The first quarter performance of mid-sized game companies, which are the 'waist' of the domestic gaming industry, was mixed. Unlike large game companies that are attempting to diversify genres, the role of a single popular intellectual property (IP) created contrasting fortunes. The mid-sized game companies that struggled in the first quarter are strategizing to rebound in performance through the release of new titles in the future.
◇ League season launch and game rebound… Various reasons prove 'IP' power
According to the gaming industry on the 18th, Com2uS recorded a revenue of 168 billion won and an operating profit of 1.7 billion won in the first quarter, marking increases of 6.5% and 44.3%, respectively, compared to the same period last year. Devsisters reported a revenue of 89.1 billion won and an operating profit of 9.4 billion won in the first quarter, showing growth of 49.7% and 16.0%, respectively, compared to the same period last year. MGAME recorded a revenue of 27.1 billion won and an operating profit of 6.5 billion won in the first quarter, achieving growth of 39.8% and 61.8%, respectively, compared to the same period last year, with its revenue being the highest for any first quarter to date.
In the case of Wemade, the revenue in the first quarter was 141.8 billion won, a decrease of 12.1% compared to the same period last year, but the operating loss improved to 11.3 billion won. Gravity recorded a revenue of 137.5 billion won and an operating profit of 24.7 billion won in the first quarter, with revenue increasing by 14.8% compared to the same period last year, while operating profit declined by 8.1%.
The increase in revenue for these game companies was primarily attributed to the global performance of popular IPs. Com2uS, a strong player in 'baseball games', had titles based on domestic professional baseball (KBO) and Nippon Professional Baseball (NPB) supporting its performance. With the effect of the league season launch reflected, the revenue from sports games grew by 21.3% to 51.6 billion won compared to the same period last year. The new title 'Professional Baseball Rising', released in Japan last March, achieved a performance starting at No. 2 in the local Apple App Store download rankings. With representative work 'Summoners War: Arena of the Heavens', the overseas revenue share reached 67.6%, expanding its foothold in the global market.
In the case of Devsisters, 'CookieRun: Kingdom' continues to show consistent growth. The company noted that it achieved overall growth in key metrics with a large-scale update commemorating its fourth anniversary. After the update, CookieRun ranked No. 2 in game revenue in the Apple App Store in South Korea, No. 6 in Thailand, No. 13 in the United States, and No. 14 in Canada. Notably, 26% of new users coming from the fourth anniversary campaign accounted for 37% of total revenue.
MGAME's PC massively multiplayer online role-playing games (MMORPG) 'Yeolhyeol Gangho Online' and 'Knight Online' have been popular in China and North America/Europe, driving performance gains. Both games are currently cash cows for MGAME, with the commonality of experiencing revenue rebound. Notably, 'Knight Online', released in North America/Europe in 2005, has been rebounding since the COVID-19 pandemic. The company explained that steady updates, events, and marketing have contributed to this rebound.
Gravity's new titles, including 'Ragnarok M: Classic' launched in Southeast Asia and 'Ragnarok Idle Adventure Plus' presented globally, contributed to revenue growth. 'Ragnarok M: Classic', which launched in Southeast Asia in February, made a strong start, ranking No. 2 in revenue on the Apple App Store in Thailand and No. 4 in the Philippines. Although Wemade's total game revenue decreased by 8% compared to the same period last year, they defended against the drop in performance thanks to the success of 'Legend of Emir', which began service in Korea in February.
◇ NEOWIZ, WEBZEN, and Pearl Abyss see performance decline… Sales from popular IP also drop due to new title gaps
NEOWIZ, WEBZEN, and Pearl Abyss all saw performance decline in the first quarter. NEOWIZ recorded a revenue of 89 billion won and an operating profit of 10.2 billion won, reflecting decreases of 8.3% and 31.1%, respectively, compared to the same period last year. WEBZEN reported a revenue of 41.5 billion won and an operating profit of 8.9 billion won, representing declines of 32.4% and 50.5%, respectively, compared to the same period last year. Pearl Abyss recorded a revenue of 83.7 billion won in the first quarter, a decrease of 2% compared to the same period last year, while turning to an operating loss of 5.2 billion won.
These game companies are experiencing declines in revenue from existing popular IPs amid delays in the release of new titles. NEOWIZ saw a slowdown in sales from its representative IP 'Lies of P', leading to a decline in performance. As a result, revenue from the institutional sector of PC and console games was 36.4 billion won, a decrease of 18% compared to the same period last year. Pearl Abyss, which is preparing to release 'Crimson Desert' within the year, also turned to an operating loss due to the absence of new titles. The company attributed this to the rising development costs for new entries from its subsidiary CCP Games. Since the release of 'Black Desert' in 2015, Pearl Abyss had relied on a single game for performance, but the delay of 'Crimson Desert' has widened the gap of new titles.
In the case of WEBZEN, delays in new title releases affected revenue declines, and copyright litigation costs led to a reduction in net income. WEBZEN is currently in legal disputes with NCSOFT over the copyright of 'Lineage M'. In March of this year, the Seoul High Court ruled in favor of NCSOFT in the second trial of the copyright infringement lawsuit filed against WEBZEN, ordering it to pay 16.9 billion won.
These game companies intend to focus on a significant performance rebound through the release of new titles this year. NEOWIZ will release two new titles for publishing: the indie game 'Hello Seoul: Itaewon Edition' and the multiplayer online battle arena (MOBA) roguelike action 'Shape of Dreams'. WEBZEN is ramping up its preparations for service by recruiting participants for the closed beta test of the open-world action RPG 'Dragon Sword' and operating a teaser site for the collectible RPG 'Tervise'.