In the recently announced results of its fourth quarter and summary of its 2023 fiscal year, Netmarble, the creator of Seven Knights, has reported a significant decline of 65% in profits from ₩886 billion ($668 million) to ₩313 billion ($236 million) year-on-year.
Despite the substantial fall in profits, Netmarble’s fourth quarter results show a more promising outlook, with this quarter alone contributing more than half of its 2023 total, generating ₩195 billion ($147 million) in net profit.
Positive trends
The fourth quarter was the most lucrative period of the year for Netmarble, producing ₩665 billion ($502 million) in revenue, representing a 5.4% quarter-on-quarter increase and continuing an upward trajectory seen throughout the year. However, even with this improvement, the fourth quarter was still down 3.2% year-on-year.
EBITDA experienced a substantial percentage increase, rising by 146.5% quarter-on-quarter and 69.2% year-on-year to ₩60.4 billion ($46 million). Additionally, operating profit returned to positive figures for the first time in over a year, ending 2023 at 2.7% compared to -3.5% in the last quarter.
In particular, Netmarble’s RPGs saw an 11% increase in earnings between Q1 and Q4, now representing 38% of the company’s gaming revenue. Conversely, casual games decreased in their share from 47% in Q1 to 43% in Q4.
For individual games, Netmarble credits its successful last quarter to Marvel Contest of Champions and the recent launch of Seven Knights Idle Adventure, which helped propel Netmarble to its position as the second biggest Korean mobile publisher. Other top revenue generators included Jackpot World, Lotsa Slots, and Cash Frenzy.
Future prospects
Despite facing challenges in 2023, Netmarble is optimistic about its prospects in 2024. The company plans to launch five games in the first half of the year, including Arthdal Chronicles: Three Factions, Raven 2, Solo Leveling: Arise, King Arthur: Legends Rise, and Ni no Kuni: Cross Worlds. Notably, all five upcoming releases fall into the RPG genre, indicating a potential for further revenue growth for Netmarble, considering the current dominance of the genre in consumer spending across the industry.
While 83% of Netmarble’s revenue came from overseas in 2023, Q4 demonstrated signs of a recovery in earnings. However, it was not sufficient to offset the overall decline. The company’s total revenues decreased by 6.4% from 2022 to ₩2,501.4 billion ($1.9 billion), and EBITDA fell by the same percentage, reaching ₩115.8 billion ($87 million), while net profits were less than half of 2022’s figures.
