NCsoft Q2 revs rise, profits plunge

Home region again bolsters Korea-based MMOG publisher's fiscal performance, as revenues hit $78 million with net income falling off 42 percent.

As a company devoted to massively multiplayer online role-playing games, NCsoft has its work cut out for it in 2008, thanks to a number of new strong competitors. With Funcom's Age of Conan: Hyborian Adventures the first to broach the 1 million mark since Activision Blizzard's World of Warcraft, the publisher will have to contend with WOW: Wrath of the Lich King, not to mention Mythic Entertainment's newest entrant, Warhammer Online: Age of Reckoning.

That being the case, the Korea-based publisher today announced that revenue for its second fiscal quarter saw a 7 percent year-over year uptick to KRW 81.2 billion ($78 million). NCsoft attributed the windfall in sales during its April-June quarter to a successful campaign to shut down unauthorized, private Lineage servers as well as the launch of Lineage II Garcia Part 1.

Unsurprising given their continued popularity in Korea, Lineage and Lineage II amounted for the bulk of NCsoft's revenue, generating a respective KRW 28.1 billion ($27 million) and KRW 34.7 billion ($33 million). Those games greatly outpaced the publisher's remaining offerings, with City of Heroes/Villains pulling in KRW 5.7 billion ($5.5 million), Guild Wars churning out KRW 5.1 billion ($4.9 million), and Richard Garriott's Tabula Rasa posting a mere KRW 2 billion ($1.9 million).

With revenues up, NCsoft said that profits were down across the board. Operating income fell 25 percent year-over-year to KRW 7,969 million ($7.7 million), while net income plunged 42 percent to KRW 6,121 million ($5.9 million). NCsoft attributed its tightened gains to a continued reinvestment in development studios and personnel within the company.

MMOG-happy Korea accounted for the bulk of NCsoft's sales, with more than 58 percent of the company's revenue being derived from that region. Of the remaining 42 percent, NCsoft pulled in 13 percent from both North America and Japan, 6 percent from Europe, and 4 percent from Taiwan. The publisher scooped up the final 6 percent from unspecified royalty income.

"In order to maintain our ongoing development cycles and a diverse game portfolio, multiple games are in development currently across all NCsoft studios," commented NCsoft chief financial officer Jaeho Lee. "We anticipate publishing these new titles within the next two to three years, during which we believe we'll maintain NCsoft's status as a leader in the global on-line game market."

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29 comments
Docthebutcher
Docthebutcher

what ncsoft calls a profit is small. Lineage 2 is a Dead game I know I played it was dying when i finally quit. It has fewer then 1500 people on any given server at any given time. EXCEPT for ncsofts farmers if those were removed the numbers would drop to around 500 actually players. Thats success 3 years ago they were barely hitting 3000 on SOME servers and 1500 on the lesser ones. Lineage 2 servers can handle 6000 and they havent seen that since it was launched. I have noticed many games blaming WOWs unmatched success for their failures lol love it or hate it they make 100 million+++ a month just of WOW subscribtions. NCSOFT is epic failure anymore

Kyotain
Kyotain

At gsnmaster: I believe that Guild Wars gained much of its appeal from the simple fact that it had no monthly fee. Even if it were a single dollar a month, the game would lose that large factor. $5 or $10 a year could help to curb the rest of the MMO-market if it worked well, but people will still be willing to pay whatever price for WoW, Conan, and Warhammer. Free, however, is the best price. Guild Wars and private servers for the win (and for cheap people, like myself).

burn6
burn6

i agree with vortex, guildwars2 should be more improved, and perhaps add something to the existing guildwars because getting max titles are driving me nuts. AB and random arenas and other pvp contents are also getting redundant, we need new contents. And more armor sets please! or more customizations!

gsnmaster
gsnmaster

I agree with aura_enchanted. Though it seems to me, after reading through the design goals for Guild Wars 2, that NCsoft is aiming for a more MMO styled Guild Wars. Something I will personally be pissed at, as I hate MMOs. And would you look at this; Guild Wars, with no monthly fee, seems to be having notable finiancial success against even other MMOs, and that's without monthly fees. Should they add monthly fees, I wonder how much more money they would make?

