NCSoft Profits Drop 60% in First Quarter of 2017

By Jeff Francis
NCSoft profits for first quarter of 2017

While playing mmo games is fun, we do have to remember that they're also a business. And it appears that business isn't exactly jumping up and down with joy this year for NCSoft, the maker of games such as Guild Wars 2 and Aion. The Korean Times is reporting that NCSoft profits are down a staggering 60% in the first quarter of 2017 when compared to the same quarter last year. The reason for the downturn? Sluggish revenue from their stable of mmo games. This has impacted the development of some of their other online games. The development team for Lineage Eternal has been canned and a new one installed, which means that we won't likely see any beta tests for that title this year.

Blade & Soul revenue

Of the drop in NCSoft profits, the Korean Times states, "Sales stood at 239.5 billion won, down 0.6 percent from a year earlier, and net profit was 17.4 billion won, decreasing also by 73.7 percent year-on-year, the game company said in its regulatory filing. The poor quarterly earnings came as a shock as they are way below the market prospect of 80 billion won in operating profit and 260 billion won in sales. Poor sales of existing online games and increased payroll on a special incentive have led to the profit decrease.

In particular, the sales generated by “Lineage,” which has been NCSOFT’s largest income source for more than a decade, stood at 51.5 billion won, down 35 percent from 78.9 billion won the year before."

The biggest generators for NCSoft earnings is Lineage, followed by Blade & Soul. Lineage 2 comes in at number three, and Guild Wars 2 comes in fourth. Aion brings up the rear for their main titles. However, the overall stock price was nor impacted as the company saw a lot of revenue from their licensing of Lineage 2 as a mobile game. In fact, you can expect to see a slew of NCSoft mobile games in the future as the company is focusing on that market as well as the VR market.

What do you think about the drop in NCSoft profits? Does this reflect an overall trend in online games being eventually surpassed by mobile games? Let us know in the comments below.

May112017

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