Auto Assault Drags Down NCSoft

Auto Assault

It seems that perhaps the concept of an automotive-based MMO, while interesting, just isn’t bringing in the bacon. Not long ago the European and American game servers were merged in an attempt to bring down costs, but even so the game is costing them money, as announced in their second quarter financial results:

Sales were boosted by the successful launch of Guild Wars Factions™, which added to the already stable sales base formed by Lineage® and Lineage II. In Q2, the Guild Wars® franchise surpassed two million account activations worldwide and became the number one game in both North America and Europe. However, operating income saw a downturn due to the one time write-off (approximately KRW 12.6 billion or US$13.1 million) of costs related to sluggish sales of Auto Assault®, released in North America and Europe during the second quarter. Excluding this write-off, both operating income and pre-tax income grew by 64% from the previous quarter while operating income and pre-tax income declined by 17% and 11% respectively from the previous year.

So, while the concept of a Mad Max-themed MMO would be brilliant, more than likely nobody will be stepping up to the plate to throw it together.

NCsoft Announces 2006 Second Quarter Financial Results

Quarterly sales of KRW 85.5 billion, operating income of KRW 1.7 billion and pre-tax income of KRW 4 billion

Friday 4 August 2006/…NCsoft® Corporation (KSE:036570.KS), the world’s leading developer and publisher of online computer games, today reported second quarter 2006 sales of KRW (Korean Won) 85.5 billion (US$88.6 million), operating income of KRW 1.7 billion (US$1.8 million), pre-tax income of KRW 4 billion (US$ 4.1 million) and net loss of KRW 200 million (US$207,000). Compared to the previous quarter, sales increased 10% while operating and pre-tax income declined 81% and 61% respectively. Sales for Q2 increased by 7% from the same period last year while operating and pre-tax income declined 90% and 79% respectively year to year.

Sales were boosted by the successful launch of Guild Wars Factions™, which added to the already stable sales base formed by Lineage® and Lineage II. In Q2, the Guild Wars® franchise surpassed two million account activations worldwide and became the number one game in both North America and Europe. However, operating income saw a downturn due to the one time write-off (approximately KRW 12.6 billion or US$13.1 million) of costs related to sluggish sales of Auto Assault®, released in North America and Europe during the second quarter. Excluding this write-off, both operating income and pre-tax income grew by 64% from the previous quarter while operating income and pre-tax income declined by 17% and 11% respectively from the previous year.

By region, domestic sales amounted to KRW 52.9 billion (US$54.8 million), a decline of 4% from the previous quarter and 3% from the previous year. Sales in North America and Europe recorded strong growth of 39% and 144% to KRW 15.7 billion (US$16.3 million) and KRW 9.3 billion (US$9.6 million), lifted by the successful introduction of Guild Wars Factions. On a year to year comparison, sales in North America grew by 10% and in Europe grew by 192%. Steady sales of the Lineage series and Guild Wars led to sales of KRW 7.5 billion (US$7.8 million) in Japan, similar to the first quarter and the same period one year ago. The percentage breakdown of regional sales show almost half of all sales occurring overseas: Korea with 55% of total sales, North America with 18%, Europe with 11%, Japan with 9% and royalties with 7%.

By game, Lineage and Lineage II posted sales of KRW 28.5 billion (US$29.5 million) and KRW 28.4 billion (US$29.4 million), down 5% and 3% respectively from the previous quarter and unchanged year to year. Sales of City of Heroes®/City of Villains® were down quarter to quarter by 15% to KRW 5.5 billion (US$5.7 million) and down 5% year to year. Sales of Guild Wars showed a significant increase quarter to quarter, growing by 160% to KRW 16.4 billion (US$17 million) while growing 71% year over year. The strong numbers were spurred by the successful April launch of Guild Wars Factions in North America and Europe.

Note: 1USD = 965 Korean Won (KRW)

NCsoft is preparing a simultaneous global launch of the third campaign in the Guild Wars franchise, Guild Wars Nightfall™, during the latter half of this year. Closed beta testing for the hugely anticipated MMORPG project Aion™ is also expected within the year.

tim.stevens

Freelance journalist and software architect based in Upstate NY. I write for a variety of different places (as you’ll see) -- maybe even for you if you ask nicely.

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