NCsoft quarterly numbers dip

Massively multiplayer online game publisher sees lowered revenue and profits, but tilts its full-year projections up.


Korean publisher NCsoft today announced its financial results for July through September, the third quarter of the company's fiscal year. While the company returned to profitability after a down second quarter of the year, both revenues and profits were smaller than they had been for the third quarter of 2005.

The company posted sales of 85 billion Korean won ($90.7 million) with a net profit of 12.8 billion won ($13.7 million), down from 87.8 billion won ($93.7 million) in revenue and the 20.4 billion won ($21.8 million) profit of a year ago.

The company attributed its success to sustained sales of Lineage and Lineage II (the popular Korean MMO games accounted for more than 76 percent of NCsoft's sales for the three-month period. Of the remainder, a little more than 14 percent came from Guild Wars, with more than 9 percent from the City of Heroes and City of Villains franchise. The rest of the company's active offerings--Auto Assault and the South Korean tennis game Smash Star--accounted for less than one-third of one percent of the publisher's sales.

However, for the year to date, NCsoft indicated that earnings had exceeded its initial projections, so it upped its earnings outlook for the year. The company now expects to make 339 billion won ($361.9 million), up from 330 billion won ($352.3 million), with an increase in operating income to 39 billion won ($41.6 million) from 20 billion won ($21.4 million).

The company's fourth quarter should benefit from the launch of Guild Wars: Nightfall, which NCsoft said had generated "extremely positive" early feedback. Other cited factors contributing to the company's expectations included the better-than-expected performance of the Lineage franchise, as well as "cost savings from improved operation efficiency." In June, the publisher laid off 70 employees from its Austin, Texas, studio.

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