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NCsoft profits drop 43 percent

By Emma Boyes, GameSpot UKPosted Feb 7, 2007 8:37 am PT

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.

50 Comments

  • solidsnake2050

    Posted Mar 29, 2007 7:59 pm PT

    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...

  • ahmedtantash

    Posted Feb 13, 2007 5:51 am PT

    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

    Posted Feb 13, 2007 5:07 am PT

    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

    Posted Feb 8, 2007 7:56 pm PT

    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

    Posted Feb 8, 2007 3:56 am PT

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

  • John_of_Fire

    Posted Feb 7, 2007 9:12 pm PT

    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

    Posted Feb 7, 2007 9:02 pm PT

    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

    Posted Feb 7, 2007 8:40 pm PT

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

  • nintendorocks

    Posted Feb 7, 2007 8:28 pm PT

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

  • MxO

    Posted Feb 7, 2007 8:17 pm PT

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

  • VladimirCrow

    Posted Feb 7, 2007 6:19 pm PT

    Who?

  • Blazer88

    Posted Feb 7, 2007 3:22 pm PT

    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

    Posted Feb 7, 2007 3:05 pm PT

    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

    Posted Feb 7, 2007 2:39 pm PT

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

  • EmperorSupreme

    Posted Feb 7, 2007 2:16 pm PT

    @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

    Posted Feb 7, 2007 2:16 pm PT

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

  • chikahiro94

    Posted Feb 7, 2007 2:13 pm PT

    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

    Posted Feb 7, 2007 2:05 pm PT

    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.

  • anarchicgoth

    Posted Feb 7, 2007 2:03 pm PT

    i dont care really

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