NCsoft profits drop 43 percent

Korean MMOG publisher reports drastic dip in operating income and profits.

Seoul-based online game developer and publisher NCsoft has posted a 43 percent drop in net profits for 2006. Pretax profit was 50 billion won (approx. $53.3 million), 41 percent down from the previous year, while operating profit was at 43.3 billion won ($46.1 million), down 44 percent.

The company put the drop down to "increased investment in development to expand the company's game portfolio," along with a "one-time write-off" related to the postapocalyptic massively multiplayer online game Auto Assault. Auto Assault was launched with great fanfare in the US in April 2006, as a unique take on the MMOG concept--gamers play in a futuristic armed-to-the-teeth car against mutants, scavengers, and other nasties. For more information, check out GameSpot's full review.

Although profits were down, the company's sales have been "constant" year on year, which it puts down to existing games such as Lineage and Lineage II performing strongly. Consolidated sales for the fourth quarter were 90.2 billion won (approx. $96.1 million).

Overseas sales made up 46 percent of the total, breaking down to 20 percent from North America, 12 percent from Europe, and 9 percent from Japan. NCsoft believes that the launch of Guild Wars Nightfall and an increase in the number of players of Lineage II boosted sales in the US and Europe.

NCsoft CEO Jaeho Lee said, "In preparation for growth of the global online game market, NCsoft has set up a development system with the ability to launch more than one major MMO game and several casual game titles every year. To accomplish this goal and establish a strong product pipeline, we plan on 18 percent year to year increase in the development budget this year as well. After several years of spending on development costs, we believe the fruits of those labours will finally begin paying off soon."

For the financial year 2007, the company predicted sales of between 358 and 367 billion won ($384-393 million), and operating profit of between 42 and 49 billion won ($45-52 million). MMOGs Exteel and Dungeon Runners will be released in the first half of 2007, and it is anticipated that Tabula Rasa and "a new major update" to the Guild Wars franchise will follow in the second half of the year.

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50 comments
solidsnake2050
solidsnake2050

too bad, but a new guild wars campeign is on the way, and after that guild wars 2 is on the way (sweet). but did i missread this or did NCsoft say they want to release a major mmo game every YEAR...

solidsnake2050
solidsnake2050

[This message was deleted at the request of the original poster]

ahmedtantash
ahmedtantash

cool Kind of Unfortunate because both CoH and CoV aren't bad games, and are rather just victims of WoW's popularity. I feel they should rethink thier MMO only strategy because it is going to sink them if they don't. In my opinion they might be better making both those games not pay to play and just make expansion packs every few months in stead like Guld Wars does. They might well let Auto Assault fall of the map because those games were dismal failures. But yeah,..adapt or die.

Leviaton
Leviaton

Bahh they lost so many money, big thing but they always goig up and up and up they never stop growing : "increased investment in development to expand the company's game portfolio,"

jiggily
jiggily

Holly Crap! They ONLY made about $50 Million in Profit? I remember the year I only made $50 Million. I could barely afford to make the payments on my private island.... Come on people, this headline is worse than the headlines on the 10 oclock news. How about a headline like, "NCSoft reinvests in itself instead of paying each CEO an additional $10 Mil in pay bonus' " Sorry for the Soap Box rant, but really, if they had said NCSoft lost X number of dollars on Auto Assault, but still posted a huge Profit, this article wouldn't have seemed so over the top. my 2 cents.

cjcr_alexandru
cjcr_alexandru

That's a big drop. Let's hope they will recover.

John_of_Fire
John_of_Fire

No loss of money coming in; their just putting money into new projects. Not bad, not bad at all. People who don't know this company should look at MMOs that aren't WOW and don't originate in the US.

mismajor99
mismajor99

OK ElectrolightSH, are 360 users willing to pay for a monthly fee on top of XBL in mass numbers? I don't think so. AA is a decent MMO, but NCSoft just didn't do a great job marketing it. Very unfortunate.

ElectrolightSH
ElectrolightSH

Well if they had put Auto Assault on the 360 then it would have been a huge hit.

nintendorocks
nintendorocks

Damn...that's a big drop. I think it's smart to blame Auto Assault. A bad MMO will really hurt a company.

MxO
MxO

That's a kick in the pocket book. Bummer.

Blazer88
Blazer88

Kind of Unfortunate because both CoH and CoV aren't bad games, and are rather just victims of WoW's popularity. I feel they should rethink thier MMO only strategy because it is going to sink them if they don't. In my opinion they might be better making both those games not pay to play and just make expansion packs every few months in stead like Guld Wars does. They might well let Auto Assault fall of the map because those games were dismal failures. But yeah,..adapt or die.

chevydriver1123
chevydriver1123

Im a CoV and CoH player and Im happy but this is disappointing news to hear from them. Ive also thought about getting Auto Assualt

Wezker619
Wezker619

ahhh NCSOFT can we get a FPS MMORPG from you guys yet or what.

