PowerPoint 프레젠테이션

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PowerPoint 프레젠테이션

NCSOFT PRESENTATION
May 2013
NCSOFT Corporation
157-37 Samsung-dong, Kangnam-gu, Seoul 135-090, KOREA
Tel: +82-2-2186-3300 Fax : +82-2-2186-3550
Copyright ⓒ NCSOFT Corporation. All Rights Reserved
WWW.NCSOFT.COM
Global Online Game Publisher NCsoft
Disclaimer
Some of the information and data in the material have been prepared based on assumptions. There
can be no assurance that the assumptions used by NCSOFT are correct and even if they are, that
the effect of such assumptions on NCSOFT’s business and results of operations will be as projected.
Therefore, NCSOFT will not be responsible for individual investment decisions based solely on this
material.
The financial results for 1Q FY 2013 have been prepared on an un-audited basis,
and may be subject to change during independent auditing process.
※ Consolidated subsidiaries (K-IFRS based) :
NC West Holdings(100%, US), NC Europe(100%, UK),
NC Japan(60%, JP), NC Taiwan(85%, TW), NCSOFT Corporation(HQ, KR),
Next Play(80%, KR), NCSOFT Service(100%, KR), NC Dinos Baseball Club(100%, KR),
Hotdog Studio(58%, KR), Oraion Soft(100%, KR), Ntreev Soft(76%, KR)
2
Contents
I. Overview
1. Industry Overview
2. Company Overview
II. 1Q FY2013 Earnings
3. Financial Highlights
4. Sales Breakdown
5. Costs Breakdown
III. Investment Points
6. Opportunities
7. Catalysts
8. Strengths
Appendix
9. Summarized Financial Statements
10. Screenshots
3
1-1. Industry Overview(Characteristics & Categories)
General Characteristics of Online Game Industry
 Fast-growing industry
 High margin business
 Low cultural barriers
 Multi-year cycle business
Categories of Online Games
MMOG
(Massively Multiplayer
Online Games)
MOG
(Multiplayer Online
Games)
Web Board Games
Thousands of players play in an evolving
virtual persistent world simultaneously over
the internet
Online games with
limited number of
players in a single game
world at a time
Hardcore users
Male, young adults
Mid-core & light users
Male & female, from teens to 40’s
Product Life Cycle
Relatively long (5-10 years)
Generally shorter than MMOGs
Business Model
Mainly subscription fees,
box sales in some regions
In-game items sales,
optional fees for premium contents
High development cost over
long development period (4~5 years)
Relatively low development cost,
shorter development period
Definition
Main User Base
Development cost
Easy to play browser
games such as chess,
poker, etc.
4
1-2. Industry Overview(Global Market at a Glance)
Online is the fastest growing game platform with CAGR 21% 2009~2014.
China is the biggest online game market with CAGR 23% 2009~2014.
Breakdown of Online by Regions
Growth Projection by Platforms
(Unit : USD BN)
(Unit : USD BN)
120
108
101
100
3
102
3
80
3
3
118
25
21
48
20
9
13
16
2009
2010
Online
12
11
21
28
25
14
32
1
1
3
16
47
48
10
7
1
