NCSoft Releases Q1 2005 Results

From a thread opened by SirBruce on Grimwell. The updated subscription numbers from NCSoft games, the initial Guild Wars numbers and some other interesting comments:

This is for the quarter January – March 2005. Hilights:

In 1Q, 2005, the total sales were down 4% QoQ to 60.4 billion won and operating profit was 21.3 billion won, down 1% QoQ.

Subscriber counts:
1,994,693 (down from 2,085,385)
7,623 in US (down from 7,634)

Lineage II
2,107,348 (up from 2,065,187)
65,644 in US (up from 61,835)

City of Heroes
140,481 (up from 124,435)
US is 128,280; Europe is 12,201

5. Progress in Guild Wars
– Guild Wars;
Guild Wars was commercialized both in U.S & Europe on April 28th.
Within 1 week over 250,000 accounts are activated in U.S and Europe, which we believe is a quite solid start. Based on the initial sell through and very positive response and reviews from the gamers, we believe we can comfortably beat our initial Guild Wars sales target.
On the same date, in Korea, Open beta was started. Within 1 week, around 500,000 accounts were created, and concurrent users are around 30,000.
The number of accounts created within 1 week exceeds that of Lineage II during the same period of time.

NC soft believes new game launched like Guild Wars should generate sales growth every quarter.

Net income (after taxes) was actually 21%.

As strong as those numbers may seem at first, these were actually well below analyst projections; the same was true of last quarter. NC Interactive (US) continues to lose money, and NC Europe is still taking a lot of investment capital to get started. WoW has been strong competition in Korea and China, and Guild Wars concurrent users in Korea is pretty low, as are its gamemetrics rankings in the cafes. NCSoft disputes the rankings and says it is getting more play that that, but clearly the title will have to do a lot better to meet expectations.

Tabula Rasa was delayed and NCSoft is now banking a lot of its hopes on both it and a fantasy title called “Aion” coming out next year. This is in addition to what they hope is strong sales for Auto Assault and City of Villians. Also coming out next year are Alterlife and Troopers, a mech-type game of some sort.

Also, the Korean baang market is changing, with MMOG games in decline and more and more “casual” games being played. NCSoft is planning on launching their own casual game package but if the trend continues this could be bad news, since so much of NCSoft’s business is derived from Lineage 1 and 2. Add to that that casual games don’t provide the montly revenue that MMOGs do, and that Guild Wars doesn’t either, and there is a lot of uncertainty regarding NCSoft’s financial future. It’s not that they are going to collapse or anything; however they could find themselves overextended.

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