NCsoft also reported operating income of KRW (Korean Won) 1.7B (US $1.8M) and pre-tax income of KRW 4 B (US $4.1M), a decline of 81% and 61%, respectively, from Q1. Sales were boosted by the successful launch of Guild Wars Factions, which added to the already stable sales base formed by Lineage and Lineage II. In Q2, the Guild Wars franchise surpassed two million account activations worldwide and became the number one game in both North America and Europe. However, operating income saw a downturn due to the one time write-off (approximately KRW 12.6B or US$13.1 M) of costs related to sluggish sales of Auto Assault, released in North America and Europe during the second quarter. Excluding this write-off, both operating income and pre-tax income grew by 64% from the previous quarter while operating income and pre-tax income declined by 17% and 11% respectively from the previous year.
By region, domestic sales amounted to KRW 52.9B (US$54.8M), a decline of 4% from the previous quarter and 3% from the previous year. Sales in North America and Europe recorded strong growth of 39% and 144% to KRW 15.7B (US$16.3M) and KRW 9.3B (US$9.6M), lifted by the successful introduction of Guild Wars Factions. On a year to year comparison, sales in North America grew by 10% and in Europe grew by 192%. Steady sales of the Lineage series and Guild Wars led to sales of KRW 7.5B (US$7.8M) in Japan, similar to the first quarter and the same period one year ago. The percentage breakdown of regional sales show almost half of all sales occurring overseas: Korea with 55% of total sales, North America with 18%, Europe with 11%, Japan with 9% and royalties with 7%.
By game, Lineage and Lineage II posted sales of KRW 28.5B (US$29.5 M) and KRW 28.4B (US$29.4M), down 5% and 3% respectively from the previous quarter and unchanged year to year. Sales of City of Heroes/City of Villains were down quarter to quarter by 15% to KRW 5.5B (US$5.7M) and down 5% year to year. Sales of Guild Wars showed a significant increase quarter to quarter, growing by 160% to KRW 16.4B (US $17M) while growing 71% year over year. The strong numbers were spurred by the successful April launch of Guild Wars Factions in North America and Europe.
NCsoft is preparing a simultaneous global launch of the third campaign in the Guild Wars franchise, Guild Wars Nightfall, during the latter half of this year. Closed beta testing for the hugely anticipated MMORPG project Aion is also expected within the year.
Note: 1 USD = 965 Korean Won (KRW)