Game companies' results are diverging depending on the "speed of recouping" the marketing expense they pour in for new releases and large updates. Netmarble saw sales increase in the second quarter on the back of new titles, but its operating profit fell by more than 20% as marketing expense surged. In contrast, Krafton raised operating profit by 67% to a record high for a second quarter even after increasing marketing expense by more than 70%. Some analysts noted, however, that the effect of marketing for new releases can show up in subsequent quarters, making it hard to judge success or failure based on short-term results alone.
On the 7th, the game industry said Netmarble's second-quarter sales this year were 749.2 billion won, up 4.4% from a year earlier. Operating profit was 80.1 billion won, down 20.8%. The operating margin fell 3.4 percentage points (P) from 14.1% in the second quarter of last year to 10.7% this year.
◇ Diverging profitability despite expanded marketing
One factor behind the worsened profitability was the increase in marketing expense timed to new releases. Netmarble's second-quarter marketing expense was 183.5 billion won, up 35.5% from a year earlier. That far outpaced the sales growth rate of 4.4% in the same period.
Netmarble expanded marketing with the April launch of "MonGil: Star Dive" and the June launch of "Sol: Enchant." But MonGil: Star Dive failed to sustain its early momentum, and Sol: Enchant debuted in June at the very end of the quarter, making it hard for sales to be fully reflected. Each of the two games accounted for only 3% of total second-quarter sales.
An increase in marketing expense during a new-release window does not necessarily mean profitability will worsen. Krafton also sharply increased marketing expense in the same period. Second-quarter marketing expense was 44.9 billion won, up 72.3% from 26.1 billion won a year earlier. This was due to consolidation of Neptune and increased spending related to the live service and collaborations of the new "Subnautica 2" and "PUBG: BATTLEGROUNDS."
However, unlike Netmarble, Krafton's second-quarter operating profit rose 67% to 410.9 billion won, the highest ever for a second quarter. Sales also hit a record at 1.2902 trillion won, up 94.9%.
Both existing games and new titles delivered results on the strength of marketing. First-half sales of the "PUBG" IP franchise rose 25% from a year earlier, and "Subnautica 2" surpassed 5 million units sold 22 days after its early access launch. Although marketing expense increased significantly, game sales grew alongside it, sharply lifting operating profit.
◇ Sales up but profit down… Devsisters' prolonged expense burden
There have been past cases where expanded marketing expense and higher sales did not immediately lead to improved profitability. Devsisters spent 69.7 billion won on advertising and promotion last year—more than triple the 22.1 billion won in 2024—to expand the global reach of existing Cookie Run games and its intellectual property (IP).
As a result, sales rose 25% year over year to 294.7 billion won, but operating profit plunged 77% to 6.2 billion won in the same period. With losses continuing this year in particular, Devsisters entered an emergency management system after posting an operating loss in the first quarter. The company is cutting labor costs, including returning compensation by key executives, and imposing companywide expense controls, including marketing expense.
However, it is difficult to conclude that marketing effectiveness is low just because operating profit stagnates immediately after a new release. This is because the effect of early investment can appear in subsequent quarters. Nexon expanded marketing expense last year in line with new releases such as "ARC Raiders" and "MapleStory: Idle RPG." Last year, sales rose 6% from a year earlier to 475.1 billion yen, a record high, but operating profit was 124 billion yen, roughly the same as 124.2 billion yen the previous year.
The picture changed in the first quarter of this year. As the strong run of "ARC Raiders" continued and the marketing expense that had been concentrated around launch eased, sales and operating profit rose 34% and 40%, respectively, from a year earlier, both hitting an all-time quarterly high.
◇ Hard to judge by the launch quarter alone… watch follow-up sales
Game companies typically ramp up advertising around new releases or major updates to increase user inflows. Marketing effects can show up as more downloads and concurrent users, but the timing of when that turns into actual sales and profit can vary depending on user retention and conversion to paying users. For this reason, the industry says it is hard to assess marketing performance based on launch-quarter results alone.
A game industry official said, "Because how many users you secure early after launch has a big impact on long-term success, a certain level of marketing investment is inevitable," adding, "Rather than judging marketing efficiency based only on launch-quarter results, you need to look at subsequent user retention and the sustainability of sales as well."