NC Soft, one of South Korea's largest gaming companies, endured a difficult 2024 as a lack of new releases weighed heavily on its results. Now, buoyed by the launch of Aion 2, it appears poised for a sharp recovery.
According to a consensus of analyst forecasts compiled by FnGuide over the past three months, NC Soft is expected to report second-quarter revenue of 683.3bn won and operating profit of 132bn won—year-on-year increases of 78.7% and 775.6% respectively. Net profit is forecast to reach 111.9bn won, up 416.1% from the same period a year earlier.
The contrast with last year is stark. Across South Korea's gaming industry in 2024, fortunes diverged sharply depending on each company's pipeline and strategic position. NC Soft stood out as a cautionary example: without significant new titles to drive growth, it fell behind rivals such as Nexon and Krafton, which benefited from strong live-game revenues and successful new launches, and Netmarble, which managed to maintain relatively stable earnings.
The engine of this year's recovery is Aion 2, which went on sale on 25 May. The title is estimated to have generated around 88.9bn won in revenue within the second quarter alone, providing the critical lift NC Soft needed. After years of development, the game has finally begun translating into meaningful sales, marking a turning point for a company whose results had stagnated in the absence of fresh content.
The investment community has taken notice. Brokerages with an "overweight" recommendation on the gaming sector have named both Krafton and NC Soft as their top picks. Both companies have seen their second-quarter earnings forecasts revised upwards following strong first-quarter results, and analysts believe existing titles are likely to continue performing well through the third and fourth quarters. NC Soft trades at a forward price-to-earnings ratio of around ten times—relatively modest given the pace of its earnings recovery—and further upward revisions to profit estimates could compress that valuation multiple even further.
Elsewhere in the South Korean gaming industry, the picture for the second quarter is mixed. Krafton is forecast to report revenue of more than 1.2tn won and operating profit exceeding 370bn won, driven by new-title success, while Pearl Abyss is expected to record revenue of 280.1bn won and operating profit of 142.3bn won—rises of 252.0% and 1,307.8% respectively—reflecting the strong reception for its action role-playing game, Desert of Crimson. By contrast, Kakao Games and Com2uS, which had no major launches in the first half, are expected to see their results slip. Netmarble also disappointed: its two first-half releases, Seven Deadly Sins: Origin and Mon-G Star Dive, fell short of expectations and drove up marketing costs, leaving second-quarter operating profit forecast at just 77.8bn won—below what the market had anticipated.
The overarching theme of this earnings season is clear: in South Korean gaming, a hit new title is the difference between a banner quarter and a disappointing one. For NC Soft, the immediate challenge has been met. The harder task now is sustaining Aion 2's early commercial momentum through the second half of the year—only then will the company be able to declare that last year's slump has been decisively left behind.