The quarterly report for Q1 2017 from NCSoft is here and the numbers do not look very good. While Blade & Soul (B&S) remains stable, Guild Wars 2 and Aion are significantly weaker compared to the previous year. Lineage is even plummeting. The big hope now rests on the upcoming Lineage Eternal. In order for the game to be the expected success, the management of the development team has been changed.
As a publicly traded company, the Korean publisher giant NCSoft – known for games like Lineage, WildStar, Blade&Soul and Guild Wars 2 – has to release quarterly reports on revenues, sales, and profits for its shareholders.
However, the latest quarterly report for Q1 2017 is likely to shock many investors and shareholders, as the company fell far short of expectations.
NCSoft Quarterly Report Q1 2017 – Net profit down by over 70 percent!
According to the quarterly report for Q1 2017, NCSoft recorded revenue of 239.5 billion Korean Won. That’s approximately 195.3 million Euros. However, 260 billion Won were planned. NCSoft thus earned 20.5 billion Won (16.7 million Euros) less than planned. Furthermore, the net profit plummeted by a staggering 73.7 percent from 66.8 billion Won to a meager 17.4 billion.
Reasons for these declines, according to business sources, are stagnating games and increased wage costs. Salaries supposedly rose by about 33 percent, and NCSoft hired an additional 20 percent of staff to strengthen the mobile segment.
Quarterly Figures – Lineage and Guild Wars 2 at record lows
Lineage and Guild Wars 2 performed particularly poorly. Especially Lineage was until now the flagship of NCSoft and generated revenues of 118.414 million Won in Q4 2016. Now, in the first quarter of 2017, the former cash cow only manages 51.464 million Won. The reasons for this are a lack of new content (the last update came in September) and the planned mobile spin-off Lineage M.
This is set to be released soon, and many players preferred to wait for this title instead of investing in the original Lineage.
Guild Wars 2 is in a similarly bad position, as it has also not seen any major updates since the add-on Heart of Thorns in October 2015. As a result, revenues are at a record low of 14.226 million Won. While that’s hardly worse compared to the last quarter, a lot of revenue is missing compared to Q1 2016. Back then, they likely still benefitted from the aftermath of the expansion.
Even the MMORPG oldie Aion did not have a strong quarter compared to the previous year at the beginning of 2017. Revenues declined significantly. For the first time after a year, Aion now earns even less than Guild Wars 2.
The revenues of Blade and Soul are stable at the beginning of 2017 – those of WildStar are missing
NCSoft’s troubled project WildStar is still missing. Its quarterly figures are no longer reported.
Only the martial arts MMO Blade&Soul managed to improve. Revenues rose from 39.382 in the previous quarter to 44.560 million Won in Q1 2017.
NCSoft – Lineage Eternal and the mobile market must fix everything
Many experts see these poor numbers as further evidence that NCSoft must quickly shift its focus from PC games to mobile games. However, NCSoft itself stated that it will continue to operate in the PC sector and that mobile should not displace PC games. Rather, they want to cover both markets.
This concept aligns with the company’s big hope: Lineage Eternal. The action MMO is supposed to run on both mobile devices and PCs, thus covering both segments.
However, the first beta of Lineage Eternal was rather disappointing. Even the Koreans found it too unoriginal and grind-heavy.
In order for the big hope not to become a flop, the management of the responsible development team has been changed. Under the new leadership, Lineage Eternal is now meant to be the game that NCSoft needs to save itself. However, the mobile market in Korea is currently dominated by Lineage 2 Revolution, which NCSoft only earns royalties from. Whether NCSoft will be able to assert itself in the future remains to be seen.
What do you think of the numbers and the development of NCSoft and Lineage Eternal? Do you believe the game will be the big hit that NCSoft needs or do you see the publisher already going under? Let us know in the comments!
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