Major domestic game companies are expected to post solid report cards on the back of resilient performance by their flagship IP (intellectual property) and the success of big new titles last year. Nexon is projected to deliver an all-time high with sales in the 4 trillion won range last year, while NCSOFT and Netmarble, which had been struggling, are expected to swing to profit thanks to new releases. However, beneath the rosy outlook for headline growth lies a deep structural risk of user attrition and a sharp drop in market capitalization.
◇ Earnings season opens… numbers recover on new-release effects
According to the game industry on the 2nd, major domestic game companies will begin announcing last year's fourth-quarter results starting with Netmarble on the 5th. On the 10th, NCSOFT will release its report card, and on the 11th, Nexon, Krafton, Kakao Games and Wemade are scheduled to announce results. On the 12th, NHN and Pearl Abyss will follow with their earnings. It will be a venue to confirm the "harvest" from last year's hit releases while gauging each company's strategy for this year to break through the headwind of declining users.
Nexon, the industry's elder statesman, is cited as the driver of last year's earnings growth. According to securities firms, Nexon's sales last year are estimated at 4.5594 trillion won, up 13.7% from a year earlier, with operating profit at 1.4112 trillion won, up 26.4%. In addition to stable revenue from existing IP such as "MapleStory," new titles including "ARC Raiders" and "MapleStory Idle" performed well in global markets. However, analysts say the full-refund measure following the recent controversy over alleged manipulation of probability in "MapleStory Idle" will impose a significant expense burden on first-quarter results this year.
Boosted by successive hits of new titles based on its own IP such as "Seven Knights Re:BIRTH" and "Vampir," Netmarble's annual operating profit last year is projected to surge more than 60% from the previous year's 215.6 billion won to reach 345.4 billion won.
NCSOFT, which struggled after posting its second annual operating loss since its founding in 2024, rebounded on the success of "AION2," released in Nov. last year. AION2 drove results by surpassing 100 billion won in cumulative sales in just 46 days after launch, and NCSOFT is widely expected to swing to profit with 24.7 billion won in annual operating profit last year. Krafton is also expected to top 3 trillion won in sales and defend its "1 trillion won operating profit club," backed by the robust growth of the "PUBG" IP.
◇ Tasks remain despite earnings recovery… user base wobbles
Within the industry, there are considerable concerns about whether these results will translate into sustainable growth. According to a survey by the Korea Creative Content Agency (KOCCA), last year's game usage rate in Korea was 50.2%, the lowest since related statistics began. The usage rate, which was 74.4% in 2022, plunged in just three years. Among those who left, 86.3% chose viewing-centric content such as online video services (OTT), movies and short-form videos as alternative leisure. As consumption patterns shift toward lighter content over games that require long engagement, the revenue formula centered on MMORPGs (massively multiplayer online role-playing games)—"the longer you stay logged in, the stronger you get"—is seen as wobbling.
This sense of crisis is also evident in market indicators. The market capitalization of seven major listed domestic game companies has evaporated by about 4 trillion won over the past year. It is interpreted as the result of losing market trust amid uncertainty in new-release performance and slowing sales of core IP. Kakao Games, focused on publishing, has been hit head-on by a lack of new titles and declining sales of existing games, with losses expected for five consecutive quarters. Pearl Abyss, too, is seen as having its future earnings trajectory and survival strategy hinge on whether "Crimson Desert," set for release in Mar., becomes a hit.
In response, game companies are treating this year as a point to redesign from a "zero base," betting their survival on diversifying genres and expanding platforms. This is because it is no longer easy to find a breakthrough by repeating the existing success formula alone. NCSOFT is working to reshape its portfolio toward non-MMORPG genres such as shooters, action and subculture titles, while Netmarble has positioned "The Seven Deadly Sins: Origin," spanning mobile and console, as its biggest ambition this year.
A representative at a major game company said, "Even before the usage statistics came out, we already felt it internally," and added, "We know that the old ways no longer grow the user base, so rather than asking whether we are making good money now, the mood is to worry more about how many more years this structure can last."