As Netmarble continues to expand its lineup of new titles, market attention is shifting beyond whether they become hits to how long they can sustain revenue after launch. With titles released from March to May this year failing to deliver results sufficient to offset marketing costs, operational staying power is emerging as a key variable that could determine second-half performance.

According to the industry on Tuesday, Netmarble posted first-quarter consolidated revenue of 651.7 billion won and operating profit of 53.1 billion won. Revenue rose 4.5 percent and operating profit gained 6.8 percent from a year earlier, but the result missed the market consensus of 69.3 billion won.

Weak profitability stemmed from a heavier marketing cost burden combined with declining revenue from existing titles. First-quarter marketing expenses totalled 168.2 billion won, equivalent to 25.8 percent of revenue. The impact of new releases such as 'Stone Age: Pet World' and 'The Seven Deadly Sins: Origin', launched in March, was concentrated toward the end of the quarter, limiting their contribution to revenue, while marketing spending before and after release increased costs first.

This structure ties to the characteristics of Netmarble's new-title strategy. Netmarble has one of the larger new-title lineups among major game companies in South Korea. Following May's 'Game of Thrones: Kingsroad', it plans to release 'Sol: Enchant' in June. It also plans to introduce five more titles in the second half: 'Solo Leveling: Karma', 'Shangri-La Frontier: Seven Strongest Species', 'Project Octopus', 'Evil Bane' and 'Project Aegis'.

In a structure of consecutive new releases, marketing burdens can accumulate. If an individual title falls short of expectations, marketing spending executed in advance can return as a profitability burden. With first-quarter releases failing to clearly exceed market expectations, this structure was reflected directly in results. That is why some analyses say the approach of maintaining marketing efficiency through a steady stream of new releases can easily hit limits in an environment of intensifying competition in the game market.

After the initial hit matters more... operational staying power is key

'Sol: Enchant', due for release in June, has fairly favourable conditions for an early hit, but its long-term operations are a variable. Developed by Alt9ine, led by developers of 'Lineage M', the game is promoting a 'divine authority' system that allows users to become a server's 'god' and influence update direction and choices such as the business model. With Com2uS' 'Zeus: God of Hubris' and Kakao Games' 'Odin Q' targeting third-quarter releases, the immediate level of competition is low. But because the structure gives users strong authority, if issues such as monopolisation of power by a particular group or distortion of the server economy arise, Netmarble's ability to respond is cited as a variable that will determine long-term revenue.

Games that have stabilised operations show a different picture. As of the first quarter this year, 'Vampir' and 'RF Online Next', released last year, accounted for 6 percent and 4 percent of total revenue, respectively. 'Raven2', which marked its second anniversary of domestic service, also maintained 3 percent. With whether new titles settle as long-term revenue sources determining earnings durability, Netmarble is also accelerating operations of existing titles.

After 'Raven2' drew a strong response enough to cause queues immediately after the launch of its specialised server 'ZERO', it opened an additional server, 'ZERO2'. 'Game of Thrones: Kingsroad' unveiled a roadmap featuring seasons on a 6 to 8-week cycle and new region updates on a half-year cycle, and 'RF Online Next' is preparing to expand into global regions. After the first-quarter earnings release, the company also said of 'The Seven Deadly Sins: Origin' that it would "continue updates in a direction that can establish a long-term PLC (product lifecycle)".

Netmarble's current second-quarter market forecast is revenue of 743.4 billion won and operating profit of 102.6 billion won. With revenue contributions from titles released from March to May and the additional impact of June's 'Sol: Enchant' release, headline growth could appear.

Lee Ji-eun (이지은), an analyst at KB Securities, said it is a time when "the importance of capabilities in long-term live operations for existing titles is being highlighted again" and that long-term operational performance of new titles must also be confirmed. What matters is not the number of new titles but how long they can hold up, she said, and that will be the variable that determines Netmarble's second-half performance.