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NCSoft Sells More, Makes Less, Lays Off Employees

by Rainier on Aug. 13, 2008 @ 5:29 p.m. PDT

NCsoft issued its Q2 2008 financial results revealing that while sales were up 7%, operating profit, pre-tax profit, and net income dropped 25%, 31%, 42%, respectively. As a result NCSoft issued a statement that it has laid off 21 positions at its Austin studios after certain not yet announced projects were halted, while also scaling back the Dungeon Runners team as it decided not to port the client to other platforms.

NCsoft announced that the increase in sales was due primarily to the shutting down of private Lineage® servers and the successful update of Lineage II Gracia™ Part 1. The drop in operating profit was due to continued investment, including personnel, in development studios across the NCsoft organization.

By region, the percentage breakdown of sales for the second quarter shows 58% in Korea (KRW 46.6 billion/US$44.5 million), and 42% from overseas entities and royalty income: 13% in North America (KRW 10.8 billion/US$10.4 million), 6% in Europe (KRW 5.3 billion/US$5.1 million), 13% in Japan (KRW 10.7 billion/US$10.3 million), 4% in Taiwan (KRW 2.9 billion/US$2.8 million) and royalty income of 6% (KRW 4.7 billion/US$4.5 million).

By game title, sales in the quarter for Lineage recorded KRW 28.1 billion (US$27.2 million), Lineage II KRW 34.7 billion (US$33.6 million), City of Heroes®/City of Villains® KRW 5.7 billion (US$5.5 million), Guild Wars KRW 5.1 billion (US$4.9 million) and Richard Garriott’s Tabula Rasa® KRW 2 billion (US$1.9 million).

NCsoft’s CFO Jaeho Lee said, “In order to maintain our ongoing development cycles and a diverse game portfolio, multiple games are in development currently across all NCsoft studios. We anticipate publishing these new titles within the next two to three years, during which we believe we’ll maintain NCsoft’s status as a leader in the global on-line game market.”

NCsoft will officially launch its next AAA MMORPG, Aion, in Korea by the end of this year after open testing. Additionally open testing services for Lite MMOs such as Love Beat, Punch Monster, and Dragonica will begin. In addition, NCsoft saw positive response from the gaming industry during July’s NC Media Day, after unveiling its three new titles currently under development: Oriental Martial Arts MMORPG Blade and Soul, Shooter Action RPG MetalBlack, and Extreme Vehicle Combat Steel Dog.

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