's expected revenue. Nexon last year became the first Korea-based game company to surpass 4 trillion won in annual revenue, and it is expected to continue an upward trajectory this year.
Nexon's new titles released this year were hits and drove its results. The massively multiplayer online role-playing game (MMORPG) "Mabinogi Mobile," released in March, recorded a first-day retention rate of 61%, the highest initial response among Nexon launches, and proved long-term success with steady retention. "Maple Growth," released in Nov., is ranking No. 1 in revenue on both app stores. According to Sensor Tower, Maple Growth reached $100 million in revenue 45 days after launch. The extraction shooter "ARC Raiders" stood out in the global market. It has steadily maintained peak concurrent users in the 380,000 range, and about a month after launch, it won at the global awards "The Game Awards (TGA)."
Krafton is expected to renew record-high results, with this year's revenue at 3.09 trillion won and operating profit at 1.3010 trillion won, up 14% and 10%, respectively, from a year earlier. Although Krafton had no blockbuster hits beyond the "PUBG" series, the PUBG intellectual property (IP) has steadily trended upward, putting it in the "1 trillion won operating profit club" last year. A key contributor to Krafton's improved performance is Battlegrounds Mobile India (BGMI), a localized version released in the Indian market. Since its 2021 launch, BGMI has established itself as a national game in India, and along with "PUBG Mobile" published by Tencent, it has driven Krafton's overseas revenue.
Netmarble, which successfully rebounded last year, is expected to maintain a solid trajectory this year as well. The company's revenue this year is forecast at 2.788 trillion won and operating profit at 366.0 billion won, up 4.6% and 69.7%, respectively, from a year earlier. Following the March launch of the MMORPG "RF Online Next," the collection RPG "Seven Knights Re:BIRTH" in May and the MMORPG "Vampir" in Aug. received positive reviews. Netmarble has continued strong sales since turning to profit in the third quarter last year with "Solo Leveling: ARISE." In particular, the success of new titles based on its own IP this year reduced dependence on external IP and, according to assessments, helped build a portfolio spanning diverse genres.
NCSOFT, which recorded a loss for the first time since listing last year, has a strong chance of rebounding this year. The company's revenue this year is estimated at 1.4947 trillion won, with operating profit at 15.3 billion won. Revenue is expected to dip slightly year over year, but operating profit is likely to turn positive. The MMORPG "AION2," released in Nov., entering an early trajectory of success is analyzed as the key factor in the recovery. The introduction of its own payment system also reduced payment commission rates, positively affecting results. NCSOFT said more than 90% of total revenue for "AION2" came from PC-based in-house payments.
By contrast, Kakao Games has seen warning signs flash for its results. Kakao Games' revenue this year is projected at 473.0 billion won, down 36.1% from a year earlier, with an operating loss of 39.0 billion won, indicating a swing to the red. The failure of new titles to gain traction and delays in launches led to the decline. As the 2D action RPG "Goddess Order," released last month, appears to be underperforming, disclosures for titles slated for this year such as "Project C," "Project Q" and "Chrono Odyssey" were postponed.
Jeong Ho-yoon, an analyst at Korea Investment & Securities Co., said, "This year, the game portfolio centered on Odin suffered a steady revenue decline as intensified competition and a shrinking user base overlapped," and noted, "Projects that were slated for release, including Project Q, Project C and ArcheAge Chronicle, were delayed." Jeong added, "Despite efforts to improve profitability through restructuring and the sale of noncore divisions, fundamental competitiveness was damaged, leading to underperformance and a drop in the share price."