{"id":16893,"date":"2018-10-01T18:51:00","date_gmt":"2018-10-01T18:51:00","guid":{"rendered":"http:\/\/www.dfcint.com\/dossier\/?p=16893"},"modified":"2018-10-16T19:21:36","modified_gmt":"2018-10-16T19:21:36","slug":"ncsoft-mobile-game","status":"publish","type":"post","link":"https:\/\/www.dfcint.com\/dossier\/ncsoft-mobile-game\/","title":{"rendered":"NCSoft Mobile Game Success Shows Potential For EA, Nintendo and Others"},"content":{"rendered":"

Last week we discussed the success casual PC game companies had going to mobile games.\u00a0 Meanwhile, AAA game companies have struggled finding success with mobile games.\u00a0 However, when they do it they can hit big.\u00a0 The most recent example is Korea\u2019s NCSoft.\u00a0 NCSoft’s mobile game success may show that companies like Nintendo and Electronic Arts really do have untapped potential in mobile.<\/p>\n

NCSoft is perhaps best known in Western markets for their Guild Wars games.\u00a0 However, their biggest product has been the Lineage franchise which has been a huge success in South Korea and other Asian markets.\u00a0 The first Lineage launched in 1998 and was followed by Lineage II five years later.\u00a0 Both games are still going strong today.<\/p>\n

However, like many companies, NCSoft struggled to find success on mobile.\u00a0 Lineage is a fantasy role-playing massively multiplayer online game (MMOG).\u00a0 These games can be hard to translate to mobile platforms and Lineage was no exception.<\/p>\n

So NCSoft partnered with a casual game company, Netmarble.\u00a0 Netmarble started in 2000 as a Korean-based casual game portal. Netmarble established itself as one of the top three casual game portals in Korea (along with Hangame and Pmang).\u00a0 However, like many casual PC game companies, Netmarble was struggling with the growth of mobile devices.<\/p>\n

Like King, with Candy Crush Saga, Netmarble was able to make a successful transition to mobile and with the success of games like Marvel: Future Fight revenues nearly tripled in 2015 to close to $1 billion.\u00a0 NCSoft wisely picked Netmarble as a partner to help develop a mobile version of Lineage.<\/p>\n

Lineage II: Revolution launched for Android and Apple mobile devices in South Korea in December 2016.\u00a0 It was an immediate smash and passed the $100 million mark by the end of the year.\u00a0 Throughout 2017, Lineage II: Revolution was earning over $200 million a quarter and accounting for as much as 45% of Netmarble revenue.<\/p>\n

\"Netmarble<\/p>\n

However, like Nintendo\u2019s Pokemon Go, NCSoft revenue from Lineage Ii: Revolution was limited to royalties.\u00a0 It took NCSoft\u2019s launch of its own mobile Lineage game for the NCSoft\u2019s fortunes to explode.<\/p>\n

NCSoft released Lineage M for mobile platforms in June 2017.\u00a0 It was an immediate smash in South Korea.\u00a0 NCSoft revenue in Q3 2017 was $661 million, more than triple the previous year\u2019s revenue of $198 million.<\/p>\n

In 2017, NCSoft\u2019s total revenue reached a record high of $1.6 billion.\u00a0 This was up from nearly nine billion in 2016.\u00a0 Furthermore, mobile revenue, which was almost non-existent in previous years, was over $900 million.\u00a0 This was more than all NCSoft PC games combined had ever made in a single year.<\/p>\n

\"NCSoft<\/p>\n

This windfall for NCSoft was great but the question becomes can it be recreated.\u00a0 Lineage is mainly a South Korea franchise.\u00a0 Excluding royalties, 86% of NCSoft revenue in 2017 came from South Korea, up from 71% in 2016.<\/p>\n

\"NCSoft<\/p>\n

The question going forward is can the Lineage franchise sustain mobile revenue.\u00a0 Both Lineage mobile games have showed a fairly rapid decline, even as they still make a great deal of money.\u00a0 Furthermore, NCSoft stock, while of course, at record levels, has been fairly volatile in the past year.\u00a0 Much of the stick trades on how investors feel about the potential for future mobile Lineage games.<\/p>\n

While NCSoft has some unique issues, the success of Lineage on mobile devices shows that there is plenty of upside for AAA products on mobile devices.\u00a0 Companies like Nintendo and Electronic Arts, who have enjoyed limited success in mobile (outside of third-party products like Pokemon Go and EA\u2019s acquired mobile division) have a great deal of upside potential for their key franchises.<\/p>\n

\"Nintendo<\/p>\n

However, investors are getting impatient.\u00a0 Both Nintendo and Electronic Arts\u2019 stock are about where they were trading a year ago.\u00a0 Furthermore, much of their market value is based on the assumption that they have upside growth potential in mobile.\u00a0 The good news is the NCSoft story shows that upside potential can be huge.<\/p>\n

\"Electronic<\/p>\n

To Request A Talk With A DFC Analyst Fill Out This Form<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Last week we discussed the success casual PC game companies had going to mobile games.\u00a0 Meanwhile, AAA game companies have struggled finding success with mobile games.\u00a0 However, when they do it they can hit big.\u00a0 The most recent example is Korea\u2019s NCSoft.\u00a0 NCSoft’s mobile game success may show that companies like Nintendo and Electronic Arts […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[49,177,40,56],"tags":[389,6,85,12],"_links":{"self":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts\/16893"}],"collection":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/comments?post=16893"}],"version-history":[{"count":2,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts\/16893\/revisions"}],"predecessor-version":[{"id":16913,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts\/16893\/revisions\/16913"}],"wp:attachment":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/media?parent=16893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/categories?post=16893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/tags?post=16893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}