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NCsoft Announces Third Quarter Financial Results

SEOUL, South Korea, Friday 4 November 2005/... NCsoft® Corporation (KSE:036570.KS), the world's leading developer and publisher of online computer games, today announced financial results for the quarter ending September 30, 2005. Based on consolidated financial statements, total revenues rose to KRW (Korean Won) 87.8 billion (US$84.1 million), up 10% from KRW 79.7 billion (US$76.3 million) in the previous quarter. Operating profit was KRW 23.2 billion (US$22.2 million), up 34% from KRW 17.2 billion (US$16.4 million) in the second quarter and ordinary income was KRW 24.5 billion (US$23.4 million), an increase of 32% from KRW 18.6 billion (US$17.8 million) in Q2. Net profit was KRW 20.4 billion (US$19.5 million), up 57% from KRW 12.9 billion (US$12.3 million) during the previous quarter.

By region Korea recorded KRW 54.6 billion in revenues, which essentially remained unchanged from the previous quarter. The North American and the European Union territories recorded KRW 19.2 billion (+33% quarter to quarter) in revenues and KRW 6.4 billion (+99%) in revenues, respectively. These increases came primarily from a strong suite of released games including Guild Wars®, City of Heroes®, and Lineage® II. Revenues from Japan were KRW 7.6 billion due to the steady selling Lineage (I and II) franchise. Korea stood at 55% of total revenues, North America at 22%, Japan 9% the European Union 7%, and royalty profits stood at 7%. The ratio between Korean and overseas revenues was 55/45. The Korean to overseas ratio is getting smaller (previously 59/41) showing a continuous increase in overseas sales.

Breaking out revenues by product showed Lineage, Lineage II, City of Heroes, and Guild Wars at 35%, 36%, 8% and 21% respectively. Lineage revenues were at KRW 28.2 billion, Lineage II at KRW 26.9 billion and City of Heroes KRW 6.4 billion. Guild Wars, which was successfully launched in both North America and the European Union during Q2, sold more than one-million copies in less than five months and brought in revenues of KRW 17.0 billion with its high sales volume.

Operating profit of KRW 23.2 billion was 34% higher than the operating profit in the second quarter. Examining closely by region, the success of Guild Wars sales created a surplus for financial statements in Europe and North America. Lineage and Lineage II sales in Korea and Japan continued to increase as well.

NCsoft, for the first time in the Korean games industry, reported its quarterly numbers in the form of consolidated financial statements beginning in Q2 of 2005. The consolidated reports combine the activities of subsidiaries such as NCsoft North America, NCsoft Europe, ArenaNet and NCJapan. Revenues from operations in China, Taiwan and Thailand are regarded as royalty profit from overseas.

[Reference]

Revenues (Unit: Mil. Won)

Q3, 05 Q2, 05 3Q, 04 QoQ YoY
Total Revenues 87,756 79,780 76,589 10% 15%
Game Revenues 81,289 72,188 66,791 13% 22%
Royalty Profit 6,467 7,592 9,798 -15% -34%
Expenditure 64,576 62,540 49,196 3% 31%
Operating Profit 23,180 17,240 27,393 34% -15%
Ordinary Income 24,581 18,620 29,116 32% -16%
Net Profit 20,411 12,993 22,594 57% -10%

Note: 1USD = 1,043 KRW

About NCsoft Corporation

Headquartered in Seoul, South Korea, NCsoft Corporation is the world's leading developer and publisher of online games. Founded in 1997, NCsoft is home to Lineage, the world's most successful online role playing game and also to Lineage II, City of Heroes and City of Villains. In coming months, NCsoft is poised to launch yet another massively multiplayer title, Auto AssaultTM in addition to various casual games via its game portal, PlayNCTM. NCsoft has offices in North America, the United Kingdom, Japan, Taiwan, China and Thailand. In fiscal year 2004, NCsoft posted revenues of KRW 246 billion or approximately US$246 million. For more information about NCsoft visit http://www.ncsoft.com or http://www.PlayNC.com.

NCsoft, the interlocking NC logo, Lineage, Guild Wars, PlayNC and all associated logos and designs are trademarks or registered trademarks of NCsoft Corporation. City of Heroes, City of Villains and all associated logos and designs are trademarks or registered trademarks of NCsoft Corporation and Cryptic Studios, Inc. All other trademarks are the property of their respective owners.

Contact:

NCsoft IR

Brian Min

brian@ncsoft.net

(Korea) 82-2-2008-3330

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