Netmarble, a leading mobile game company, has released its latest financial report which reveals a significant slump in earnings and sales. The report shows a 49% decrease in EBITDA earnings and an 8% drop in sales year-on-year.
In the second quarter of 2023, Netmarble recorded total sales of $465.98 million and EBITDA earnings of $8.38 million. However, the company also reported operating losses of $28.76 million and a net loss of $34.04 million. Interestingly, 84% of Netmarble’s sales came from overseas, totaling $400 million. While the total sales only grew by a marginal 0.1% quarter-on-quarter, the EBITDA earnings dropped significantly by 46.3%.
Netmarble’s CEO, Young-sig Kwon, commented on the financial results, stating, “We’ve witnessed sustained growth from games like Tower of God: New World and our Stone Age IP game, which have both achieved top rankings in various app stores. Despite the challenges faced in the first half of the year, we are excited to launch new titles, such as Arthdal Chronicles and Solo Leveling: ARISE, in the second half.”
Concerns about Financial Performance
Although a year-on-year decrease in earnings is not particularly alarming, the steep 46% drop in earnings quarter-on-quarter is cause for concern. This suggests that the mobile gaming industry, which experienced explosive growth during the COVID-19 pandemic, is still facing challenges in returning to pre-pandemic levels. Netmarble had previously enjoyed significant success in 2021 and 2022, even making it onto the Top 50 list, but the correction in earnings has impacted the company.
Netmarble had pinned its hopes on major launches in China to fuel its recovery. However, the delayed release of these games appears to have had a significant impact on the company’s financial performance. Moving forward, Netmarble plans to focus on upcoming releases and continue building on its strong portfolio, which includes popular titles like Marvel: Contest of Champions, in order to regain momentum.