Webtoon Entertainment said that although revenue in dollar terms fell in the second quarter this year due to exchange rates, it continued to grow across all business institutional sector on a constant-currency basis. The company said it will move to directly commercialize webtoon intellectual property (IP), including by acquiring 60% equity in game developer RI Games Holdings for about $100 million.
Webtoon Enter said on the 10th (local time) that its second-quarter revenue was tentatively tallied at $338.5 million (about 508.0 billion won, based on the quarterly average exchange rate of 1,500.74 won). That was down 2.8% from a year earlier. However, revenue on a constant-currency basis, excluding the effects of exchange rate fluctuations, was $366.4 million, up 5.2%.
By business, advertising revenue was $471 million, up 4.2% from a year earlier. In contrast, paid content revenue generated when readers pay for webtoons and web novels fell 4.0% to $2.639 billion, and IP business revenue also decreased 2.6% to $274 million.
Webtoon Enter explained that revenue in dollar terms declined due to weak currency in its key markets, Korea and Japan, but on a constant-currency basis, all business institutional sector, including paid content, advertising, and IP business, grew. On a constant-currency basis, paid content revenue rose 4.3%, advertising 11.5%, and IP business 4.2%.
Net loss widened to $14.58 million (about 21.9 billion won), about 3.7 times the $3.9 million a year earlier. The company said increased marketing investment contributed to the larger loss. Operating loss was $15.57 million (about 23.4 billion won).
Monthly active users (MAU) in the second quarter were 156.9 million, up 0.5% from a year earlier, while monthly paid users (MPU) rose 1.8% to 7.5 million. MPUs decreased in Japan and other regions, but in Korea they increased 10.4% from 3.4 million to 3.8 million.
Webtoon Enter is also accelerating a strategy to directly commercialize IP secured on its platform into animation and games. To that end, Webtoon Entertainment signed a strategic investment agreement to acquire 60% equity in the game developer "RI Games Holdings" by deploying about $100 million of its own cash.
Kim Jun-ku, Webtoon Entertainment founder and chief executive officer (CEO), said, "This quarter we made progress on two strategic priorities that will further strengthen the flywheel of the webtoon ecosystem," and added, "With innovations such as the AI story chat 'byUs' and 'automatic translation,' we are driving deeper user engagement on the platform."
Kim added, "While we continue to experiment with AI-based initiatives such as short animation, we are advancing our IP strategy to capture more of the long-term value our ecosystem creates by expanding direct investment in IP."