Lineage W Saves NCSoft From Burning In Q4

Stats suck bro.

NCSoft has posted their fiscal year results for 2021 and the numbers may shock and surprise you. And if you’re an investor, you’re probably feeling very mixed emotions right now. For the fourth quarter, sales are up 35% year over year, along with a 25% boost to pre-tax income, and a 52% boost to net income over the same period. Operating profit dropped 30%.

For the fiscal year overall, sales dropped 4% with operating profit down a whopping 55%, pre-tax income down 39%, and net income down 33%. More on that.

On the video game side, virtually everything in NCSoft’s library suffered in Q4. The PC side saw a drop in sales by 27% over last year. Mobile games now make up 70% of NCSoft sales, with Lineage W saving the company from major drop-offs in sales. Aion saw a 64% increase in sales annually attributed to the classic server.

Lineage W meanwhile has achieved higher numbers than any NCSoft game in the company’s history. For the first quarter on record, the game pulled in 357 billion Won. LineageM meanwhile has seen its revenue fall off 58% over last year. Lineage 2M, despite launching in more territories, has fallen off 25% year over year. NCSoft referred to Lineage2M’s worldwide launch as having a “limited impact” in the investor call. Little was mentioned about Blade & Soul 2 other than it being consistently in the top 10 on Google Play. It’s not doing great.

Fourth quarter operating costs are up 60% quarterly, 22% year over year while Q4 labor costs increased 47% due to Lineage W incentives. Marketing costs were also a major factor in NCSoft’s moolah making a beeline for the door, increasing 119% quarterly and 122% annually. Presumably this is marketing around their new and upcoming slate of titles. A 2022 initiative is aiming at making these processes more efficient.

It is worth noting that Lineage W essentially saved NCSoft from massive financial losses this quarter, as the game composed 357 billion Won of a total of 691 billion Won, or 51% of the total sales. The investor call specifically mentions Project TL (Lineage Eternal) and Lineage W as preparing for launch in the second half of 2022.

Project TL will see more PvE content as well as fleshed out characters and plot while NCSoft admitted its business strategy in dealing with the western markets has been lacking. NCSoft is also looking into Steam releases, acknowledging the platform’s power in the west.

Now here’s the topic nobody wants to hear; NCSoft is planning on launching NFT incentives into their games in 2022. It should be noted that NCSoft’s mobile games are currently being overrun with gold farmers to the point where the servers are barely functioning. There was push in the investor call to clarify how NFTs will be implemented, with NCSoft stating that the intention is not to create a play to earn game. They stated very directly that the intended outcome will not be to advertise NFTs to NFT investors. NFT investors and crypto investors will not be part of the intended audience.

Lineage W is expected in the early days of the third quarter with Project TL coming at the middle to later end of the fourth quarter. The release of Lineage W in second regions is where NCSoft is focusing NFT launch. NCSoft cannot legally sell NFT games in Korea. The company is adopting a more open communication process in the coming year, with apparently more transparency both for customers and investors and more focus on actually listening to the market. More frequent two way communication events are planned.

Aion 2 is shifting its release (as we already knew) to a global release rather than a staggered launch as with Lineage W. NCSoft has no information at this time on a timeline for release, however they did nod back to their 2023-2025 pipeline. There was some pushback on the notion that all of the Lineage mobile games might be cannibalizing each other’s sales.

Project TL will be a full 3D MMO coming out on PC and console, not mobile, and a “deeply immersive” MMORPG with a focus on story line. An investor did push NCSoft on the name, which NCSoft did confirm is actually the name of the game. TL stands for Throne & Liberty.

More coverage as it appears.

Source: NCSoft

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