If you click on a link and make a purchase we may receive a small commission. Read our editorial policy.

NCsoft 2008 profits down 15 per cent

Dip in operating profit comes despite increase in sales; publisher blames late release of Aion and marketing costs

NCsoft has reported a 15 per cent dip in profits for the 2008 fiscal year, despite an increase in net sales and an operating profit growth of 117 per cent in its fourth quarter.

The year saw NCsoft's net sales come to KRW 346.6 billion (USD 248.6 million), up 5 per cent year-on-year, while operating profit and net profit fell 15 per cent and 40 per cent to KRW 42.2 billion (USD 30.3 million) and KRW 27.2 billion (USD 19.5 million) respectively.

The publisher put down the decrease in profit, despite an increase in sales, to the delayed launch of Aion, plus marketing for the title, as well as costs associated with updates to the Lineage series.

However, the fourth quarter not only saw net sales jump 26 per cent to KRW 99 billion (USD 71.0 million), compared to KRW 78.3 billion (USD 56.2 million) the previous quarter, but also saw operating profit rocket up 117 per cent, from KRW 4.6 billion (USD 3.3 million) to KRW 9.9 billion (USD 7.1 million). Likewise, net profit came in at KRW 8 billion (USD 5.7 million), up 60 per cent the previous quarter's KRW 5 billion (USD 3.6 million).

"Launched in November, Aion exceeded expectations in a short period on the market," the company explained in a statement. "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."

NCsoft saw sales increase in all major regions the company operates in, with Korea still taking up the bulk of sales at KRW 55.4 billion (USD 39.7 million), up 19 per cent. The remaining 44 per cent of sales came from overseas, with Japan showing the most growth at 95 per cent to KRW 19.2 billion (USD 13.8 million). The North American market followed at KRW 12.2 billion (USD 8.7 million), up 21 per cent, while European sales grew 5 per cent to KRW 3.4 billion (USD 2.4 million).

Lineage and Lineage II remain the company's strongest performers, accounting for 29 per cent and 49 per cent of sales respectively. Lineage saw a growth of 9 per cent to KRW 28.9 billion (USD 20.7 million), while Lineage II grew 20 per cent to KRW 41.9 billion (USD 30.0 million).

City of Heroes and Guild Wars grew 11 per cent and 33 per cent from the previous quarter to KRW 6.9 billion (USD 4.9 million) and KRW 4.9 billion (USD 3.5 million) respectively, while sales of Aion were recorded at KRW 9.7 billion (USD 7.0 million).

NCsoft has predicted that sales will climb between 36 per cent to 44 per cent year-on-year to KRW 470 to KRW 500 billion (USD 337.1 to USD 358.6 million), with a 137 per cent increase in operating profit to KRW 100 billion (USD 71.7 million) for the 2009 fiscal year.

"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," added NCsoft's CFO Jaeho Lee.