NHN has recovered a portion of its profit and loss structure, emerging from the shock of the TMON and WeMakePrice incident that had hindered it since last year. In the first quarter of 2025, the payment and technology institutional sectors drove performance improvements, resulting in enhanced operating profit. However, the gaming institutional sector, once a flagship business, continues to show stagnant trends. Analysts suggest that for NHN to regain its standing as a 'gaming powerhouse,' success with new titles is essential.
NHN announced on the 13th that it recorded consolidated revenue of 600.1 billion won and operating profit of 27.6 billion won for the first quarter of 2025. While revenue fell by 0.7% compared to the same period last year, operating profit increased by 1.3%, indicating a trend towards improving profitability. The operating profit margin rose by 0.7 percentage points to 4.6% compared to the previous quarter.
The improvements in performance were driven by the payment and technology institutional sectors. In the payment institutional sector, NHN Payco expanded its B2B employee welfare solutions, and NHN KCP achieved stable transaction volume growth, recording 290.3 billion won in revenue, up 4.2% year-on-year. Notably, Payco reduced losses by 33% from the previous quarter through the streamlining of unprofitable businesses, and transaction volumes for employee welfare solutions increased by 24% compared to the previous year.
An Hyun-sik, CFO, noted during the earnings announcement conference call that 'the improvement in the profitability of non-core subsidiaries such as Payco is conservatively expected to be 15 billion won, and could exceed 20 billion won with rapid execution,' adding that 'profit and loss could recover quickly depending on the pace of restructuring.'
The technology institutional sector also achieved revenue of 105.6 billion won, a year-on-year increase of 11.0% thanks to the growth of NHN Cloud and NHN Dooray. Dooray has been expanding its client base, primarily focusing on public institutions and the financial sector, and has successfully been introduced into eight affiliates of the Woori Financial Group since being designated as an innovative financial service for domestic collaboration tools.
Kim Dong-hoon, CEO of NHN Cloud, stated, 'In the first half of the year, we secured 25% of the total volume in the high-performance computing support project in collaboration with the KT consortium and started supply in May,' adding, 'For the second half, 40% of the increased budget of 23.4 billion won is planned for projects utilizing the Gwangju AI Data Center, and we will actively respond to government-led AI and HPC business acquisitions.'
In contrast, the gaming institutional sector has shown a slowing growth trend, indicating a need for strategic transformation. First-quarter gaming revenue was 119.6 billion won, down 1.9% compared to the same period last year. While web board games maintained a stable flow due to the seasonal peak period and the effect of the 'Hangame Poker Championship,' the absence of new mobile games has been burdensome. In the Japanese market, 'Line Disney Tsum Tsum' ranked second in iOS revenue following its 11th-anniversary event, and 'Yokai Watch Punipun' achieved double-digit growth through a collaboration with Hololive, but this was insufficient to boost overall institutional sector performance.
Jeong Woo-jin, CEO of NHN, said, 'Starting from the first quarter of 2025, we will reorganize the existing five institutional sectors (gaming, payment, advertising, commerce, technology, content) into gaming, payment, technology, and others, enhancing our focus and concentration strategy on core businesses.' He added, 'Web board games are showing a solid flow based on a fixed user base, and we are preparing for a rebound in mobile games based on the achievements of IP collaborations in the Japanese market.'
In particular, NHN is aiming for a turnaround in the gaming institutional sector this year, propelled by significant new titles. The shooting RPG 'Darkest Days,' which started its global open beta at the end of last month, is set for official release in June, while the subculture collectible RPG 'Abyssdia' is planned for introduction in the third quarter in the Japanese market. Additionally, a three-match puzzle game 'Project STAR' utilizing the popular manga 'My Favorite's Kid' is under development with a target release in Japan in the second half of the year.
NH Investment & Securities stated, 'Although the investment sentiment improved as the WeMakePrice incident that NHN faced in the Payco institutional sector was resolved last year, without a clear rebound in the gaming institutional sector, there are limitations to medium- to long-term growth,' adding that 'the success or failure of Darkest Days and Abyssdia will determine NHN's performance in the second half.'