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.


Lineage: The Blood Pledge
Tabula Rasa
City of Heroes

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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