Nc Corporation · KRX:036570
Nc — Ncsoft — Investor Presentation (February 2025)
30 slides from Nc's investor presentation, February 2025
Slide 1: NCSOFT IR Presentation February 2025
NCSOFT IR PRESENTATION February 2025
Slide 2: Overview, Financials, Investment Points, Appendix
I. Overview 1. Industry Overview 2. Company Overview II. Financials 3. Financial Highlights 4. Sales Breakdown 5. Cost Breakdown III. Investment Points 6. Strength 7. Strategy Appendix 8. Game Pipeline 9. Consolidated Financial Statements 10. NCSOFT ESG Performances 2
Slide 3: Industry Overview: Global Games Market Growth
1. Industry Overview : Global Games Market Growth • The global games market is expected to continue growing steadily, reaching a size of USD 236 billion by 2025 • Mobile platform is expected to account for 46% of the global games market by 2025 Global Games Market Size (2020 ~ 2025) (Unit : USD BN)
Slide 4: Industry Overview: Global Games Market (MMO Market)
1. Industry Overview : Global Games Market (MMO Market) • The global MMO games market is anticipated to be worth USD 75 billion in 2028 with increased demand across all regions • It is anticipated to grow through various sub-genres, such as MMORPG, MMORTS, and MMOFPS Global MMO Games Market Outlook
Slide 5: Industry Overview: South Korea Games Market
1. Industry Overview : South Korea Games Market • Mobile games remained the largest segment in 2022, accounting for 59% of South Korea’s games market • South Korean mobile games market has experienced over 19% of growth throughout the past 3 years South Korean Games Market Per Platform (2022) South
Slide 6: Industry Overview: Next Growth Opportunity in the Western Market
1. Industry Overview : Next Growth Opportunity in the Western Market • The value of South Korea’s games exports has grown 9% per annum over the past 4 years • Given the size of the gaming markets in NA and EU, expansion into the western region presents a growth opportunity for South Korean games Sou
Slide 7: Company Overview: Corporate Governance
2. Company Overview : Corporate Governance • NCSOFT’s board of directors comprises 7 members, each contributing to the board’s independence, diversity, and expertise Board Composition & Skills Matrix Ownership Structure (As of Dec 2024) NCSOFT Composition Gender Tenure Retail 12% Management Investor
Slide 8: Company Overview: Yearly Revenues Trend (1998~2024)
2. Company Overview : Yearly Revenues Trend (1998 ~ 2024) • Since 1998, NCSOFT has built a strong asset base through the launch of high-quality MMORPGs that provide long-lifecycle live services • Expecting the next phase of growth with the successful launch of new titles and overseas expansion Growt
Slide 9: Company Overview: Development & Publishing Network
2. Company Overview : Development & Publishing Network • Development studios in Korea and North America • Well-organized publishing arms in major markets such as US, Taiwan, Japan and Europe Globalized Development & Publishing Network Europe APAC North America NC Europe (100%) Korea Japan NC West Ho
Slide 10: Financial Highlights (Quarterly)
3. Financial Highlights (Quarterly) • Q4 sales posted KRW 409.4 billion, up 2% QoQ and down 6% YoY • Q4 operating loss totaled KRW 129.5 billion due to increased key operating expenses Quarterly Performance (Unit: KRW MN) Sales Operating Profit 437,709 397,911 401,937 409,407 368,869 ↑ 2% QoQ 3,853
Slide 11: Financial Highlights (Yearly)
3. Financial Highlights (Yearly) • Full-year 2024 sales recorded KRW 1,578.1 billion (YoY -11%) and operating loss was KRW 109.2 billion (TTR YoY) Performance of Past 3 Years (Unit: KRW MN) 2022 2023 2024 2,571,792 ↓11% YoY 1,779,833 1,578,123 559,006 609,051 ↓ 41% YoY 435,990 ↓ 56% YoY TTR YoY 206,
Slide 12: Sales Breakdown (Quarterly by Game)
4. Sales Breakdown (Quarterly by Game) • Q4 mobile game sales declined by 15% QoQ to KRW 215.6 billion, representing 53% of total sales • Q4 online PC game sales increased 16% QoQ and 6% YoY to KRW 93.4 billion, accounting for 23% of total sales Mobile Games PC Online Games (Unit: KRW MN) (Unit: KRW
Slide 13: Sales Breakdown (Yearly by Game)
4. Sales Breakdown (Yearly by Game) • Full-year 2024 mobile game sales declined 22% YoY to KRW 936.7 billion, accounting for 59% of total sales • Online PC game sales declined 2% YoY to KRW 351.8 billion, representing 22% of total sales Mobile Games PC Online Games (Unit: KRW MN) (Unit: KRW MN) Line
Slide 14: Sales Breakdown (by Region)
4. Sales Breakdown (by Region) • Q4 Korea sales declined by 13% QoQ to KRW 248.5 billion • Q4 NA/EU sales grew 25% QoQ to KRW 35.4 billion, driven by the successful launch of the GW2 expansion pack • Q4 royalty sales rose by 93% QoQ and 140% YoY to KRW 73.5 billion as TL’s global success was fully c
Slide 15: Cost Breakdown (Quarterly)
