NCsoft third quarter profits sliced in half

by James Egan Nov 13th 2008 at 7:00PM

Filed under: Business models, Economy, MMO industry, News items

MMO industry giant NCsoft has seen better weeks than this. First there was Richard Garriott's announcement that he's leaving the company for new horizons. Then came the news that NCsoft's third quarter profits fell by 50 percent.

Gamasutra reported today: "In the three months ending September 30th, the South Korean company's profit was down from 10 billion won ($7.2m) in 2007 to just 5 billion ($3.6m) in this year's third quarter." Gamasutra goes on to cite some additional figures in regards to NCsoft's operations, namely that its Korean titles are still the big earners, with Lineage and Lineage II comprising roughly 84 percent of its overall revenues. MMO titles popular in North America and EU account for roughly 15 percent of NCsoft's revenues. For further details, be sure to check out Gamasutra's piece on NCsoft's third quarter revenues for more statistics linked to the company's revenue dip.

Tags: asia, business-models, economy, eu, european-union, gamasutra, korea, lineage, lineage-2, lineage-ii, mmo-industry, ncsoft, north-america, plaync, profits, revenues, richard-garriott

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Reader Comments (Page 1 of 1)

Celestial Lord said on 7:08PM 11-13-2008

This does not bode well for City of Heroes. Things will most likely get even worse when Champions Online sees the light of day, unfortunately. :(

Jay said on 10:24PM 11-13-2008

I agree that CoX is in danger if CO steals their customers and becomes successful.

I hope this does not mean that Dungeon Runners is in danger. Or, GW will close if GW2 cannibalizes its player base.

With the world in a recession, I wonder what NCSoft will do?

PeterD said on 7:09PM 11-13-2008

It's still making a profit though. While investors won't like it, it's not like they're going the way of detroit automakers here.

HexDSL said on 8:01PM 11-13-2008

combined sub's that's the way to go!

Jack said on 12:44AM 11-14-2008

I think NCsoft big cart to play here is GW2 but so far we not even seen a screenshot of the game ...

AoD said on 12:40PM 11-14-2008

I have a tenancy to agree with you here. Typically, a company wants to keep hype about a product, but NCSoft has been (unusually) quiet compared to most game developers.

I think the GW2 card would be a good one to play--albeit carefully.

Johnny_Velocity said on 2:38AM 11-14-2008

CoX took a huge 10% drop in subscribers, and that before the debacle that is the Issue 13 uproar. This is at or near an all-time low for them, before the purported PvP exodus. Ouch.

I, for one, welcome our new Champions Online overlords.

Entice said on 3:55AM 11-14-2008

Well, Aion Online's coming out Q1 next year. I heard it broke the record for most concurrent users (210k+) of an online game in Korea, on the 2nd day of OBT..

Malixu said on 7:17AM 11-14-2008

I'm not sure Richard Gariott leaving is what you'd call a bad thing. Sure, UO may have been incredible, but that doesn't make TR not an epic flop. Given the amounts it looks like he was being paid, I'd consider it an extremely positive move under the circumstances.

JP said on 10:10AM 11-14-2008

This needs to be put into perspective:

With a bad economy, and no new titles or expacks (I think?) this quarter, there’s not going to be an increased profit. It doesn’t mean the company is in that bad a shape.

That said, I hope they have big plans behind the scenes. They’ve seem to be resting on their laurels w/ little on the horizon. Other then Aion, but that’s NA niche at best.

I know I cancelled 2 accounts w/ them in the last 3 months. I have no plans to currently return either.

brandon said on 11:14AM 11-14-2008

If they really wanted to keep subscribers and money then they would do something like sony's station pass that lets you play all games. The lack of something like that is why more people don't play TR and one reason why some of their games like AA have died

James Egan said on 11:23AM 11-14-2008

Brandon, agreed. I've been saying this for a very long time. I would love to have a Station Pass-like option, as I don't keep a sub open at all times for CoH/CoV, Tabula Rasa, and Lineage II (Vitality makes a big difference, just want to throw that in). When Aion launches I'll certainly be in that as well.

But it's simply not viable to keep 3 or 4 of these subs running at any given time in addition to everything else I play. It's that guilt factor, when you've got a sub open but you don't have enough time to make full use of it. I'd have none of that guilt if I were on an all-access pass and would keep that open perpetually. I seriously hope that they consider this option.

InfamousBrad said on 11:56AM 11-14-2008

People have no sense of history. Let me put this in context: prior to World of Warcraft, Lineage was the biggest MMO in history, even though virtually nobody outside of Korea played it. It's still huge. But as World of Warcraft has expanded into Asia, Lineage as been slowly but steadily losing customers to WoW. NCsoft doesn't want those subscription numbers to go out the door, they need that money. And to that end, they have tried EVERYTHING. They created Lineage II, trying to catch up with Blizzard on tech and polish. That brought them no new subscribers. They then more or less gave up on competing with Blizzard in the D&D-ripoff genre, and funded just about every other genre of game in the world, ripping off (excuse me, making homage to) everything from Champions to Car Wars to Battletech to Starship Troopers, even funding a low-budget Diablo I parody. In particular, they bet HUGE money on the Starship Troopers and Car Wars homages. Auto Assault no longer exists. Tabula Rasa is a pile of crap.

So in their latest desperate attempt to bring their subscriber numbers back up to what they were pre-WoW, they took up the challenge from the people running their superhero game, people who were telling them that their game could pick up at least tens of thousands, maybe hundreds of thousands of new subscribers if the company would only invest some fraction of the cost of developing a new game into a technology refresh and some content expansions for theirs, that with the right support it could get the kind of steady growth curve that EVE Online has had. So NCsoft spent money to acquire the other half of the rights to that game, and then more money to triple its development budget.

Subscriptions continued to decline.

THAT's the news story here. City of Heroes tripled its development budget, and the rate of expansion slowed, instead of speeding up. City of Heroes tripled its development budget, and the rate of subscriber bleed didn't change one bit. Think they'll get to keep that budget if they keep bleeding subscribers? And just as importantly, what other arrows does NCsoft have in their quiver? All I know of is Aion. And I have yet to meet anyone who thinks that Aion will be anything more than a niche game, I have yet to meet anyone who thinks that Aion will be even as big as Auto Assault or Tabula Rasa, let alone as big as Lineage once was or even half as big as WoW.

Henry said on 2:38PM 11-14-2008

You lost all credibility after just your first sentence. You think Lineage II was released to compete with World of Warcraft? Lineage II was released first in October 2003. World of Warcraft in November 2004. Even if you went by their US dates, Lineage II was released a full seven months before WoW.