2
1
2
4
1
1
4
4
3
4
25
48
50
28
30
23
25
60
20
32
22
48
40
35
3
21
3
26
28
109
114
15
13
10
0
1
2
2
5
3
1
1
2
3
11
9
3
7
3
6
4
7
4
5
2009
2010
8
10
11
2012E
2013E
2014E
Japan
Others
-
Mobile
2011
Console
2012E
2013E
Arcade
2014E
PC Package
China
Korea
2011
Europe
N. America
(Source: DFC 2012, iResearch 2012, PWC 2012, Jamma 2007~2012, informa 2005~2007, Enterbrain 2012, Playmeter 2012, JOGA 2012))
5
1-3. Industry Overview(Global Market, Online platform)
Online is the fastest growing game platform.
China and MMORPG genre are one of the biggest growth drivers for Online games.
Growth Projection
Market Share Trend
(Unit : USD BN)
35
3%
3%
3%
3%
3%
2%
21%
18%
28%
24%
19%
25%
32
Online
CAGR 21%
(2009~2014)
30
25
28
25
21
20
Mobile
CAGR 14%
(2009~2014)
16
15
13
10
7
10
9
11
43%
47%
2011
Online
2012E
12
2013E
Mobile
45%
49%
5
2010
41%
14
7%
2009
42%
2014E
8%
9%
10%
11%
12%
23%
25%
12%
19%
27%
16%
2009
2010
2011
2012E
2013E
2014E
PC Package
Arcade
Console
Mobile
Online
(Source: DFC 2012, iResearch 2012, PWC 2012, Jamma 2007~2012, informa 2005~2007, Enterbrain 2012, Playmeter 2012, JOGA 2012))
6
1-4. Industry Overview(China Market)
Online will remain as the most dominant game platform in China.
MMORPG will be the most popular genre in China with 50% ~ 60% market share.
Breakdown of Online by Genre
16
(Unit : USD BN)
16
(Unit : USD BN)
-
14
-
1.2
13
14
12
1.0
12
0.8
-
0.7
10
8
8
8
0.3
6
4
7
8
10
10
0.4
12
11
10
13
6
2
11
12
-
7
1
2
2
1
4
4
1
4
3
2
2
4
2
2
4
5
5
6
2012E
2013E
2014E
6
7
2015E
2016E
-
2011
2012E
Online
2013E
2014E
Mobile
2015E
Others
2016E
2011
MMORPG
Casual Games
Web-based Games
(Source : GPC and IDC 2012)
7
1-5. Industry Overview(Korea Market)
In Korea, as in China, Online will serve as the most dominant game platform.
Online will make up 88% ~ 89% of Korean gaming market through 2014.
Market Share Trend
(Unit : USD BN)
12
100%
90%
10
1.0
7%
8%
9%
85%
89%
89%
89%
88%
2010
2011
2012E
2013E
2014E
6%
70%
0.7
8
80%
6%
6%
60%
0.5
6
50%
0.3
4
9
8
0.2
2
3
81%
30%
6
0.2
40%
5
20%
4
10%
-
0%
2009
2010
Online
2011
2012E
Mobile
2013E
2014E
Others
2009
Online
Mobile
Others
(Source : Game White Paper 2012, Ministry of Culture, Korea)
8
1-6. Industry Overview(US & EU Market)
While Console is shrinking, Online is expected to grow faster than Mobile(CAGR 17% vs CAGR 10%).
MMORPG is expected to expand continuously in EU on the back of strong user base in Germany.
Market Share Trend in EU
(Unit : USD BN)
80
100%
90%
70
3
3
60
17
50
14
3
15
3
3
3
12
12
11
80%
49
50
51
2007
2008
44
43
41
56
57
59
2009
2010
2011
70%
60%
40
50%
30
40
38
38
37
37
37
40%
30%
20
20%
5
4
4
5
4
4
5
6
6
7
8
2009
2010
2011
2012E
2013E
2014E
10
3
0
50
Online
Mobile
Console
Arcade
PC Package
10%
0%
MMORPG
Casual
(Source :DFC 2011, PWC 2011, IDC 2011, Informa 2007, Screendigest 2011))
9
2-1. Company Overview(NCSOFT at a Glance)
