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Deterioration in the bottom line of Korean game publishers may not improve much from new releases in the second half due to rising marketing cost from heavy competition.
NCSoft spent 118.1 billion won ($87.7 million) from October to December 2021 when it rolled out Lineage W, the latest of its blockbuster MMORPG series Lineage, according to a recent report by Daol Investment & Securities. The figure is more than twice the company’s average quarterly marketing expense of 55 billion won for the year up until September. The game giant is expected to spend 90 billion won from October this year to promote its new MMORPG, called Project TL, to be released early next year.
Kakao Games recorded 36.4 billion won in marketing expense for the third quarter last year, sharply up from 8.1 billion won in the first quarter and 13.3 billion won in the second quarter. The jump owed largely to the launch of the latest ODIN: Valhalla Rising game. The company also spent heavily on marketing for its games this year – 14.9 billion won in the first quarter and 44.1 billion won in the second quarter when it released Uma Musume: Pretty Derby mobile game.
Big marketing spending for new game promotion significantly eat away game companies’ profit.
If a company spends 10 billion to 20 billion won for new game marketing, it would barely make money from the new game that even earns 1 billion won in revenue daily on average, said Kim Ha-jin, analyst at Daol Investment & Securities.
Game publishers are also embroiled in a controversy of paying gaming Youtubers to promote their new games.
[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
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