Korean game developers posted paltry earnings in the fourth quarter last year. Netmarble said Wednesday that fourth-quarter sales fell 20.9 percent on-year to W487.1 billion, while operating profit nosedived 59 percent W38 billion (US$1=W1,123).
Nexon said a day earlier that fourth-quarter revenues fell 13 percent to W459.4 billion, while operating profit plummeted 67 percent to W38.9 billion. NCsoft also posted a 40 percent drop in operating profit in the same period.
Over the last three to four years, Korean game companies had enjoyed a heyday as they performed well in Chinese, Southeast Asian and U.S. markets, exports reaching W5 trillion a year.
But a lack of new game releases and tougher regulations in China, the biggest export market, have taken a toll on the industry since last year. One industry insider said, "Unless we find a way out of the doldrums this year, we could lose our growth momentum altogether."
The failure to come up with new games is largely to blame. Netmarble's "Lineage 2: Revolution," Nexon's "Dungeon Fighter" and "Maple Story" and NCsoft's "Lineage M" powered earnings nicely for a while, but instead of coming up with new ones they simply adapted them for smartphones, and that cost them dearly.
Now the industry is hoping to break out of the doldrums with new games including Netmarble's "BTS World" and NCsoft's "Lineage 2M" scheduled to hit the market in the first half. "BTS World" uses the boy superband Bangtan Boys as characters and is sure to cash in on some of their global fame.
But everything turns on China's policies on regulating computer games. Last year, the Chinese government enforced strict regulations on new game licenses to protect the eyesight and sanity of teens and children.
New games were simply barred from the market. But now the Chinese government is allowing new titles again, so developers are cautiously hopeful.