A leading game company boasting the finest development capabilities and global publishing network.
Services
Snapshot
MMORPG
□ Foundation :
March, 1997
□ CEO :
Kim, Taek Jin
□ BOD :
Kim, Taek Jin(CEO)
Lee, Hee Sang(COO)
Bae, Jae Hyun(CPO)
Jeong, Jin Soo(CLO)
Park, Byoung Moo
Oh, Myoung *
Seo, Yun Seok*
□ Employees** :
3,000
Casual Games
□ Global network : Korea, North America,
Europe, Japan, Taiwan
□ Ownership** :
Individual
29.5%
Management
10%
Treasury
Stock
9%
Mobile Games
Nexon
15%
* Outside Directors
** As of May 2013
Domestic
Institution
19.1%
Foreign Institution
17.5%
Game Portal
Game Portal
10
2-2. Company Overview(Annual Revenues Trend)
Legacy products remain solid. With the case of Lineage, sales actually increased.
B&S and GW2 will drive growth further via China launch in 2013.
(Unit : KRW BN)
900
B&S and GW2 in China(’13~)
Royalty
Casual & Mobile Games
800
700
600
500
GW2(‘12)
Guild Wars 2
B&S(‘12)
Blade & Soul
AION
39
Guild Wars
12
City of Heroes/Villains
13
Lineage2
Lineage
AION(‘08)
252
262
165
62
223
400
141
300
Lineage2(‘03)
123
200
111
100
7
0
1998
1999
2000
119
131
147
21
Lineage(‘98)
55
119
101
65
153
113
133
118
113
115
118
111
113
132
2001
2002
2003
2004
2005
2006
2007
2008
2009
183 196
205
2010
2012 2013(E)
2011
11
2-3. Company Overview(Growth stages)
Lineage pioneered online games and still remains solid on the back of social network effect
Lineage2 and AION expanded NCSOFT’s domestic presence via product diversification
B&S and GW2 will accelerate global expansion thanks to differentiated quality and target marketing
(Unit : KRW BN)
900
Stage 3 : Global Expansion
GW2(‘12)
800
B&S(‘12)
700
600
165
Stage 2 : Dominance in Korea
500
AION(‘08)
252
262
223
400
62
141
10
300
Lineage2(‘03)
200
100
123
Stage 1 : Pioneer
111
0
7
1998
1999
2000
119
131
147
21
Lineage(‘98)
55
119
101
153
113
133
118
113
115
118
111
113
132
2001
2002
2003
2004
2005
2006
2007
2008
2009
65
183 196
205
2010
2012 2013(E)
2011
12
2-4. Company Overview(Hybrid Biz Model)
Lineage, one of the legacy games, is now stronger than ever thanks to hybrid business model.
Hybrid biz model(subscription + in-game item sales) will be expanded to other existing titles.
Quarterly Revenue of Lineage
Annual Revenue of Lineage
(Unit : KRW MN)
(Unit : KRW MN)
70,000
300,000
66,038
64,861
66,287
58,449
60,000
250,000
50,000
200,000
In-game item
sales
50,951
In-game item
sales
51,618
50,050
40,000
43,646
39,952
42,459
38,306
47,955
40,915
38,512
150,000
30,000
205,261
100,000
195,702
132,847
50,000
0
132,033
118,050
112,602
117,641 115,012
113,265
112,800
111,401
54,605
6,640
200
20,000
29,351
28,88727,481
28,088
25,151
26,605
29,023
10,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13
13
2-5. Company Overview(Development & Publishing Network)
Top talented developers in Korea and U.S.
Well-organized publishing arms in major markets such as Japan, Taiwan, Europe, U.S.
Europe
NCSOFT Europe (100%)
