New Releases Still in Question... Netmarble Needs Staying Power [Click e-Stock Column]

Operating Profit Expected to Drop 13.6% Year-on-Year in Q3
Disappointing Overseas Performance for New Releases
"Comprehensive IP Review Needed"

Netmarble’s performance is expected to continue falling short of expectations. Analysts cite two main reasons: the company’s new releases have yet to achieve significant overseas success, and sales of existing titles are clearly declining.

On September 29, Bookook Securities lowered its target price for Netmarble by 9.1% to 50,000 won, citing these circumstances. The previous day’s closing price stood at 35,500 won. The broker maintained its 'Buy' investment recommendation.

The firm projected that Netmarble’s results for the third quarter of this year would be somewhat sluggish, with revenue of 713.4 billion won and operating profit of 78.4 billion won. While revenue is expected to rise by 3.1% compared to the same period last year, operating profit is forecast to fall by 13.6%, leading to the expectation that the results will fall short of market expectations.

The report especially pointed out that even when new releases became popular, the company’s overall performance did not improve as much. ‘Monster Taming: Star Dive’ and ‘The Seven Deadly Sins: Origin’, which had been highly anticipated in the first half of the year, quickly dropped out of the revenue rankings, leaving disappointment. The new title ‘SOL’ enjoyed strong popularity and helped revenues, but this only compensated for the decline in existing games, thus limiting overall revenue growth.

Jun-gyu Lee, an analyst at Bookook Securities, commented, “We had expected a stepwise growth pattern, with hit new releases augmenting the revenue base provided by existing popular titles. In practice, however, initial popularity of new titles has simply filled the gap created by declining revenues from previously released games.” He continued, “While more rigorous review processes for new releases could extend the period over which revenue is generated, a decline in the number of new titles as an unintended consequence could result in prolonged stagnation.”

The report noted there are still some reasons for optimism. At the recent Tokyo Game Show, Netmarble unveiled three new games: ‘Shangri-La Frontier: The Seven Supreme Species’, ‘Solo Leveling: Karma’, and ‘Pearl in Blue’. During the general public’s admission period, lines continued to form and all demo tickets were quickly claimed, clearly indicating strong user interest.

Nevertheless, the company still faces challenges in global markets. Netmarble has been preparing multiplatform titles and console games to expand its position worldwide, but new releases expected to perform well domestically have seen disappointing results overseas. Analyst Lee assessed, “Although Netmarble has established a foundation for global success, the quality of new releases has not met expectations. To achieve greater overseas success, the company needs to conduct a comprehensive review of its intellectual property (IP) strategy and improve the quality of its new games.”

This content was produced with the assistance of AI translation services.