aura_enchanted
aura_enchanted

as a heads up they have an error on gamespot here if anyone significant reads this, when u search guildwars 2 it says release date tba 2008, as if it was coming sumtime b4 the new year but we havent even smelt a beta yet and were 4 months away. change it 09/10 already.

aura_enchanted
aura_enchanted

vortex guildwars was never about trying to be an mmo, hence why gamespot has it under the online rpg category not the massively multiplayer. justifying what your saying is like trying to compare bladurs gate or diablo 2 to say world of warcraft. it just cant be done.

DiscGuru101
DiscGuru101

It's all about Aion: Tower of Eternity. -So City of Heroes had over a quarter million paying accounts. I would say less than 1/3 of those people are still actively playing.I am hoping GW2 has cutting edge graphics and improved AI.

vortex_gw
vortex_gw

If GW2 doesn't have mounts, jumping, crafting etc. all the things which GW lacks, I'm not buying it. Useless PvE after you beat the games is horrible. Yeah the PvP is great but If they don't deliver the things mentioned above, games like AION, Warhammer Online, the new WOW exp. and the fixed AoC will take all the MMORPG gamers. GW gets boring after 600 hours, max 800hours.

AttilaGS
AttilaGS

If GWII will be anything like GW was when it was new, I forsee a great future for NCSoft. I just hope they stick with what worked in GW because I dont want to feel like I'm playing a whole new game. I really loved GW and hope GWII can top it.

_AbBaNdOn
_AbBaNdOn

North america only contributes part of 14%?? That sucks. They need to advertise thier City Of franchise more here. City Of is the MMO I want to play the most when I eventually get back into mmo's.

snoopy248
snoopy248

"In order to maintain our ongoing development cycles and a diverse game portfolio, multiple games are in development currently across all NCsoft studios," Guild Wars 2 anybody? :D

jazilla
jazilla

Guild Wars 2 is going to change the way MMO's are played. This game will change everything.

Godan200
Godan200

GW2 Is gana be amazing... All the old style of guild wars wit some new spice punched in. Only thing is... We cnt bring our good guys from GW1 to GW2 cause they will be raising the Lv cap. SHOULD BE AMAZING CNT WAIT!

Baraxis
Baraxis

Frankly, I want Guild Wars 2 when it's ready. Let NCsoft take their time, and make it super awesome.

Philip123456
Philip123456

I want GW2 as well, funny that GW has made no new games in 08 yet they beat Tabula Rasa by a lot, and GW has no subscription fee. Tabula must be going down.

Poki3
Poki3

@ Zloth2 AnetaNet is so busy with development on Guild Wars 2 that they don't even have much time to work on Guild Wars 1, let alone totally different game that they didn't develop. False as hell.

MrLions
MrLions

Guild wars not being P2P and no new Guild wars expansions FTL

Timbydude
Timbydude

Um...that's probably because there hasn't been a new Guild Wars game in a while. If you release a new one, expect those profits to go right back up.

masterclone
masterclone

Release Aion and profits will rise .. Althou it's been real quiet about that game for a while now. :(

ZippyDSMLee
ZippyDSMLee

MMOs are deflating alil, I ahte paying for grind and people are slowly getting tired of grind. Champions online comes out soon I hope tis not grindtastic....

jackrocks123
jackrocks123

hasn't NCsoft signed and exclusive deal with sony, look it up if you don't believe me. maybe that will bring more profits?

Zloth2
Zloth2

There's a rumor floating around that Tabula Rasa's devs are getting booted and the game is being given over to Arena Net (Guild Wars) development. No named source for it, though, so take this with a grain (or better yet, a pillar) of salt.

chikahiro94
chikahiro94

They're still profitable, and that's what matters. COH's numbers went up a bit, as did TR's, amazingly enough. Looking forward to COH i13! :)