Netmarble 1Q 2023 Earnings Results

Key insights

6 takeaways

01
Netmarble reported a Q1 2023 operating loss of KRW 28.2 billion and a net loss of KRW 45.8 billion, driven by a 4.6% year-over-year revenue decline to KRW 602.6 billion.See it on page 5
02
The company plans to reverse its financial contraction by launching 14 multiplatform titles in 2023, including major releases such as Solo Leveling: ARISE and Arthdal Chronicles.See it on page 10
03
Overseas markets remain the primary revenue driver, accounting for 84% of total sales, with North America alone contributing 48% of the company's revenue.See it on page 6
04
Revenue is heavily concentrated in casual games (47%), followed by RPGs (27%) and MMORPGs (16%), with core performance anchored by titles like Jackpot World and MARVEL Contest of Champions.See it on page 7
05
Operational costs were reduced in Q1 2023, with marketing expenditures dropping 17.9% quarter-over-quarter and labor costs decreasing 7.4% due to workforce reductions.See it on page 9
06
The quarterly revenue decline of 12.3% quarter-over-quarter was primarily attributed to a lack of new game launches and seasonal fluctuations in international performance.See it on page 4

Summary

Netmarble’s first-quarter 2023 earnings report details a period of financial contraction characterized by declining revenue and operating losses. The company reported quarterly revenue of KRW 602.6 billion, representing a 4.6% decrease year-over-year and a 12.3% decline quarter-over-quarter. This downturn is primarily attributed to the absence of new game launches during the quarter and seasonal fluctuations in overseas business performance. Consequently, the company recorded an operating loss of KRW 28.2 billion and a net loss of KRW 45.8 billion.

The company maintains a strong international presence, with overseas markets accounting for 84% of total revenue. North America remains the largest regional contributor at 48%, followed by Korea at 16% and Europe at 13%. The revenue portfolio is diversified by genre, led by casual games at 47%, followed by RPGs at 27% and MMORPGs at 16%. Key revenue-generating titles include Jackpot World, MARVEL Contest of Champions, Cash Frenzy, and Lotsa Slots, which collectively underscore the company’s reliance on its established social casino and RPG franchises.

Operational costs saw a reduction, with total operating expenses reaching KRW 630.8 billion. Marketing expenditures fell by 17.9% quarter-over-quarter due to the lack of new releases, while labor costs decreased by 7.4% following a reduction in workforce. Looking ahead, the company aims to revitalize its growth trajectory through a robust 2023 pipeline, planning the release of 14 multiplatform titles, including Solo Leveling: ARISE and Arthdal Chronicles, across global and Chinese markets. These results reflect a transitional phase as the company manages current operational costs while preparing for a significant expansion of its game portfolio.