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China,WHO,failed of Lineage M problems NCsoft's future is not so bright


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NCSOFT : suffers earnings shock on lackluster 'Lineage M'

NCSOFT recorded an earnings shock during the January-March period due to a sales slowdown of its major games including "Lineage M," while advertising expenses increased in preparation for overseas rollouts.

The game company announced Friday that its first-quarter sales stood at 358.8 billion won ($305 million) while its operating profit reached 79.5 billion won.

These were down 10 percent and 29 percent, respectively, from the previous quarter, and 24 percent and 61 percent from the previous year.

The figures were below the market consensus as securities firms estimated the game company's sales at 388.8 billion won and operating profit at 117.3 billion won.

Sales from mobile games were tallied at 198.8 billion won, falling 11 percent from the previous quarter. This was attributed to the firm having added a few new items for "Lineage M" in January and February ahead of the game's large-scale update, which was carried out March 6.

"Lineage M," the mobile version of its massively multiplayer online role playing game (MMORPG), "Lineage," was released in June 2017, and has been its most popular game app on Google Play Store since then.

Sales from online games also decreased 47 percent from the previous quarter as the firm slowed down on adding new items for "Lineage," while preparing for the launch of its upgraded version, "Lineage Remastered."

The company said it will see a rebound in the second quarter.

"We expect sales from Lineage M to increase in the second quarter," NCSOFT Chief Financial Officer Yoon Jae-soo said during a conference call.

The firm said it plans to start "Lineage M" services in Japan, May 29, hoping to expand sales further.

"One of our major tasks of the year is expanding overseas sales," Yoon said.

(c) 2019 Korea Times Co. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers


NCSoft : Game firms struggle to find breakthrough

Concerns are growing over Korea's game industry as Nexon, NCSOFT and other game companies struggle to keep their businesses afloat due to China's continued refusal to allow the sale of Korean games there, and the absence of new games, industry officials said Tuesday.

The World Health Organization's (WHO) move to designate game addiction as a mental disease could devastate the industry while most game firms suffered an earnings shock in the January-March period, they also said.

Major game companies posted lower-than-expected earnings in the first quarter. Nexon, one of the largest game firms here, posted an operating profit of 536.7 billion won ($452.3 million) in the first quarter, a 4 percent decrease year-on-year.

NCSOFT also saw its operating profit decrease by 61 percent to 79.5 billion won and Netmarble posted an operating profit of 33.9 billion won, a 54.3 percent decrease year-on-year. Com2uS, best known for mobile role-playing game "Summoners War," saw its operating profit decline by 23.5 percent while Pearl Abyss had an operating decline of 55.3 percent.

Industry officials said the game companies couldn't generate more operating profit as they are blocked from exporting games to China and many of them didn't release new game titles in the market.

In China, game companies must obtain licenses from the government for new games. Korean firms have been blocked from exporting games to China since March 2017 when the Chinese government stopped issuing licenses as part of its protest against Korea's deployment of a U.S. Terminal High Altitude Area Defense (THAAD) system.

This China risk has appeared to have made it more difficult for Nexon founder Kim Jung-ju to sell his stakes in the firm. Kim has reportedly become tired of regulations and the negative perceptions toward the industry, in addition to the decline of overall growth potential compared to when he established the firm in 1994.

Kim has put up for sale a 98.64 percent stake in Nexon's holding company, NXC, owned by him, his wife and his private firm, but he has been struggling to find a suitable purchaser, according to sources in the investment field.

However, the worst factor that could kill the entire game industry here is the WHO's move to codify game addiction as a mental disorder, Hwang Sung-ik, president of the Korea Mobile Game Association (KMGA), said.

"The game industry here has been facing a series of challenges and it seems things can only get worse. Game companies are blocked from exporting their games to China and some of them failed to release new games. What is worse is the WHO may classify game addition a mental disorder. If it is approved, the industry will lose trillions of won," Hwang told The Korea Times.

The game addiction issue will be decided during the WHO's assembly meeting, which will take place in Geneva, Switzerland from May 20 to 28. It will take effect in 2022, if approved, and experts here estimate the industry is expected to lose more than 10 trillion won in three years from 2023. Hwang added the designation "could make small-sized game developers disappear from the industry."

The environment for doing game business is getting difficult as the adoption of the 52-hour maximum workweek, shortened from 68, has been impeding firms from meeting deadlines for new games and has burdened them with additional labor costs.

In addition, the growing movement to form labor unions has put greater pressure on the firms. The labor union of Nexon reached a deal with management in February to abolish the fixed overtime wage system beginning August and the move was followed by other game companies such as Netmarble and NCSOFT.

(c) 2019 Korea Times Co. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers


Netmarble Games : Heads of Netmarble, Nexon, NCSOFT remain silent

By Jun Ji-hye Heads of the nation's three leading game companies ― Netmarble, Nexon and NCSOFT ― have been keeping silent since the World Health Organization (WHO) designated video game addiction as a mental disorder The silence of , Netmarble Chairman Bang Joon-hyuk and NCSOFT founder Kim Taek-jin is stimulating curiosity, as the WHO stance, once adopted by the Korea government, is highly likely lead to stringent regulations and kill the industry. The silence of the three high-profile figures in the game industry is in stark contrast to reactions of game-related organizations including the Korea Association of Game Industry (K-GAMES) and the Korea Creative Content Agency (KOCCA), which participated in a joint committee aimed at working out countermeasures in reaction to the WHO decision.

About 90 organizations participated in the committee, which was launched Wednesday. According to officials, KOCCA asked Netmarble, Nexon and NCSOFT to join forces in the committee, based on the belief that participation of the heads of the three firms would help strengthen the influence of the committee.

But there has been no response from the three. Netmarble Chairman Bang Joon-hyuk The Korea Academic Society of Games also asked the three figures and NHN Entertainment Chairman Lee Joon-ho to hold a roundtable conference last year when the WHO was moving to codify game addiction as an illness.

But the organization received no responses from them, either Regarding the issue, a Netmarble official said, 'We have decided to respond to the matter through one channel, K-GAMES.' He said his firm will keenly cooperate with K-GAMES as well as other game firms to cope with the WHO decision.

An official from one of the three companies who asked not to be named made similar comments, saying: 'We are handling the issue with K-GAMES.' Industry sources sited characteristics of the three figures who have rarely made official comments or public appearances.

NCSOFT CEO Kim Taek-jin 'Though they are not openly saying things, they are apparently scratching their heads over the issue as it is set to bring about enormous changes in the industry,' a source said. On May 25, the World Health Assembly, the decision-making body of the WHO, unanimously approved the revised 11th International Classification of Diseases (ICD-11), which classifies game addiction as a disease in the same category as substance abuse and gambling.

The Ministry of Culture, Sports and Tourism said it rejects the WHO conclusion, noting that it will file an additional objection with the WHO as the decision was made without acceptable scientific evidence. According to Seoul National University, the Korean game industry will likely suffer a loss of 11 trillion won ($9.

3 billion) over three years from 2023 if the WHO stance is reflected into the nation's policy making. .

(c) 2019 Korea Times Co. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers


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