The performance of major domestic gaming companies is expected to falter in the second quarter. As the effect of new game releases earlier this year wanes, revenues and operating profits for companies like Nexon, KRAFTON, and NCSOFT are anticipated to decline compared to the same period last year. This is also interpreted as a base effect resulting from last year's favorable performance.
According to the securities and gaming industries on the 9th, KRAFTON's second quarter performance is expected to fall short of market expectations (consensus). Multiple securities firms forecast that KRAFTON's second quarter revenue will be approximately 690 billion won, a decrease of 1% to 2% compared to the same period last year, and operating profit is predicted to decline by 16% to 20% to 266 billion to 280 billion won.
Amid decreasing revenue from KRAFTON's flagship game 'PUBG: Battlegrounds' for the PC version, it has been analyzed that costs have increased due to rising personnel expenses from staff expansion and the hosting of the '2025 PUBG Weekly Series (PWS)', an international competition for PUBG. There are also evaluations that the response to the new game 'Enjoy' has not been as strong as its initial release, failing to contribute significantly to second quarter revenue.
Jeong Ui-hoon, a researcher at Eugene Securities, noted, 'The newly released Enjoy, launched in the first quarter, recorded sales of 1 million units in a short period, but traffic has sharply declined since then, leading to minimal revenue contributions in the second quarter.'
The base effect is also at play due to KRAFTON recording its highest second quarter performance ever last year, buoyed by the success of the collaboration content with the girl group NewJeans for 'PUBG: Battlegrounds' and the popularity of 'Battlegrounds Mobile India (BGMI)'. At that time, KRAFTON's operating profit soared 152.6% compared to the same period last year.
Among the 3N2K gaming companies (Nexon, Netmarble, NCSOFT, KRAFTON, Kakao Games), Nexon, the only one listed on the Japanese stock exchange, projected in its first quarter earnings announcement that its second quarter operating profit will decrease to between 224.6 billion and 309.9 billion won, about half the level compared to the same period last year. It forecast quarterly revenue to drop by as much as 19% to between 994.2 billion and 1.1 trillion won.
In the second quarter of last year, the success of 'Dungeon & Fighter Mobile', launched in China, boosted performance, but this year, the growth rate of Dungeon & Fighter has slowed. Furthermore, the early popularity effects of the new games 'Mabinogi Mobile' and 'First Berserker: Kazan,' revealed in the first quarter, weakened by the second quarter, and the absence of new releases contributed to the lowered performance guidance.
NCSOFT is also expected to post poor performance due to the lack of new releases in the second quarter. According to financial information firm FnGuide, NCSOFT's second quarter consensus is estimated at 355 billion won in revenue and 8 billion won in operating profit. This is anticipated to represent declines of 3.8% and 9.3% compared to one year ago, respectively. Kakao Games, which has entered an improvement phase due to long-term performance declines, is also expected to see its second quarter revenue drop by more than 50% compared to the same period last year, predicting a transition to deficit with 2nd quarter estimates of 117 billion won in revenue and -11.6 billion won in operating profit.
However, Netmarble, which recorded 'surprise performance' in the first quarter, is projected to see a slowdown in growth in the second quarter. Netmarble achieved above-expectation results with a 1243.2% increase in operating profit year-on-year in the first quarter, thanks to the popularity of its game 'Solo Leveling: ARISE' and the new game 'RF Online Next'. However, it is estimated that second quarter revenue will be 694.5 billion won and operating profit will be 66.2 billion won, a decline of 11.2% and 40.5%, respectively, from the same period last year.
However, the securities industry believes that the 'Seven Knights Reverse,' launched in May, will generate cumulative sales exceeding 80 billion won. As a result, although Netmarble's second quarter revenue and operating profit will still decrease compared to the same period last year, it is expected to surpass consensus estimates, reaching around 720 billion won and 85 billion won.
The gaming industry is aiming for a rebound in the second half of the year with the introduction of key new releases. NCSOFT is pinning hopes on the massively multiplayer online role-playing game (MMORPG) 'Aion 2', while Nexon is set to target the market with the action role-playing game (RPG) 'Vindictus: Defying Fate'. Kakao Games is looking to change the atmosphere with 'Chrono Odyssey', set for release in the fourth quarter. Netmarble plans to launch more than six new titles in the second half of the year, including 'Vampire' and 'Mongil: Star Dive', to strengthen its intellectual property (IP) assets.
There are predictions that KRAFTON will be driven by improvements in IP revenue rather than new releases for the second half of the year. Researcher Jeong stated, 'Starting this month with a collaboration with the popular girl group aespa, we expect a performance rebound as we push forward with collaborations with supercars like Bugatti and Porsche.'