The third-quarter performance of South Korea's gaming industry varied depending on the success of core titles and the timing of new game revenue reflections. While strong hits boosted sales for some companies, others faced profitability pressures as marketing expenses for new releases preceded actual revenue recognition.

Backed by the strong performance of its flagship titles, Nexon reclaimed the top spot in both revenue and operating profit, whereas NCSoft returned to operating profitability. However, despite improved operational figures, several game companies—including NCSoft—saw declines in net income due to foreign exchange-related losses.

Nexon Reports Record Quarterly Revenue for Core Titles; NCSoft Cumulative Revenue Crosses 2 Trillion Won

According to the gaming industry on November 13, Nexon posted consolidated third-quarter revenue of 1.2312 trillion won and an operating profit of 3718 billion won. In Japanese yen terms, revenue and operating profit increased by 17% and 11% year-over-year, respectively. With these results, Nexon reclaimed the industry leader position it had yielded to Krafton in the previous quarter.

The return to the top was driven by the MapleStory franchise and FC Online, both of which achieved record-high quarterly revenues. MapleStory's franchise revenue surged 72% year-over-year, propelled by the success of classic servers in China and Taiwan as well as the mobile game Maple Raising. FC Online also boosted average user playtime to an all-time high by improving player trading and match-making systems alongside Chuseok holiday events.

NCSoft rebounded through the strength of MMORPGs. Driven by growth from Lineage Classic and Aion 2, revenue rose 90.7% year-over-year to 6865 billion won. Operating profit turned into a black figure at 1196 billion won. Cumulative revenue for the first three quarters reached 2.014 trillion won, surpassing the lower bound of its annual revenue target of 2 trillion won.

Com2uS and Wemade Also Return to Profitability; Profitability Diverges Based on New Release Timing and Costs

The impact of new MMORPGs was also evident at Com2uS. Buoyed by the success of Zeus: God of Pride and continued growth in baseball games, revenue grew 35.2% year-over-year to 1780 billion won, while operating profit turned a profit at 139 billion won. Com2uS Holdings also returned to the black with an operating profit of 4.8 billion won, supported by new releases and platform business growth.

Wemade bounced back to a profitable quarter after just one period, supported by the reflection of a 50 billion won license contract fee for Legend of Mir 2 and 3 in China and reduced operating expenses. Its revenue stood at 1460 billion won, with an operating profit of 264 billion won. Wemade Max also reduced its operating loss by 12.2% compared to the previous quarter through increased mobile revenue and cost-cutting measures.

Companies with non-gaming businesses also expanded their outer scales. NHN recorded record-high quarterly figures with consolidated revenue of 7583 billion won and an operating profit of 588 billion won, driven by growth in its web-board game, payment, and cloud businesses. Nexters saw its revenue jump 257.4% year-over-year to approximately 32.9 billion won due to the consolidation of One Store, while its operating loss narrowed compared to the previous quarter to about 4.8 billion won.

Krafton reported an 11.6% year-over-year increase in revenue to 9714 billion won. However, operating profit fell 35.5% to 2250 billion won due to rising production costs for new titles and marketing expenses for Gamescom. Cumulative revenue and operating profit for the first three quarters reached all-time highs. In the fourth quarter, Krafton plans to maintain user inflows through a collaboration with IVE for PUBG: Battlegrounds, followed by a new mode rollout in December.

The timing of new game revenue reflections also affected results. Netmarble experienced a decline, with revenue down 8.8% to 6347 billion won and operating profit down 44.6% to 504 billion won year-over-year, as the initial sales momentum of previous quarter releases like Sol: Enchant subsided. Its key recovery challenge is retaining the user base secured at launch to drive long-term revenue.

Kakao Games, which posted revenue of 69.1 billion won and an operating loss of 26.3 billion won due to a lack of new releases, will reflect the performance of World of Dokkaebi starting in the fourth quarter. The company has set a target to turn an operating profit in the first quarter of next year, backed by the January release of Odin Q.

Foreign Exchange Pressure on Net Income; Q4 Performance Dependent on New Releases and Overseas Revenue

Exchange rate fluctuations also weighed on the net income of companies that recovered operational profitability. NCSoft and Wemade saw their net profits plummet by 94.2% and 91% year-over-year, respectively, due to foreign exchange losses and translation losses. Krafton recorded a net loss of 68.4 billion won, compounded by a drop in operating profit and foreign currency-related losses stemming from a weaker U.S. dollar.

At Shift Up, the weaker dollar amplified the decline in the Korean won-converted revenue of Goddess of Victory: Nikke. Operating profit dropped 58.2% year-over-year to 20.7 billion won, while the company posted a net loss of 25.5 billion won, reflecting foreign currency-related valuation and translation losses. In the fourth quarter, Nikke's 4th-anniversary update and the release of Stellar Blade for the Nintendo Switch 2 are expected to support revenue.

Pearl Abyss saw its revenue grow 18% year-over-year on the back of Crimson Desert's success and Black Desert's rebound, but its net profit plunged 71% due to the falling won-dollar exchange rate. Following the release of Crimson Desert's first additional content last month, the company is preparing for its Switch 2 launch in the first half of next year.

Neowiz and Wemade Play also posted net losses of 10.3 billion won and 2.4 billion won, respectively, driven by foreign exchange-related losses. Neowiz increased its operating profit by 21% quarter-over-quarter, supported by platform expansions for Lies of P. Both companies are preparing new titles for next year.

Key variables for the fourth quarter include new releases from Nexon and the expansion of overseas services by NCSoft. Alongside the continued growth of its core titles, Nexon is set to launch Overgeared (Teomppal: Overgeared) and Azur Promilia on the 26th.

NCSoft's Q4 earnings are expected to reflect the overseas performance of Aion 2, which ranked number one in global weekly sales on Steam during its launch week last month, while Kakao Games will fully reflect the steady performance of World of Dokkaebi, which has topped sales charts.

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