
NCsoft Co-CEO Park Byung-moo, who recorded an annual operating loss for the first time since going public, said, “I believe that the massively multiplayer online role-playing game (MMORPG) genre still has great growth potential. (Image courtesy of Yonhap)
SEOUL, Feb. 14 (Korea Bizwire) — South Korean gaming giant NCSoft has found itself in a financial crisis, posting its first annual operating loss in 26 years. The company reported an operating loss of 109.2 billion won ($75 million) for 2024, marking its first negative earnings since 1998.
Revenue fell by 11.3% to 1.58 trillion won ($1.09 billion), while net profit plunged 56% to 94.1 billion won ($65 million). A sluggish mobile gaming market, coupled with consumer dissatisfaction over in-game payment structures, dealt a heavy blow to the company’s financial standing.
Investors reacted sharply to the disappointing earnings. NCSoft’s stock fell 3.5% on February 12, followed by another 1.7% drop the next day, closing at 171,200 won per share. Over the past year, the stock has declined 15%, earning the company the moniker “Korea’s most disappointing stock” from investors.
Once a “blue-chip” stock trading above 1 million won per share, NCSoft is now facing an uncertain future, with analysts warning of further declines.
Market sentiment remains bleak. NH Investment & Securities reported that 98% of NCSoft’s shareholders are currently in the red. Analysts from SK Securities and Shinhan Investment believe that while NCSoft has upcoming game releases, only Aion 2 has significant market potential.
Without a successful new title, analysts warn that the company’s stock could continue to fall, despite the stabilizing effect of its real estate holdings.
Adding to shareholder concerns is NCSoft’s continued financial support for its professional baseball team, the NC Dinos. The company reportedly spends between 25 billion and 30 billion won annually on the team, raising questions among investors about the necessity of maintaining a costly sports franchise during a financial downturn.
“The company is cutting jobs and tightening its budget, so why is it still funding a baseball team?” one long-term shareholder questioned. However, NCSoft has defended its decision, stating that while it has reduced financial support over the past two years, maintaining the team remains a strategic move for brand value.
Beyond its gaming struggles, NCSoft’s real estate investments are under scrutiny. The company purchased prime land in Pangyo Techno Valley in 2021 to build a new corporate headquarters, a project initially seen as a symbol of its success.
However, with its core business faltering, the high costs of the new building—estimated at over 1 trillion won—are now viewed as a financial burden. To fund construction, NCSoft is selling its previous headquarters in Samsung-dong, expecting to raise around 400 billion won.
Further complicating matters is the role of Saudi Arabia’s Public Investment Fund (PIF), which became NCSoft’s second-largest shareholder in 2022 with a 9.26% stake, investing approximately 1 trillion won. Given NCSoft’s stock decline, PIF’s paper losses are estimated at 740 billion won.
However, analysts believe that Saudi Crown Prince Mohammed bin Salman, who controls PIF, is unlikely to divest his stake given his large-scale global investments, including a recent $690 billion pledge to the U.S. economy.
Meanwhile, the rapid ascent of Shift Up, a rival game developer, is putting additional pressure on NCSoft. Shift Up, founded by former NCSoft art director Kim Hyung-tae, went public in 2024, and its market capitalization has surged to 3.75 trillion won—nearly matching NCSoft’s 3.76 trillion won. As of February 7, Kim’s personal net worth stood at 1.38 trillion won, surpassing NCSoft founder Kim Taek-jin’s 450.7 billion won.
“Kim Hyung-tae’s decision to leave NCSoft and establish Shift Up has turned out to be a major success story,” said Oil-seon, head of the Korea CXO Research Institute. With NCSoft struggling to regain its footing, analysts warn that without a major turnaround, the company risks falling further behind its rising competitors.
Ashley Song (ashley@koreabizwire.com)