NCSoft in the red for 1st time in 26 years
Korean game developer NCSoft reported its first operating loss last year since 1998, the year after its founding, primarily due to the declining performance of its core game series along with downsizing costs.
According to the company's earnings report on Wednesday, its sales revenue dropped 11 percent to 1.6 trillion won ($1.1 billion) in 2024 compared to the previous year. It posted an operating loss of 109.2 billion won, a sharp decline from a 137.3 billion won profit in 2023.
NCSoft attributed the loss to one-off expenses, including retirement severance -- reportedly over 100 billion won -- incurred during restructuring, as well as increased marketing costs for new game launches and live operations, which deliver new features, updates, promotions and in-game events.
'Early last year, our headquarters (in Seongnam, Gyeonggi Province) had nearly 5,000 employees. Since spinning off four studios, this number has been reduced to 3,100, with 1,000 employees moving to subsidiaries and approximately 800 to 900 leaving through voluntary retirement programs,' said NCSoft Co-CEO Park Byung-moo during a conference call. 'We do not plan to undertake restructuring with specific targets. Instead, our focus will be on continuously reshuffling to enhance efficiency.'
By region, sales in Korea reached 1 trillion won, accounting for 65.6 percent, followed by 227.5 billion won in Asia and 134.2 billion won in North America and Europe.
In response to public criticism of NCSoft's recent game releases, particularly regarding a lack of high-quality features, Park noted that this year's key strategy is to improve the quality and marketing efficiency of each game launch. This includes eliminating technical glitches and assessing games through extensive communication with users.
NCSoft also aims to diversify its portfolio by developing new game series and expanding its publishing business by acquiring new game companies. To penetrate global markets, the company will release new games across various genres, such as MMORPGs, shooters, strategy games and subculture-themed titles.
'Last year, we launched 'Throne and Liberty' targeting the North American and European markets and found a significant number of potential MMORPG users overseas, noticing a lack of supply in this genre,' he said. 'With the game surpassing 7 million users globally, it's evident that introducing more MMORPGs could stimulate market growth.'
Park highlighted the role of artificial intelligence in achieving cost-efficient game localization overseas and stated that the company will explore new business opportunities with its AI-driven game data analysis tools.
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