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NCsoft revs up, profits down

Korean market continues to drive MMO publisher's numbers, but foreign markets making progress.


NCsoft has released its third quarter financial results, and the results are positive, depending on how one chooses to look at the numbers.

In its report, NCsoft compared its figures to those form its second quarter this year, and from that perspective, the numbers are great. Total revenues are up 10 percent from Korean Won (KRW) 79.7 billion ($76.3 million) to KRW 87.8 ($84.1 million), while net profits rose 57 percent from KRW 12.9 billion ($12.3 million) to KRW 20.4 billion ($19.5 million).

However, had the company compared its numbers against those from the same period of time last year (which would account for seasonal trends), it would have touted even higher revenues, but lower profits. Revenues for this quarter were actually 15 percent higher than the KRW 76.5 billion ($73.3 million) the company reaped in the third quarter last year, but net profits were down 10 percent from KRW 22.6 billion ($21.7 million).

The company's report also indicated that its profits, while still dominated by income from the Korean market, are becoming more diverse in origin. Korea accounted for 55 percent of the company's total revenues this quarter, with North America contributing 22 percent, Japan 9 percent, and the European Union 7 percent. The remaining 7 percent was attributed to royalty profits. Previously, Korea had accounted for 59 percent of the company's business.

The games making up the bulk of NCsoft's business might also come as a surprise. Of the four massively multiplayer online products the company currently offers, City of Heroes only accounts for 8 percent of the company's revenue. The subscription-free Guild Wars, launched in April of this year, fares a little better, representing 21 percent of NCsoft's take. Lineage II brings in 36 percent of the bacon, only slightly more than the 35 percent credited to the original Lineage, which was originally released in Korea in 1998.

In its last year-end financial statement, NCsoft labeled the fourth quarter as "typically a low-demand season," but this October's launch of its City of Heroes' counterpart, City of Villains, might help mitigate any slump in business to close out the year.

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