Innova System (LineageII)
Gameforge (AION)
China
Shanda (AION)
Tencent (B&S, Lineage, LineageII, Punch Monster )
KongZhong (Guild Wars 2)
Japan
NC Japan (60%, JV with Soft Bank)
Korea
NCsoft Corporation
(Headquarters)
North America
NC Interactive (100%)
Carbine Studio (100%)
Arenanet (100%)
Taiwan
NC Taiwan (85%, JV with Gamania)
Gamania (Lineage)
Development Studio
Publishing Entity
First Party Studio
License Partner
14
2-6. Company Overview(Never-Ending Innovation)
To be launched
Lineage Eternal
In service 
...
Wildstar
Guild Wars 2
Epic scale combats
Blade and Soul
Drag skill
MMO + SNG
AION
Proprietary
graphic engine
Lineage2
Differentiated action
Lineage
Flying characters
Wide range of
customization
Seamless
instant dungeons
Never seen before
adventures
Smart view
Interactive object
Personalized story line
Dynamic quest system
Smart UI
The first 3D MMO in Korea
Seamless world
Users get to create their
own contents
Large scale PvP
called ‘Gong Sung Jeon’
15
3. Financial Highlights
1Q sales was solid on the back of strong L1, GW2, and AION that turned around significantly in 1Q.
OP was also strong thanks to strong sales and decreased costs in payroll, marketing, and baseball team
Operating Profit
Sales
100,000
250,000
184,875
182,189
200,000
150,000
141,170
146,808
↓35% QoQ
↑31% YoY
55,512
36,787
40,000
20,000
50,000
1Q 12
2Q 12
3Q 12
4Q 12
1Q 13
(20,000)
↓51% QoQ
↑348% YoY
12,380
(11,108)
-
-
1Q 12
2Q 12
3Q 12
4Q 12
1Q 13
Net Income
Pre-tax Income
120,000
113,591
101,933
110,000
100,000
90,000
80,000
65,272
70,000
54,204
60,000
40,000
↓43% QoQ
↑256% YoY
18,346
(3,233)
(20,000)
80,000
60,000
100,000
20,000
(Unit : KRW in MN)
113,194
120,000
283,353
300,000
1Q 12
2Q 12
50,000
30,000
4Q 12
1Q 13
(10,000)
↓49% QoQ
↑322% YoY
12,403
10,000
3Q 12
52,330
47,152
(7,820)
1Q 12
2Q 12
3Q 12
4Q 12
1Q 13
16
4. Sales Breakdown
US/EU contribution decreased reflecting the reduction in GW2 package sales.
L1 was robust with healthy subscriber base plus in-game item promotions.
Sales by Region
300,000
300,000
283,353
16,823 (6%)
2,133 (1%)
20,708
(7%)
250,000
Sales by Games
(excluding royalty)
(Unit : KRW in MN)
266,530
14,239 (5%)
250,000
51,290 (18%)
200,000
150,000
100,000
50,000
141,170
15,230 (11%)
3,695 (3%)
14,889 (11%)
(2%)
3,306
6,907 (5%)
97,144
(69%)
200,000
184,875
10,741(6%)
2,530
13,012(1%)
(7%) Royalty
70,870 (25%)
14,679
(8%) Taiwan 150,000
24,721
(13%) Japan
Europe
100,000
N. America
119,013 (45%)
12,708 (7%)
50,000
10,934 (9%)
-
26,904
52,947 (42%)
25,057
18,413 (15%)
43,646
1Q 12
4Q 12
1Q 13
(35%)
Others
36,382 (21%) GW2
125,940
16,456
121,530 (43%) 119,192(64%) Korea
174,134
(10%)
(9%)
(6%)
16,504 (9%)
28,284 (16%)
14,218 (8%)
(24%)
64,861
66,038
4Q 12
1Q 13
B&S
AION
L2
L1
(38%)
1Q 12
L1 : Lineage 1
B&S : Blade and Soul
L2 : Lineage 2
GW2 : Guild Wars 2
17
5. Costs Breakdown
Labor cost went down 10% QoQ due to one-off year-end bonuses in 4Q.
