The author is an analyst of NH Investment & Securities. He can be reached at jaemin.ahn@nhqv.com. — Ed.
A director’s preview of NCSOFT’s TL, one of the most anticipated titles of 1H23, has been released. As a game designed to be easily enjoyed by anyone, TL is expected to attract a range of global MMORPG players. Embodying a ‘play for all’ philosophy, TL is to be available on both the PC and consoles.
‘Play for all’ means TL should appeal to a wide range of gamers
We maintain a Buy rating and TP of W640,000 on NCSOFT, our top pick for the game industry. Recently, NCSOFT has unveiled a director’s preview of Throne and Liberty (TL; being prepared for release in 1H23), revealing some of the game’s key features and differentiation points. As a specific launch schedule and business model have yet to be unveiled, further information disclosure should serve as momentum in early-2023.
Among its distinguishing characteristics, TL boasts: 1) a seamlessly interconnected world in which dungeons can be explored as undivided spaces; 2) changes in content depending on weather and environment conditions; and 3) at least two weapon combinations and the ability to change a character’s role based on the given situation. Reflecting the preferences of today’s MMORPG players, the game includes designated PvP areas, ‘Possession Stones’ for guilds to fight over, separate dedicated UI/UX for PCs and consoles, and a range of character designs.
NCSOFT’s determination to make TL an MMORPG that can succeed not only in Korea but also in the global market is reflected in its new business model that embraces light users (in contrast to that for the Lineage series).
4Q22 preview: OP to arrive sluggish
NCSOFT is forecast to post 4Q22 sales of W548.2bn (-27.6% y-y, -9.3% q-q) and OP of W72.7bn (-33.6% y-y, -49.7% q-q), with OP to fall short of both our previous estimate of W84.5bn and the consensus of W88.2bn.
Sales decline for Lineage M, which performed well throughout 2Q22 and 3Q22, looks inevitable. For Lineage W, a drop in sales (4Q22E: W177.4bn, -50.4% y-y) is also expected, with it now being one year since the game’s launch. In addition, OP is to be impacted by other expenses such as special incentives of W1.0mn for all employees (paid in December), FA contract-related costs for the firm’s baseball team, and marketing cost growth.
