SEOUL, South Korea, February 14, 2006/... NCsoftÂ® Corporation (KSE:036570.KS), the world's leading developer and publisher of online computer games, surpassed the 300 billion Korean Won sales milestone for the first time while announcing record revenues for the fiscal year that ended December 31, 2005. NCsoft recorded sales of KRW (Korean Won) 338.8 billion (US$346.5 million), operating income of KRW 76.6 billion (US$78.3 million) and pre-tax income of KRW 84.6 billion (US$86.5 million) based on its 2005 financial statement. Sales grew by 17% from the previous year (FY2004) while operating income and pre-tax income fell by 21% and 13% respectively.
The financial results are driven mainly by diverse sources of revenue generators such as LineageÂ® and Lineage 2 with historically stable sales records. Other revenue streams are coming from the sales of Guild WarsÂ® which launched service in the first half of the year and City of VillainsTM which was released in the second half of 2005.
The financial statements from the fourth quarter of 2005 indicated sales of approximately KRW 96.6 billion (US$98.8 million), operating income of KRW 20.2 billion (US$20.6 million) and pre-tax income of KRW 23.2 billion (US$23.7 million). Compared to the third quarter with sales of KRW 87.7 billion (US$89.8 million), operating income of KRW 23.1 billion (US$23.6 million) and pre-tax income of KRW 24.5 billion (US$25 million); sales grew by 10% while operating income and pre-tax income fell by 13% and 5%, respectively. Sales continued to grow for three straight quarters recording growth of 7% in the second quarter and 10% in the third quarter.
In terms of regional figures: domestic sales stood at KRW 54.7 billion, similar to the previous quarter, and North America and Europe marked sales of KRW 26.2 billion and KRW 7.8 billion up 37% and 22% respectively from the previous quarter. Japan saw sales grow by 3% to KRW 7.9 billion due to the strong performance of the Lineage series. Regional sales based on percentages showed Korea with 51% of total sales, North America 27%, Europe 8%, Japan 8% and overseas royalties 6%. With a domestic (Korea) to overseas sales ratio of 51/49 and increased overseas sales, NCsoft continues to demonstrate its position as a global company.
A breakout of sales by product line indicates that Lineage and Lineage 2 had a strong performance in Q4. With the success of the Episode 4 update, Lineage contributed sales of KRW 29.8 billion, up 6% from the previous quarter and Lineage 2 recorded sales of KRW 30.3 billion, up 2% from the previous quarter. City of Villains which launched in the fourth quarter in North America and Europe, followed the success of its predecessor, City of HeroesÂ®, and marked sales of KRW 15.8 billion, up 146% from the previous quarter.
For 2006 business goals, NCsoft is anticipating sales of KRW 396 billion and operating profit of KRW 66 billion. The regional sales mix is expected to be: Korea 53%, North America and Europe 30%, Japan 10%, and overseas royalties 7%. Sales by product mix is anticipated to be: Lineage 27%, Lineage2 29%, Guild Wars 13%, City of Heroes/Villains 10%, new games 14% and royalties 7%.
Under this year's motto of "Global Infrastructure, Local Content," NCsoft is planning to continually make investments this year to establish its next generation game portfolio. In parallel, NCsoft is poised to reinforce its brand value as a global player by developing well made games that are successful in the global market.