EmperorSupreme
EmperorSupreme

@Abigorus I agree, I had a lot of fun with City of Villians for a long time, but at some point I realized they really aren't adding that much new content. Then cancelled my subscription.

comthitnuong
comthitnuong

well, i hope the auto assault game makes up for it..

chikahiro94
chikahiro94

Good to hear. I'm looking forward to seeing how this year does. Very much looking forward to seeing the next Guild Wars game.

Dace67
Dace67

I bet a CoH/CoV expansion with new stuff to do and even more choices for character creation would help out. Makes me sad to see NCsoft getting hit hard like that. They make really good games.

mismajor99
mismajor99

NCSoft is a great company with great games like Guild Wars. 40-50 mil profit is still excellent.

maihem
maihem

to datniccah187 Does Guild Wars, Lineage or city of heroes ring any bell?

datniccah187
datniccah187

Umm yea who exactly is NCsoft, and why do we care lol. I've never even heard of this game or any of these games to be quite honest. I mean i would hope they get on track because i never like to see gaming companies lose money but i guess they just need to step their game up or something. I mean you're selling videogames how can you lose money selling videogames, everyone likes videogames. As long as the games you're selling are half way decent then yea. But they appear to be moving in the right direction i think they said they're increasing their developmen budget by 18 percent, which is a good way to make better games, in turn making a profit.

darth-revan
darth-revan

Cobra5 "I hope this doesn't effect Huxley. The game is already looking "iffy", but dangit, I want a good MMOFPS already!! Its not that hard an idea, people! " they already made an MMOFPS, its called Planetside..........

Cobra5
Cobra5

I hope this doesn't effect Huxley. The game is already looking "iffy", but dangit, I want a good MMOFPS already!! Its not that hard an idea, people!

Chief_Kuuni
Chief_Kuuni

thats a huge percent, hopefully it doesn't hurt them too bad

Keen1_Te
Keen1_Te

"I think Burning Crusade had something to do with it to" Or maybe you should actually read the article... it was the numbers for 2006. BC was released in 2007.

zalb
zalb

Bah, auto assault was one of the finest MMO's I've played, the solo was fun and the PvP was exellent.

Abigorus
Abigorus

They try to release too many MMO's. If they stuck to 1-2 and worked on them more, I think they'd make much more.

Autokiller
Autokiller

43% in loss.... dude that is hardcore

bloodyrooster
bloodyrooster

NCsoft has some really good mmos. They took a risk, which is never bad, with auto assault. The game really wasn't that good, but hopefully the same mistake won't be repeated again.

BetMonty
BetMonty

Why slam AA? It's a niche game, it's not for everyone... That should have been obvious even to the blindingly ignorant. Does NCSoft really expect its shareholders to believe that that one single game is the reason for all their doom and gloom? Where's Tabula Rasa? What happened to Anark or whatever it was called? Why keep blaming the niche title you knew wasn't going to be a hit, when there are a million real problems hidden behind it? Oh, right, AA actually shipped, the rest *still haven't.* NC really needs to get its act together. Maybe they should try spening more time supporting the game that shipped and released, making it better, then time throwing money at games that are now literally years over-due.

Pastehunter
Pastehunter

I think Burning Crusade had something to do with it to :lol:

Xaioling
Xaioling

Exteel could be interesting to Mech fans out there but Dungeon Runners looks very similar to Warcraft but I am not really a fan of NCsoft I tried several times but didn't last long.

blacktorn
blacktorn

Auto assault is crap,NCsoft make rubbish games imo,when comapred to the competition anyway

vaejas
vaejas

A.A. is basically RoadBlasters Online with duct tape mining. Yeah, as exciting as it sounds.

Doolum
Doolum

As far as i know NCSoft is a good Co.

timts
timts

original guild wars took too much of my time so I never went into any of the expansion pack.

Targzissian
Targzissian

The "new major update" to Guild Wars will actually improve some on the graphics engine, utilizing the newest version of DirectX 9, from what I heard. Of course, it's nothing like moving to DirectX 10, but Vista still doesn't have that many users. Tabula Rasa has a lot of potential, largely because of the involvement of Richard Garriott of the Ultima franchise. Lineage II is a grind, but still has some of the sexiest female dark elves in online gaming. I have my doubts about Dungeon Runners, and I'm not sure what to make of Exteel. Good luck NCSoft... It's either you or SOE I guess.

drgnstr13
drgnstr13

I hope they do better this year.

bossjimbob
bossjimbob

"and 'a new major update' to the Guild Wars franchise will follow in the second half of the year." :)

JFreezy02
JFreezy02

Why didn't they mention City of Heroes or City of Villians? I think those are two incredibly fun games!