SEOUL, Nov. 13 (Korea Bizwire) – As the third quarter of 2024 comes to a close, South Korea’s gaming industry is experiencing a stark divide in financial performance, with companies’ fortunes increasingly dependent on their intellectual property (IP) portfolios, leading major players to adopt divergent strategies for 2025.
Industry powerhouses Krafton and Nexon, often considered the “twin pillars” of Korea’s gaming sector, maintained their strong performance through the third quarter.
Krafton reported impressive gains, with revenue climbing 59.7% to 7.19 trillion won and operating profit surging 71.4% to 3.24 trillion won, significantly exceeding market expectations by over 27%.
The company’s success has been largely driven by the sustained popularity of its “Battlegrounds” franchise across both PC and mobile platforms.
In an unusual move highlighting its technological ambitions, Krafton included its AI R&D chief in its earnings call, traditionally reserved for the CEO, CFO, and IR representatives.
The company announced plans to integrate AI-powered Co-Playable Characters (CPC) into “Battlegrounds” and its upcoming title “inZOI,” while developing small language models (SLM) that can operate directly within game clients without server connectivity.
The company also revealed it has actively incorporated AI into its internal development processes.
Nexon, celebrating its 30th anniversary, posted strong results with revenue of 1.22 trillion won and operating profit of 467.2 billion won, representing increases of 11% and 13% respectively. The company’s performance was bolstered by both new releases like “The First Descendant” and established hits such as “Dungeon & Fighter.”
Prior to its earnings announcement, Nexon unveiled its vision to achieve annual revenue of 7 trillion won by 2027 through “vertical expansion” of its game IPs. This strategy involves extending successful game franchises across different platforms, genres, and markets.
Kang Dae-hyun, co-CEO of Nexon Korea, explained at a pre-G-STAR briefing session last month that “Creating mature IP franchises through vertical expansion, adding depth and breadth to existing IPs, is Nexon’s strategy. Properties like Dungeon & Fighter, Mabinogi, and Nexus: The Kingdom of the Winds could be candidates for this approach.”
In contrast, NC Soft reported its first quarterly loss in 12 years, with an operating loss of 14.3 billion won and a 5% year-over-year decline in revenue to 401.9 billion won. The company’s mobile “Lineage” trilogy has seen declining revenues, while recent major releases failed to gain traction, with development costs directly impacting the bottom line.
In response, NC Soft announced plans to dramatically reduce its headquarters workforce from the mid-4,000s to the 3,000s through voluntary retirement and spin-offs by the fourth quarter.
The company plans to separate its AI research subsidiary NC AI and three development subsidiaries, pending shareholder approval later this month. CFO Hong Won-jun emphasized the need for “change” to overcome the crisis, stating, “From 2025, we will focus on our core business to deliver strong financial results.”
Netmarble, which returned to profitability with an operating profit of 65.5 billion won and net profit of 20.6 billion won, is betting on new releases. The company plans to launch “King Arthur: Legends Rise” by year-end, followed by nine new titles in 2025, including “Game of Thrones: Kingsroad” and “The Seven Deadly Sins: Origin.”
Kakao Games, which recorded revenue of 193.9 billion won, operating profit of 5.7 billion won, and a net loss of 7.3 billion won, is setting its sights on a transformative year in 2025.
The company plans to release several new titles, starting with “Path of Exile 2″ next month, followed by multiple games developed by Ocean Drive Studio and Lionheart Studio. The highly anticipated “Chrono Odyssey” from NPIXEL is scheduled for Q4 2025, while XLGames’ “ArcheAge Chronicles” is slated for 2026.
Lina Jang (linajang@koreabizwire.com)