NC Soft Reports 'First Annual Loss', Aims for Turnaround with Global Releases

[Korea Financial Times, Kim JaeHun] NC Soft (Co-CEOs Kim Taek-jin and Park Byung-moo) has recorded its first annual loss since going public. The loss was attributed to one-time costs stemming from organizational restructuring and voluntary retirements led by Co-CEO Park Byung-moo. The company is now focused on achieving a turnaround by launching new titles aimed at the global market.

During its earnings conference call on February 12, NC Soft announced its 2024 annual and Q4 financial results, reporting consolidated revenue of KRW 1.5781 trillion, an operating loss of KRW 109.2 billion, and a net profit of KRW 94.1 billion for the previous year.

Annual revenue declined by 11% year-over-year. The company posted an operating loss due to one-time labor costs, including severance payments related to corporate restructuring, as well as increased marketing expenses for new game launches. Net profit fell 56% year-over-year due to the impact of the operating loss.

NC Soft CFO Hong Won-jun stated, "2024 was a challenging year. The large-scale restructuring efforts led to a 10% increase in labor costs, contributing to significant losses. However, these efforts were necessary to strengthen our long-term foundation. This year, we aim to overcome remaining challenges and achieve a turnaround through the release of global titles."

NC Soft aims to rebound this year by ▲enhancing the competitiveness of live service IPs to ensure stable revenue, ▲expanding user-friendly services and improving game quality, ▲developing new competitive IPs, and ▲strengthening its publishing business and global partnerships.

Co-CEO Park Byung-moo noted, "Last year, we invested KRW 60~70 billion to secure four new IPs—two in Korea and two overseas. We plan to continue investing KRW 60~70 billion annually in IP development over the next five years."

NC Soft's strategic focus this year is on the shooting game genre, with LLL, an internally developed shooter, leading the lineup. The company also plans to launch Project Tactan, an MMORTS, and Aion 2, an MMORPG, in Korea and the global market within the year.

Park further stated, "By next year, we expect to introduce around six shooter games, either developed in-house or through global investments. These titles will cater to different sub-genres, including PvP, PvE, and MMO elements, creating synergy within our publishing business."

Regarding Aion 2, Park revealed, "The game will launch in Korea and Taiwan in the second half of this year. For North America and Europe, we are adapting our strategy based on lessons learned from Throne and Liberty (TL)." He also noted that Project Tactan is in advanced development, with more details on its launch schedule expected in Q1 or Q2.

NC Soft is also focused on expanding its publishing business and diversifying its portfolio through M&A initiatives, a key growth strategy announced last year.

"Since last year, we have actively pursued M&A opportunities in mobile gaming genres that hold significant market share," said Park. "However, price gaps between sellers and buyers have delayed progress. We remain committed to investing in genres such as subculture and shooting games while also exploring opportunities in action RPGs, which we identified as an area for growth."

He added, "We are reviewing numerous potential deals and will continue our investment strategy. As previously announced, we will utilize treasury shares for M&A. If we are unable to use over 10% of our treasury shares for M&A, we will retire them. Depending on the situation, additional share buybacks and retirements may follow next year."

Kim JaeHun (rlqm93@fntimes.com)