Net marble released a 3Q earnings report on the 11th, a conference call, and guided additional matters through the related questions and answers.
Net marble, which introduced the status of the third quarter, continued to introduce new works that will be released in the fourth quarter and since then, and talked about cost efficiency for improving earnings.
Instead of focusing on global strategy, the company also announced a new launch strategy centered on Asia, especially Korea.

November 11, 2022 (Fri) 14: 00 ~ 15: 00

Charm Seek: Net marble CEO Won Youngest, CEO Kiosk Lee, Lee Seung-won’s Global Division

Announcement: 3Q results, post-business strategy, RNA

■ Net marble 3Q earnings summary

Net marble’s 3Q sales amounted to W694.4bn. This is an increase of 14.4% of the same period last year and an increase of 5.1% Qom. Representative Do Kiosk said that sales increased due to the introduction of new works such as ‘Second Country Global’ and the launch of new works such as Seven Knights Revolution. However, EBITDA decreased by paying retirement contributions related to Jam City.

In the third quarter, operating losses recorded 38 billion won, net loss of W277.5bn, and controlling shareholders’ net loss of 245.3 billion won, respectively. Outlets profits decreased by 118.3 billion won from the previous quarter due to an increase in exchange rates and increased losses for foreign currency borrowings.

Over the same period, overseas sales rose slightly Qom to W57.9bn, and the share of overseas sales decreased by 2%p to 83%. North America was the highest among total sales, with the highest in North America, with 17%in Korea, 13%in Europe, 9%in Southeast Asia, and 7%in Japan. Net marble analyzed that portfolios, which have been diversified on overseas sales, continued, and the share of ‘Seven Knights Revolution’, which was increased by 2%p Qom, influenced the launch of Seven Knights Revolution.

The proportion of Net marble sales recorded 47%of casual games, 24%RPG, and 21%MMORPG. In addition, RPG sales rose 2%p Qom thanks to the Marvel Contest of Champions. ‘Marvel Contest of Champions’ is also the highest sales of all games. Subsequent 11%of Marvel Contest of Champions, the Cashing Range, the Second Country: Cross World, Jackpot World, and Match Slot accounted for 8%of sales.

In the third quarter, operating costs amounted to W732.4bn, up 26.2% YoY and 5.3% Qom. Among them, sales increased by 6.8% Qom to W278.5bn. Labor costs rose 7% Qom, up 7% Qom, depending on the payment of retirement for Jam City.

Net marble will introduce three global service works in the fourth quarter of 2022, starting with the casual game ‘Charlotte’s Table’, which will be released on November 9th. Blockchain, which is available on PCs and mobile, will be released on November 14th. ‘Paragon: The Over frame’, which is serviced as a PC and console, will start service in December.

Net marble will exhibit four games in G-Star, which will be held in Susan on the 17th. In addition to the above, ‘Paragon: The Over frame’, Sorry Open World MMORPG ‘Medal Chronicles’ Visitors are welcomed by a demonstration version.

Representative Do Kiosk said that after the performance announcement, the performance of the games released this year is not true. In addition, he added that he is trying to change structural changes by reorganizing his internal strategy and re-examining new projects in line with the rapidly changing market environment. Dew also said that he will prepare for the market expectation by showing a game that can be satisfied with users at home and abroad based on the past trial and error.

■ Q & A

She has been sluggish for the second consecutive quarter, but please explain the details. Also, how do you look at the fourth quarter of this year and next year?

= If you give a whole review, I think that the structure that is determined according to the new tower line is well known. As I mentioned earlier, the results of the new work did not meet the expectations. In terms of cost and structural problems, the last quarter was in progress that it would take the labor cost and other management to make it more efficient and efficient.

The burden on fixed costs, such as the increase in labor costs due to the increase in the number of people, will be reduced. Marketing costs change depending on the launch of the new work, but it will not increase much more than the existing share. Naturally, next year’s outlook will eventually be a variable, and the cost structure of the lower end will efficiently efficient the existing fixed costs. The commission and marketing costs, which are core fluctuations, are expected to improve efficiently. The overall cost structure is also expected to be efficient.