Variable expense declined 31% QoQ mainly because of decrease in GW2 package sales.
Marketing expense dipped by 74% QoQ as there were no meaningful marketing campaigns.
Others shrank 39% QoQ reflecting the high base in 4Q which was caused by new player
sign-up cost for the baseball team.
(Unit : KRW in MN)
1Q 12
2Q 12
3Q 12
4Q 12
1Q 13
QoQ
YoY
Labor Cost
72,940
92,578
73,551
85,484
76,543
-10%
5%
Variable expense
12,081
13,386
18,225
18,528
12,758
-31%
6%
- Payment processing fee
5,762
6,437
8,093
8,130
6,584
-19%
14%
- Royalty expense
3,201
4,307
3,695
4,030
3,462
-14%
8%
468
1,479
5,011
2,437
580
-76%
24%
2,650
1,163
1,426
3,931
2,132
-46%
-20%
Marketing expense
3,225
6,829
10,819
15,463
4,006
-74%
24%
D&A
8,992
11,524
11,944
5,611
8,458
51%
-6%
31,552
33,600
30,863
45,073
27,598
-39%
-13%
128,790
157,917
145,402
170,159
129,363
-24%
0%
- Box production fee
- Other variable
Others(*)
Sub Total
* 1Q13 Others: Bandwidth costs(4,821), Rent(2,332), Wage for outsourced staff(3,008), Outsourced R&D(1,368), etc
18
6. Opportunity
Online is the fastest growing game platform (CAGR 21%).
Great potential for growth is ahead, but there are only a handful of players in the market.
Annual Revenue Trend of Blizzard
Game Markets by Platform
60
1,800
(Unit : USD in BN)
1,646
(Unit : USD in MN)
1,600
50
50
48
48
CAGR -1%
48
47
48
40
30
1,196
1,200
1,243
1,082
CAGR 21%
28
CAGR -6%
25
25
23
22
1,000
800
21
696
600
458
16
13
32
28
26
21
20
10
1,420
1,346
1,400
CAGR 14%
12
11
14
7
9
10
3
3
3
3
3
3
2009
2010
2011
2012E
2013E
2014E
400
200
160
-
Online
Mobile
Console
Arcade
PC Package
CY2004 CY2005 CY2006 CY2007 CY2008 CY2009 CY2010 CY2011 CY2012
(Source: Hudson Square Research)
(Source: Game White Paper 2012, Ministry of Culture, Korea)
19
7-1. Catalysts (China)
MMO genre is the largest segment in Chinese online game market and
successful MMOs in China are reported to generate USD 400 MN ~ 500 MN revenues per year.
B&S and GW2, the most anticipated games in China, are expected to launch in 2H 2013.
Breakdown of Chinese Market by Genre
16
(Unit : USD BN)
(Unit : USD MN)
600
13
14
12
10
10
8
8
7
6
1
500
2
11
12
2
400
2
1
4
4
1
4
300
3
2
2
200
4
2
Annual revenues(FY11) of leading MMOs in China
4
5
5
6
6
2012E
2013E
2014E
2015E
7
100
2011
MMORPG
Casual Games
2016E
Web-based Games
(Source : GPC and IDC 2012)
0
FWJ
Netease
Mir2
TLBB
WoW
Zhuxian
Shanda Changyou Netease Perfect World
(Source : duowan.com, companies)
20
7-2. Catalysts (Platform expansion)
Not only existing games but also new titles will be ported to various platforms.
For instance, Lineage mobile will be serviced in Japan via GREE in 1H 2013.
.....
.....
21
8. Strengths
World-class development capabilities and a strong pipeline
Global publishing network
To be launched
15 years of operational know-hows and skills
Lineage Eternal
In service 
...
Wildstar
Guild Wars 2

