NCsoft Releases Q1 2005 Results

NCsoft has released its financial results for the first quarter of fiscal year 2005, a three-month period ending March 31st, 2005. The net revenue for the quarter was 60.4 billion Korean won ($60.2 million USD), while the net profit was 12.6 billion won ($12.6 million USD). Compared to last quarter, Q4 2004, net revenue is down four percent, while operating profit is down one percent. One reason for the declines may have been a lack of new product introduced, especially in the American market, where no new NCsoft games were introduced. Despite that, royalty earnings have gone up 13 percent over the Q4 2004 results, which, according to the company, is a sign that NCsoft's games are gaining a greater international following. Although the company compared its results to the previous quarter in its official press release, comparing them to the same quarter last year showed a disappointing 33 percent drop in profits. NCsoft CEO Tack Jin Kim had no specific comment on the past quarter, but was optimistic about NCsoft's future for the rest of the 2005 fiscal year. "2005 will be a meaningful year for NCsoft because we will be launching products that have been in development for quite a while," said Kim. "Guild Wars launched simultaneously in North American and Europe on April 28 and the result is even better than we expected." However, Guild Wars, which had 250,000 players create accounts in its launch week in North America and Europe, does not include the monthly subscription fee of many of NCSoft's other titles, so this could potentially impact its profitability in the longer-term, though it is possibly that NCSoft will defray the cost by charging for in-game expansions. Kim also talked about future releases for the rest of the year: "City of Villains, the sequel to the very successful City of Heroes online game, will be launched in North America and Europe and casual games scheduled for launch via NCsoft's portal site in the fourth quarter are expected to expand NCsoft's customer demographics. In addition, more details on the AION project, another MMORPG scheduled for launch in Korea, will be announced later this year."