Powered by the global success of its new title "Crimson Desert," Pearl Abyss posted a rebound in first-quarter results this year. Pearl Abyss, which had long faced a drought of new releases, saw sharp earnings volatility as it swung between profit and loss depending on the quarterly performance of its flagship "Black Desert," but after seven years of development, "Crimson Desert" has sold more than 5 million copies, setting a record for the highest quarterly results in the company's history.
If Crimson Desert continues its run through the end of the year, Pearl Abyss said annual revenue could reach as much as 975.4 billion won. That would be nearly triple last year's 365.6 billion won.
◇"Crimson Desert" sells more than 5 million copies… Pearl Abyss becomes a cash cow
Pearl Abyss said in its earnings release on the 12th that first-quarter revenue on a consolidation basis was 328.5 billion won, up 419.8% from a year earlier. Operating profit jumped 2,597.4% to 212.1 billion won in the same period. Net profit climbed 2,107.8% to 170 billion won.
Crimson Desert lifted results. The open-world adventure game "Crimson Desert," which Pearl Abyss released on Mar. 20, sold 2 million copies on its first day. It went on to sell 3 million in four days, 4 million in 12 days, and 5 million in 26 days. It is the fastest pace in the history of Korean console games.
Pearl Abyss' earnings structure, which had long centered on Black Desert, has been reorganized around Crimson Desert. By intellectual property (IP), revenue from Black Desert was 61.6 billion won and from Crimson Desert 266.5 billion won, or four times "Black Desert." Crimson Desert accounted for 81.2% of total IP revenue.
As Crimson Desert gained popularity mainly in the West, Pearl Abyss' share of overseas revenue also rose. In the first quarter, overseas revenue accounted for 94% of Pearl Abyss' total, a sharp increase from 49% a year earlier. Of that, North America and Europe made up 81%, Asia 13%, and Korea 6%. A Pearl Abyss official said, "More than 80% of Crimson Desert revenue came from North America and Europe."
Platform mix also shifted. In the first quarter, Pearl Abyss' revenue by platform was 59% PC, 38% console, and 3% mobile. The console share rose 31 percentage points from the prior quarter after the launch of Crimson Desert. Looking only at the Crimson Desert IP, console and PC each accounted for 50% of revenue. Unlike Korea's game industry, where mobile has a heavy weight, Pearl Abyss is seen as having delivered standout results in consoles and PC.
Pearl Abyss cited the technological edge of its in-house "Blackspace Engine" as one of the secrets behind Crimson Desert's success. A company representative said the game delivered strong immersion "through optimization that seamlessly renders a vast open world, realistic physics, and high-quality graphics."
◇"Focusing resources on the next title DokeV… aiming for a 2–3 year new-release cadence"
Pearl Abyss did not hold an earnings conference call that day and provided forward guidance instead. Expecting Crimson Desert's momentum to continue through year-end, the company forecast full-year revenue of 879.0 billion to 975.4 billion won. Of that, Crimson Desert IP revenue is projected at 644.1 billion to 734.8 billion won. The outlook for Black Desert IP revenue is 234.9 billion to 240.6 billion won, suggesting this year's results will rely heavily on Crimson Desert's performance.
Annual operating profit is projected at 487.6 billion to 572.6 billion won, implying a swing to profit from a year earlier.
Pearl Abyss plans to expand new sales of Crimson Desert and is also considering platform expansions and releases as DLC (downloadable content). It said the next titles "DokeV" and "Plan 8" are also in development.
A company representative said, "We aim to maintain a 2–3 year cadence for new releases and plan to concentrate resources on 'DokeV' first to speed up development," adding, "DokeV is currently in preproduction." The representative added that "Plan 8" is currently in the planning stage.
On the outlook for the second quarter, the company said, "Given the nature of package games, where sales are front-loaded, we expect Crimson Desert revenue to slow somewhat in the second quarter," adding, "We aim to maintain steady performance through continuous patches and updates." It also plans to drive revenue growth in the quarter through updates such as difficulty tuning, control improvements, boss rematches, and adding pets.