NCsoft Q1 Profits Fall 43% Following Spacetime Writeoff

Publisher NCsoft has announced the results of its first quarter, showing sales up four percent to KRW 88.1 billion ($84.3 million), and profits down 43 percent to KRW 8.1 billion ($7.7 million) following a write-off after its decision to drop Spacetime's PC MMO Blackstar from its lineup. The company announced the decision in January to end its publishing agreement with Austin-based Spacetime Studios for Blackstar, resulting in layoffs at the developer. NCsoft says without the write-off, profits would have increased 8 percent to KRW 15.2 billion ($14.5 million). Spacetime announced in early May it had re-acquired the IP and development continues on the project. Elsewhere, NCsoft says its operating income was buoyed by continued popularity of the Lineage series in Asia, and sales of Guild Wars and City of Heroes in North America and Europe. NCsoft notes in particular that its first quarter saw the highest sales of Lineage II since its 2003 release. By title, NCsoft saw sales made up by 43 percent from Lineage II ($34.1m), 35 percent from Lineage ($27.8m), 12 percent from Guild Wars ($9.1m), and seven percent from City of Heroes/City of Villains ($5.2m). By region it saw sales of 57 percent in Korea, 12 percent in North America, 10 percent in Europe, 11 percent in Japan, three percent in Taiwan and seven percent from royalty income. Looking forward, NCsoft says its third closed beta test of Aion is coming this summer ahead of its full launch later in the year, and casual titles Point Blank, Punch Monster, Dragonica, and Love Beat due for launch later in the year. Said CFO Jaeho Lee said, “As proven once again in the Q1 financial results, we strongly believe our key franchise products, such as Lineage and Guild Wars, will meet our sales target with a strong customer base and continued content updates going forward. We plan to ensure the smooth launch of many new products in the next two to three years, which will strengthen our position as a global leader in online games.”