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NCsoft Reports Increased Sales, Lowered Income for 2008

Posted Fri, Feb 13, 2009 by Cody Bye

Officials at NCsoft have sent over the companies fourth quarter and year-end earnings report for 2008. While the company posted an increase in sales, it also shows a loss in income compared to the year previous. Here the official document:

NCsoft® Corporation (KSE: 036570.KS) today reported earning results for 2008. On a consolidated basis, sales came to KRW 346.6 billion (US$ 248.6 million), operating profit KRW 42.2 billion (US$ 30.3 million), and net profit KRW 27.2 billion (US$ 19.5 million). Sales increased 5% year over year, and operating profit, pre-tax profit, and net profit decreased 15%, 31% and 40% respectively.

For the fourth quarter 2008, consolidated net sales recorded KRW 99 billion (US$ 71.0 million), operating profit KRW 9.9 billion (US$ 7.1 million), pre-tax profit KRW 13 billion (US$ 9.3 million), and net profit KRW 8 billion (US$ 5.7 million). The previous quarter sales were KRW 78.3 billion (US$ 56.2 million), operating profit KRW 4.6 billion (US$ 3.3 million), pre-tax profit KRW 8.9 billion (US$ 6.4 million), and net profit KRW 5 billion (US$ 3.6 million). The sales and operating profit increased 26% and 117% respectively quarter over quarter and pre-tax profit and net profit increased 46% and 60% respectively.

Decrease in profit despite the increase in sales is primarily due to limited market exposure for Aion™, which launched later than expected in Korea, as well as increased marketing spend for the Aion launch and updates to the Lineage® series. Launched in November, Aion exceeded expectations in a short period on the market. This, plus the growth in Lineage series sales in Japan and the foreign exchange rate were the primary reasons for the quarter over quarter sales growth.

By region, fourth quarter sales came to KRW 55.4 billion (US$ 39.7 million) in Korea, KRW 19.2 billion (US$ 13.8 million) in Japan, KRW 12.2 billion (US$ 8.7 million) in North America, KRW 3.5 billion (US$ 2.5 million) in Taiwan, and KRW 3.4 billion (US$ 2.4 million) in Europe. Compared to the previous quarter, Korea, Japan, and North America recorded 19%, 95% and 21% increases respectively. The percentage breakdown of sales by region shows 56% in Korea, 19% in Japan, 12% in North America, 4% in Taiwan, 3% in Europe, and 5% from royalty income. Of total sales, 44% was derived from overseas.

By game titles, sales of Lineage, Lineage II, City of Heroes®/® and Guild Wars® increased 9%, 20%, 11%, and 33% quarter to quarter to KRW 28.9 billion (US$ 20.7 million), KRW 41.9 billion (US$ 30.0 million), KRW 6.9 billion (US$ 4.9 million) and KRW 4.9 billion (US$ 3.5 million) respectively. Sales of Aion recorded KRW 9.7 billion (US$ 7.0 million). The percentage breakdown of sales by game title shows Lineage, Lineage II with 29% and 42%, respectively, followed by Aion with 10%, City of Heroes/City of Villains with 7% and Guild Wars with 5%.

NCsoft expects to reach a 36% to 44% year to year increase in sales to KRW 470 to 500 billion (US$ 337.1 to US$ 358.6 million), and 137% increase in operating profit to KRW 100 billion (US$ 71.7 million) for fiscal 2009.

NCsoft's CFO Jaeho Lee said, "We anticipate full scale growth in 2009 based on the successful launch of Aion in Korea and the upcoming launch of the product in territories worldwide."

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