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As Profits Rise, NCsoft Expects Aion To Be Second Place To WoW In US

NCsoft is confident in its upcoming MMORPG Aion, saying it expects the title to be the second most popular MMO after World of Warcraft in the US -- but execs are blunt about the bad taste Tabula Rasa may have left behind.
South Korea-based Guild Wars house NCsoft reported a 451 percent profit rise for fiscal Q2, thanks in part to the release of the MMORPG Aion in Asia -- and the company has big expectations for the game once it launches in the West. Profits for the quarter ended in June were 33.75 billion won ($27.12 million), way up from Q2 2008's 6.12 billion won ($4.92 million). Sales for the quarter were up 70 percent from the same quarter a year prior to 137.78 billion won ($110.96 million). Sales and profits were up as royalties from Asian online game operator Shanda grew on the release of the MMORPG Aion and continued operation of Lineage 1 and Lineage 2. Aion is NCsoft's next big game, and is currently up and running on around 225 servers across South Korea, Taiwan, China, and Japan. The game generated 40.6 billion won ($32.7 million) in revenues for the quarter, excluding royalties -- a strong start for the game. But Aion has yet to launch in the US and Europe, where, like many regions, Activision Blizzard's World of Warcraft dominates the MMORPG landscape. Other major MMORPGs, such as Funcom's Age of Conan and Electronic Arts' Warhammer Online launched to very strong initial commercial reception, but did not make a dent in WoW's userbase. Aion is due to launch in the US on September 22 this year, and in Europe three days later. NCsoft won't say that it believes that Aion will overtake WoW, but in an earnings call, CFO Jaeho Lee said the game could accomplish the next best thing in the West. "I believe the performance of Aion in the US and European markets will be very successful. ... We are guessing that Aion will be -- could be -- the second [most] successful MMO in the US market next to World of Warcraft." He said it would be "very hard" to match the success of World of Warcraft, "but Aion will be a very successful product. We are very confident in it." Lee's excitement for the launch of Aion was dampened when an analyst asked how many boxes of Aion were shipping to retail as compared to NCsoft's MMORPG Richard Garriott's Tabula Rasa, a game that cost tens of millions and many years to make, only to shut down after a little over one year. "Ok, um, it's very unfortunate to hear the name of Tabula Rasa at this conference call," Lee said above the nervous chuckle of the analyst. "And we all want to forget and erase that memory from our performance." Lee also hopes, for the sake of Aion's success, that retailers in the West will forget about NCsoft's connection with Tabula Rasa. "We did a very poor job with Tabula Rasa, and we disappointed our retailers in US markets and also European markets. Because of that, our retailers may be very reluctant to take orders for Aion." He said, though, that as time goes by and anticipation for the game becomes apparent to retailers, they will be able to get more copies on shelves. "We are taking more orders now," he said. Richard Garriott, the lead man behind Tabula Rasa's creation, in May sued NCsoft for $27 million, alleging he was "forced out" of the company, which led to the loss of millions in stock options. In 2008, Garriott traveled to the International Space Station with Russia's space program. Pre-orders for Aion's collectors edition recently held the top spot on the dollar sales charts on Valve's Steam digital distribution service. On the strong Q2 numbers, NCsoft raised its 2009 revenue guidance 17 percent to 586 billion won ($471 million). The publisher also raised annual profit guidance by 80 percent to 180 billion won ($144.76 million).

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