NCSOFT Q3 2025 Earnings Release

Key insights

6 takeaways

01
NCSOFT reported a Q3 2025 operating loss of KRW 7.5 billion on total sales of KRW 360.0 billion, representing a 10% year-over-year revenue decline.See it on page 2
02
Net income reached KRW 347.4 billion, driven primarily by non-operating gains from property sales and favorable foreign exchange fluctuations rather than core operations.See it on page 4
03
Mobile game revenue, which comprises 55% of total sales, fell 10% quarter-over-quarter due to strategic business adjustments.See it on page 5
04
Legacy PC online games showed resilience with a 9% year-over-year revenue increase to KRW 87.7 billion, marking two consecutive quarters of growth.See it on page 5
05
The company reduced marketing expenditures by 32% and saw a 13% decrease in depreciation and amortization, though these savings were offset by a 5% rise in labor costs linked to restructuring.See it on page 7
06
Domestic revenue in Korea declined 11% quarter-over-quarter, while royalty income provided a positive offset with an 11% sequential increase.See it on page 6

Summary

NCSOFT’s third-quarter 2025 earnings release details a period of operational contraction characterized by declining revenue and an operating loss, contrasted against significant non-operating gains. Total quarterly sales reached KRW 360.0 billion, representing a 6% decrease quarter-over-quarter and a 10% decline year-over-year. The company reported an operating loss of KRW 7.5 billion, driven by the overall sales downturn and elevated labor costs associated with one-time severance payments. Conversely, net income surged to KRW 347.4 billion, bolstered by substantial one-time gains from property sales and favorable foreign exchange fluctuations.

Segment performance highlights a divergence between mobile and PC platforms. Mobile game revenue, which accounts for 55% of total sales, fell 10% quarter-over-quarter due to strategic business adjustments. In contrast, legacy PC online games demonstrated resilience, growing 9% year-over-year to KRW 87.7 billion, marking the second consecutive quarter of growth for this segment. Regionally, the domestic Korean market saw an 11% quarter-over-quarter decline, while Asia-based revenue remained relatively stable despite a 2% sequential dip, supported by regional expansions and new title launches. Royalty income provided a bright spot, increasing 11% quarter-over-quarter.

Operating expenses remained largely flat at KRW 367.5 billion. While labor costs rose 5% due to restructuring efforts, the company successfully optimized its cost structure by reducing marketing expenditures by 32% and benefiting from a 13% reduction in depreciation and amortization expenses as server asset depreciation concluded. The financial results are presented on an unaudited, consolidated basis in accordance with K-IFRS, covering the company’s global operations across North America, Europe, and Asia.