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NCsoft Slips To Loss As Auto Assault Disappoints
by David Jenkins
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August 4, 2006
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Officials from South Korean-headquartered MMO publisher NCsoft have released details of the company’s second quarter financial results, in which NCSoft saw a small loss, despite an increase in sales, partly due to Auto Assault's disappointing market performance.
During the three months, the company reported revenues of 85.5 billion Korean won ($88.6m) on an operating income of 1.7 billion won ($1.8m), a pre-tax income of 4 billion ($4.1m) and a net loss of 200 million won ($207,000), slipping the company very marginally into the red.
The increase in sales was attributed to the successful launch of Guild Wars Factions, on top of continued strong sales for Lineage and Lineage II in Asia. The company reported that membership accounts for Guild Wars passed the two million mark during the quarter, with the largest number of new accounts of any MMO in North America and Europe - albeit for a product that is free to play in the West after buying the retail box.
The downturn in income was explained by a write-off of 12.6 billion won ($13.1m) in costs related to the failing MMO Auto Assault. Without this significant failure, then operating and pre-tax income would have grown by 64 percent on the previous quarter and fallen by a less marked 17 and 11 percent, respectively, from the same period a year ago.
Nonetheless, compared to the previous quarter, sales increased by 10 percent, with operating income falling by 81 percent and pre-tax income by 61 percent. Sales were also up by 7 percent from the same period last year, while operating income was down by 90 percent and pre-tax income by 79 percent over the twelve months.
Breaking sales down by region, domestic Korean sales totalled 52.9 billion won ($54.8m), down 3 percent on the previous year. Sales in North America and Europe grew by 10 percent and 192 percent, respectively, year-on-year. Japanese sales were largely static at 7.5 billion ($7.8m). A percentage breakdown of sales shows that almost half of all sales for the company now occur overseas, and the majority in the company's native territory: Korea with 55 percent of total sales, North America with 18 percent, Europe with 11 percent, Japan with 9 percent and royalties with 7 percent.
By game, Lineage and Lineage II posted sales of 28.5 billion won ($29.5m) and 28.4 billion won ($29.4m), unchanged year-on-year. Sales of City of Heroes/City of Villains were down 5 precent year-on-year, while sales of Guild Wars shot up by 71 percent year-on-year and by over 160 percent from the previous quarter – following the successful launch of Guild Wars Factions in the West.
Looking forward, the company revealed: "NCsoft is preparing a simultaneous global launch of the third campaign in the Guild Wars franchise, Guild Wars Nightfall, during the latter half of this year. Closed beta testing for the... MMORPG project Aion is also expected within the year." As for Richard Garriott's anticipated Tabula Rasa, no dates on possible release were announced alongside the results.
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