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NCsoft's tumbling Q2 profits balanced by Lineage M success

Sources claim mobile title was earning a peak of $11.5 million a day in its first month in South Korea

NCsoft's profits fell by 66% in the second calendar quarter, though the successful launch of Lineage M promised great things for the Korean publisher in mobile.

In the three-month period ended June 30, 2017, NCsoft earned ₩258.6 billion ($229 million) in revenue, 8% higher than the same quarter last year. However, net profit declined 66% to ₩30.8 billion ($27 million).

Rising costs played a significant role in the company's disappearing profits, with Labor Costs, for example, rising ₩22.1 billion ($19.6 million) over the prior year. However, the most significant increases were Distribution Fees, which increased from ₩112 million in Q2 last year to ₩28.7 billion ($25.4 million), and Marketing Costs, which rose from ₩5.1 billion to ₩24.1 billion ($21.4 million).

These higher costs were in part down to one of NCsoft's most significant products of recent years: Lineage M, which launched in South Korea on June 21. Despite launching less than ten days before the end of the accounting period, Lineage M contributed the majority of NCsoft's ₩93.7 billion ($83.1 million) mobile game revenue. In Q2 last year, the company earned just ₩183 million from smartphone games.

According to a report in the Korea Times, Lineage M has set revenue records for a smartphone game in South Korea: ₩13 billion ($11.5 million) in daily revenue as of July 1, with a source claiming the game had earned at least ₩250 billion ($222 million) in its first month.

Elsewhere, NCsoft's portfolio was a story of decline. Revenue from all of its major PC MMOs fell year-on-year: Aion, Guild Wars 2, Blade & Soul, Lineage 2 and, steepest of all, Lineage, which appears to have suffered from the launch of Lineage M.

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Matthew Handrahan avatar
Matthew Handrahan: Matthew Handrahan joined GamesIndustry in 2011, bringing long-form feature-writing experience to the team as well as a deep understanding of the video game development business. He previously spent more than five years at award-winning magazine gamesTM.
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