Blade and Soul

AION

Lineage2

Lineage







Launch: Sep. 1998
Accumulated Sales:
KRW 2 TN
(launch~2012)


Launch: Oct. 2003
Accumulated Sales:
KRW 1.5 TN
(launch~2012)


Launch : Nov. 2008

Accumulated Sales:
KRW 1 TN (launch~2012)
Internal tests expected
in 2013
Hands-on demo at PAX
and GamesCom in 2011
To be launched in US/EU in 2H 2013

Launched in US/EU on August 28 2012

To be launched in China via KongZhong in 2H 2013
Launched in Korea on June 30 2012
PCU in Korea : 230K
(PCU: Peak Concurrent Users)
To be launched in China via Tencent in 2H 2013
Service Country: 7 countries
(EU counted as one)
Latest Quarterly Sales: KRW 25 BN
(EU counted as one)


22
Appendix
9. Summarized Financial Statements
10. Screenshots
23
9-1. Summarized B/S
Parent
Consolidated
(Unit : KRW in MN)
2012
Current Assets
(Unit : KRW in MN)
2012
1Q 2013
Current Assets
674,304
705,844
Cash & cash equivalents
123,041
132,197
Cash & cash equivalents
Short-term financial instruments
313,035
348,191
Short-term financial instruments
Account receivables
76,702
73,647
161,525
151,809
642,522
649,096
45,522
42,913
Tangible assets
425,828
436,415
Intangible assets
133,317
131,807
37,855
37,961
1,316,826
1,354,940
Others
Non-current Assets
Investment assets
Others
Total Assets
Current Liabilities
235,652
233,189
Borrowings
12,176
10,565
Payables
25,473
36,622
5,317
14,386
8
8
192,679
171,608
60,610
63,891
35,284
41,465
4,550
4,771
Current tax liabilities
Other provisions
Others
Non-current Liabilities
Defined benefit obligations
Long-term employee benefits
Others
Total Liabilities
Capital Stock
Other Paid-up Capital
Other Components of Equity
Retained Earnings
20,776
17,655
296,262
297,080
10,949
10,954
117,910
118,530
991
698
870,734
908,156
Account receivables
1Q 2013
534,191
561,627
26,372
21,295
301,000
337,000
48,209
52,053
158,611
151,278
666,323
679,112
Investment assets
226,207
227,120
Tangible assets
399,739
410,984
29,692
29,022
Others
Non-current Assets
Intangible assets
Others
Total Assets
Current Liabilities
Payables
Current tax liabilities
Others
10,685
11,986
1,200,514
1,240,739
127,559
140,590
12,201
26,863
5,068
13,783
108,290
99,944
Other Provisions
2,000
-
Non-current Liabilities
34,132
39,854
29,576
35,127
4,205
4,402
351
325
Defined benefit obligations
Long-term employee benefits
Derivatives Liabilities
Other Account Payble
Total Liabilities
Capital Stock
Other Paid-up Capital
Other Components of Equity
Retained Earnings
-
-
161,691
180,444
10,949
10,954
127,935
128,556
2,533
2,678
Non-Controlling Interests
19,979
19,521
897,406
918,107
Total Stockholders Equity
1,020,564
1,057,860
Total Stockholders Equity
1,038,823
1,060,295
Total Liabilities
and Stockholders Equity
1,316,826
1,354,940
Total Liabilities
and Stockholders Equity
1,200,514
1,240,739
24
9-2. Summarized P/L
Parent
Consolidated
(Unit : KRW in MN)
2012
(Unit : KRW in MN)
2012
1Q 2013
1Q 2013
Sales
475,302
124,773
54,965
Cost of Sales
123,441
36,397
527,344
129,910
Gross Profit
351,861
88,376
Selling & Administrative Expense
376,092
74,398
Selling & Administrative Expense
250,852
51,237
Operating Income
151,252
55,512
Operating Income
101,009
37,140
Other Income
50,229
11,456
Other Income
42,079
10,363
Other Expense
18,574
1,696
Other Expense
52,067
1,779
182,907
65,272
Income before Income Tax Expense
91,021
45,724
29,240
12,942
Income Tax Expenses
22,272
10,448
153,667
52,330
Net Income
68,749
35,276
Sales
753,520
184,875
Cost of Sales
226,176
Gross Profit
Income before Income Tax Expense
Income Tax Expenses
Net income
Non-Controlling Interests
(2,136)
249
Equity Attributable to the owners of the Parent
155,802
Company52,081
25
10-1. Screenshot(Blade & Soul)
26
10-2. Screenshot(Guild Wars 2)
27
10-3. Screenshot(Wildstar)
28
10-4. Screenshot(Lineage Eternal)
29
Thank you
30

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