I want to ask a specific plan for cost control plans. Are you considering policy changes such as personnel adjustment, bonuses, welfare benefits, and major affiliates in relation to labor costs?

The basic keynote was to actively attract the development personnel to create a new game as an investment concept. However, as I mentioned last quarter, he said he would work with his performance. Although it is not an aggressive increase, he said he would proceed to the maximum efficient manpower. At that time, the efficiency part was not talking about active restructuring, so I said that I would not have a misunderstanding.

However, this time, the retirement contributions from Jam City side occurred together when the project is considered inefficient in the process of re-examining the project in overseas business. This is not a domestic business or a company overall effect. Since it is planned to be judged according to the situation by certain projects, it is possible to understand that the overall keynote will be taken as much as possible and focusing on the current workforce as much as possible.

Can you explain the change of marketing implementation plan compared to this year? Also, how is the marketing efficiency strategy?

= The company that is executing marketing is largely a structure in which four companies are marketing together with Net marble headquarters in Korea, Jam City in the United States, Adam, and then Spin X. Net marble in Korea has maintained its strategy to actively target the global market with RPGs. Although the marketing experience in the global market has accumulated little by little, it is determined that some parts have not been carried out efficiently.

Starting next year, we have revised our strategy to revise our directions to the Korean market, including some Asia, and launch it. In recent years, the company’s performance has been sluggish in the Korean market, and the company plans to take this strategy to focus on Korea as a strategy to compensate for this, and to effectively execute marketing.

In addition, there was a time when Jam City and Spin X were aggressively conducted between the late 1Q and the second quarter of this year. These parts also plan to carry out more aggressive marketing if there is a good effect on the next year’s situation, and to continue to execute efficient marketing by reducing it.

I know that there is a financial burden since the acquisition of Spin X. What is the current sales, operating profit and company situation?

= The social casino game market has been slowing since the corona calm. Considering this market situation, Spin X is criticizing it. ‘Poppet World’ is steadily growing, and sales and major indicators of existing major franchises ‘Cash Friends’ and ‘Lather Slot’ are well managed. The new work is scheduled to be released in the first half of 2023.

In addition, as a latecomer, he has only serviced on the mobile platform, but the market size is decreasing, but to another platform. In other words, the company plans to expand the market with a strategy of expanding the platform by launching a beta of the web and PC version.

How much does the situation calms when the foreign currency borrowings are converted to the acquisition of spin X and the exchange rate calms down? Also, what is the company’s foreign currency debt, and what is the effort to improve the financial structure?

The foreign exchange-related part was more than 20% of the exchange rate by the end of the year compared to the beginning of the year. It was true that the exchange rate effect was burdensome every quarter. If the exchange rate falls, the opposite effect is expected to affect the exchange rate.

In the fourth quarter, there were more than 300 billion won repayment of borrowings. In addition, the company plans to review its subsidiaries dividends and securitization of its assets in various ways, and strategically determine the market situation, and continue to reduce the size of the current borrowings.

Originally, in the fourth quarter, the Monster Arena Ultimate Battle and everyone’s Marvel: Meta World were in the launch plan. When will the game release be done? In addition, the development of ‘Medal Chronicles’, I only level up: Arab, and ‘High Squad’ has been developed in G-Star?

= ‘All Marvel: Meta World’ will be serviced in the first quarter of 2023. ‘Paragon: The Over frame’ plans to start early access in December and continue to improve without stopping the service. In addition, ‘High Squad’ will be serviced in the second quarter, ‘Medal Chronicles’ and ‘I alone Level Up: Abridge’ will be serviced in the third quarter.

The ‘Monster Arena Ultimate Battle’ P2E version dropped the project, judging that the market competitiveness is inadequate.

I was criticized for the acquisition of Spin X. It has been around for a year, and it showed an overwhelming market growth at the time, and I know that the acquisition price was also considered a premium. At the time, I would like to ask if it is still showing its growth advantage enough to justify the acquisition price, or whether the market growth is converging.

= Analysis of social casino markets in 2022 and 2023 and 2024 through an external social casino market analysis agency about a month ago