NCsoft Announces 2006 Second Quarter Financial Results
Quarterly sales of KRW 85.5 billion, operating income of KRW 1.7 billion and pre-tax income of KRW 4 billion
Friday 4 August 2006/...NCsoft® Corporation (KSE:036570.KS), the world’s leading developer and publisher of online computer games, today reported second quarter 2006 sales of KRW (Korean Won) 85.5 billion (US$88.6 million), operating income of KRW 1.7 billion (US$1.8 million), pre-tax income of KRW 4 billion (US$ 4.1 million) and net loss of KRW 200 million (US$207,000). Compared to the previous quarter, sales increased 10% while operating and pre-tax income declined 81% and 61% respectively. Sales for Q2 increased by 7% from the same period last year while operating and pre-tax income declined 90% and 79% respectively year to year.
Sales were boosted by the successful launch of Guild Wars Factions™, which added to the already stable sales base formed by Lineage® and Lineage II. In Q2, the Guild Wars® franchise surpassed two million account activations worldwide and became the number one game in both North America and Europe. However, operating income saw a downturn due to the one time write-off (approximately KRW 12.6 billion or US$13.1 million) of costs related to sluggish sales of Auto Assault®, released in North America and Europe during the second quarter. Excluding this write-off, both operating income and pre-tax income grew by 64% from the previous quarter while operating income and pre-tax income declined by 17% and 11% respectively from the previous year.
By region, domestic sales amounted to KRW 52.9 billion (US$54.8 million), a decline of 4% from the previous quarter and 3% from the previous year. Sales in North America and Europe recorded strong growth of 39% and 144% to KRW 15.7 billion (US$16.3 million) and KRW 9.3 billion (US$9.6 million), lifted by the successful introduction of Guild Wars Factions. On a year to year comparison, sales in North America grew by 10% and in Europe grew by 192%. Steady sales of the Lineage series and Guild Wars led to sales of KRW 7.5 billion (US$7.8 million) in Japan, similar to the first quarter and the same period one year ago. The percentage breakdown of regional sales show almost half of all sales occurring overseas: Korea with 55% of total sales, North America with 18%, Europe with 11%, Japan with 9% and royalties with 7%.
By game, Lineage and Lineage II posted sales of KRW 28.5 billion (US$29.5 million) and KRW 28.4 billion (US$29.4 million), down 5% and 3% respectively from the previous quarter and unchanged year to year. Sales of City of Heroes®/City of Villains® were down quarter to quarter by 15% to KRW 5.5 billion (US$5.7 million) and down 5% year to year. Sales of Guild Wars showed a significant increase quarter to quarter, growing by 160% to KRW 16.4 billion (US$17 million) while growing 71% year over year. The strong numbers were spurred by the successful April launch of Guild Wars Factions in North America and Europe.
Note: 1USD = 965 Korean Won (KRW)
NCsoft is preparing a simultaneous global launch of the third campaign in the Guild Wars franchise, Guild Wars Nightfall™, during the latter half of this year. Closed beta testing for the hugely anticipated MMORPG project Aion™ is also expected within the year.