NCsoft Profits Dip 43%, Guild Wars Boosts West

Major MMO publisher NCsoft (City Of Heroes, Lineage) has seen net profits drop by 43 percent in 2006, following increased investment in new titles. Sales, however, have stayed steady, with boosts in North America and Europe thanks to Guild Wars:
Officials from South Korean massively multiplayer online (MMO) games publisher NCsoft have revealed details of the company’s fourth quarter financial details, in which profits dropped by more than 40 percent. The company reported net profits for the full year of KRW 38.0 billion ($40.5m) on sales of KRW 338.7 billion ($361 million). Sales were relatively unchanged on the previous year but net profit was down by 43 percent, year on year. The drop in profits was blamed on increased in investment in expanding the company’s game portfolio and future growth. The full year results also include a one time write-off related to the failed Auto Assault in the second quarter of 2006. Fourth quarter results saw a net profit of KRW 18.7 billion ($19.9m), up from KRW 12.8 billion ($13.6m) in 2005, on consolidated sales of KRW 90.2 billion ($96.1m), up 6 percent from the previous year. Brisk sales of evergreen titles Lineage and Lineage II were credited for the increase, along with the successful launch of Guild Wars: Nightfall. By region, fourth quarter sales in Korea were KRW 53.4 billion ($56.9m), down 1 percent, and in Japan KRW 8 billion ($8.5m), down 13 percent. The launch of Guild Wars: Nightfall and an increase in players for Lineage II saw North American sales rise by 14 percent to KRW 18.0 billion ($19.1m), with European sales up by 76 percent to KRW 10.8 billion ($11.5m) for the same reasons. Of total sales, the company saw a total of 46 percent being derived from overseas. In terms of specific game titles, Lineage sales increased by 2 percent on the previous quarter, with Lineage II down by the same percentage. Sales of the Guild Wars franchise rose by 65 percent, with City of Heroes/Villains down by 26 percent. Of total sales for the company Lineage accounted for 35 percent, Lineage II 36 percent, Guild Wars 22 percent and City of Heroes/Villains 6 percent. The company’s earning guidance for the next financial year stands at sales of KRW 358 billion to 367 billion ($384m to $394m) and an operating profit of KRW 42 billion to 49 billion ($45m to $53m). The company expects to launch new MMO title Aion in Korea at the end of 2007, as well as an upgraded version of service platform PlayNC. New Western-orientated titles Exteel and Dungeon Runners are expected in the first half of the year, with Tabula Rasa and a new Guild Wars update in the second half of the year.

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