5. Cost Breakdown (Quarterly) • Q4 total operating expenses recorded KRW 538.9billion, up 29% qoq and 24% yoy • Q4 labor cost was KRW 314.5 billion, up 56% qoq and 54% yoy, attributable to severance package payments following organizational efficiency • Q4 marketing expenses increased 14% qoq to KRW
Slide 16: Cost Breakdown (Yearly)
5. Cost Breakdown (Yearly) • Full-year 2024 operating expenses totaled KRW 1,687.3 billion, up 3% YoY • Labor costs increased 10% YoY to KRW 906.4 billion primarily on severance package payments following organizational efficiency initiatives. • Marketing expenses rose by 51% YoY to KRW 128.2 billio
Slide 17: Strength: Multiple Successful IPs
6. Strength : Multiple Successful IPs Lineage Lineage 2 ✓ Launched in 1998 (remastered in 2019) ✓ Launched in 2003 ✓ Set the standard for Korean MMORPGs by pioneering RvR content, ✓ Full 3D graphics MMORPG with ‘seamless open world’ specifically castle siege wars ✓ Ranked first in PC cafés in Japan
Slide 18: Strength: Multiple Successful IPs
6. Strength : Multiple Successful IPs AION Blade & Soul Guild Wars 2 Massively Multi-player Experience on Mobile ✓ Launched in 2008 ✓ Launched in 2012 ✓ Launched in 2012 ✓ The first Korean game to introduce aerial PvP ✓ An action MMORPG featuring oriental martial ✓ Released 5 expansion packs ✓ Maint
Slide 19: Strength: Expertise in Live Services
6. Strength : Expertise in Live Services • Deliver timely and continuous content updates to extend the lifecycle of live-serviced games • Diversify the product portfolio by unlocking the value of legacy IP to drive sustainable growth Extending Lifecycle of Legacy IPs (# of years after its launch, by
Slide 20: Strength: Our Technology
6. Strength : Our Technology Massive scale live service AI-powered development Data-driven approach Massively Multi-player Experience on Mobile ✓ NCSOFT strives to ensure top-notch stability ✓ NCSOFT established an AI research department ✓ A data-driven approach, encompassing data and connectivity a
Slide 21: Strategy to Achieve Growth
7. Strategy to Achieve Growth • NCSOFT aims for continuous sales growth driven by four key pillars: 1) Legacy IP, 2) In-house development of new IP, 3) Strategic investments in external IP, and 4) Inorganic growth through M&A 4 strategic pillars to achieve sales growth Revenue M&A New IP (External)
Slide 22: Strategy: Unlocking Legacy IP Value
7. Strategy : Unlocking Legacy IP Value • Strengthening legacy IPs is key to building a solid foundation • Dedicated to extending the lifecycle of our legacy IPs, expanding their global reach, and diversifying their genres How to unlock and expand legacy IP value Extending Product Lifecycle Geograph
Slide 23: Strategy: Building a Global IP Portfolio
7. Strategy : Building a Global IP Portfolio • Striving to continuously diversify our portfolio across IPs, genres, platforms, and regions through: 1) Innovative in-house development, and 2) Promising publishing titles Inhouse R&D and Securing Publishing titles for Portfolio Diversification < Portfo
Slide 24: Strategy: Collaboration with Partners
7. Strategy : Collaboration with Partners • Building strong relationships with global partners is one of the most effective strategies for bringing our products to audiences worldwide • Investing in external developers through equity stakes and publishing rights will create new business opportunitie
Slide 25: Strategy: Pursuing Business Opportunities with PURPLE
7. Strategy : Pursuing Business Opportunities with PURPLE • PURPLE aims to become a global cross-play platform supporting both internal and external games PURPLE, NC’s integrated game platform Global Game Platform 2H24 1H24 2019 Opened to external AAA titles An All-in-One Platform Cross-play Platfor
Slide 26: Game Pipeline
8. Game Pipeline ‘24 ‘25 ’26+ MMO MMO Shooting 2nd 3rd legacy-IP based title legacy-IP based title 1st legacy-IP based title MMO Animation RPG (Publishing) A global-IP based MMORPG TPS (Publishing) A shooter game with innovative concept 26
Slide 27: Consolidated Financial Statements
9. Consolidated Financial Statements Statement of Financial Position (UNIT : KRW MN) FY 2023 FY 2024 FY 2023 FY 2024 Assets Liabilities I. Current Liabilities 614,287 322,188 I. Current Assets 2,336,839 1,788,537 Borrowings 239,954 - Cash and cash equivalents 365,200 1,260,473 Account payables 78,08
Slide 28: Consolidated Financial Statements
9. Consolidated Financial Statements Income Statement (UNIT : KRW MN) 4Q 23 1Q 24 2Q 24 3Q 24 4Q 24 FY 2023 FY 2024 Sales 437,709 397,911 368,869 401,937 409,407 1,779,833 1,578,123 Operating Expenses 433,856 372,188 360,025 416,228 538,897 1,642,549 1,687,339 Operating Income 3,853 25,723 8,844 (14
Slide 29: NCSOFT ESG Performances
10. NCSOFT ESG Performances KCGS ESG Ratings MSCI ESG Ratings Sustainalytics ESG Risk Rating Comprehensive Rating 2020 [B+] → 2024 [A] Comprehensive Rating 2020 [BBB] → 2024 [AA] Risk Rating 2021 [16.8] → 2023 [14.3] Environment (E) B+ A (comprehensive) Social (S) A+ Governance (G) A [Ref] ESG Ratin
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