South Korean game companies' second-quarter report cards are expected to be divided by the profit base provided by existing intellectual property (IP), rather than whether they released new titles.

Krafton and NC, which hold existing IP such as Battlegrounds and Lineage, are expected to see results improve sharply as new-title and acquisition effects add to performance. By contrast, Netmarble is expected to see profitability slow due to the cost burden of new titles even if revenue rises, and Nexon is also expected to take a breather.

According to second-quarter consensus estimates compiled by financial information provider FnGuide on July 28, Krafton's revenue is expected to rise 81.4 percent from a year earlier to 1.2007 trillion won. Operating profit is forecast to increase 52.4 percent over the same period to 375.0 billion won.

A key factor seen driving Krafton's improvement is the PC version of Battlegrounds (PUBG). Traffic and revenue are believed to have risen together as a 9th anniversary event, collaborations with Stellar Blade and aespa, and Black Market updates continued. The new title 'Subnautica 2', released in early access in May, is also expected to support results with sales of around 5 million copies.

Still, Dong-hwan Oh (오동환), an analyst at Samsung Securities, said, "Subnautica 2 was a box-office success, but the financial contribution is limited due to high acquisition costs." The title lifted top-line growth, but an analysis suggests Battlegrounds still accounts for a stable profit base when considering the cost of acquiring Unknown Worlds and the future burden of performance-based compensation. Performance-based compensation costs remain a variable for net profit.

NC's second-quarter revenue is forecast at 682.7 billion won, up 78.5 percent from a year earlier, and operating profit is projected at 131.9 billion won, up 774.8 percent.

Factors cited behind the improvement include 'Lineage Classic', released in February, and the mobile casual platform 'JustPlay', acquired this year. Lineage Classic, based on the existing Lineage IP, is estimated to have maintained average daily revenue of 1.7 billion to 2.0 billion won even though PC bang traffic has fallen from the initial launch period, supporting results. With JustPlay reflected in consolidated results from the second quarter, NC's mobile casual revenue is estimated to expand to around 140.0 billion won.

Hyo-jin Lee (이효진), an analyst at Meritz Securities, said, "The strong performance of Lineage Classic offset the decline in Aion 2, and PC revenue succeeded in defending the quarter." By contrast, 'Aion 2', released last November, is estimated to have posted lower revenue than the previous quarter due to a content overhaul period ahead of an update.

By contrast, Netmarble is expected to see profitability worsen despite revenue growth. Netmarble's second-quarter revenue is expected to rise 2.3 percent from a year earlier to 734.0 billion won, but operating profit is forecast to fall 12.1 percent over the same period to 88.9 billion won.

The result is seen as the burden of marketing costs for new titles and fees paid for external IP exceeding the increase in revenue, rather than a drop in sales.

Jun-ho Lee (이준호), an analyst at Hana Securities, said, "The titles released in the first half, 'The Seven Deadly Sins: Origin' and 'Mongil: Star Dive', fell short of expectations, and even the rebound in existing titles appears not to have offset the increase in marketing costs."

The fee payout ratio to revenue is expected to rise 1.5 percentage points from the previous quarter to 32.3 percent. In the securities industry, an assessment has emerged that companies must prove their product lifecycle (PLC) management ability to sustain revenue after launch rather than focusing on how many new titles they release.

Nexon, listed on the Japanese stock market, also projected that the second quarter would be a breather. Nexon's forecast second-quarter revenue was estimated at 107.0 billion to 119.7 billion yen (995.9 billion to 1.1143 trillion won), ranging from a 10 percent decline to a 1 percent increase from a year earlier. Forecast operating profit is 16.1 billion to 25.3 billion yen (149.5 billion to 236.0 billion won), down 33 to 57 percent, and net profit is 16.1 billion to 23.2 billion yen (149.8 billion to 215.8 billion won), ranging from a 4 percent fall to a 38 percent rise.

Nexon's profitability slowdown has a different cause from Netmarble's. A decline in PC and mobile revenue for Dungeon & Fighter in the China market and the base effect burden from Mabinogi Mobile are cited as factors behind the fall in operating profit. Still, long-running live services such as MapleStory and FC Online and FC Mobile are expected to continue stable revenue, supporting the downside in results.

In the second half, major game companies are expected to pursue new titles and expansions of existing IP, putting differences in their ability to recoup costs back on the test.

Krafton plans to unveil 5 new titles at Gamescom 2026, which opens on Aug. 26, including an unreleased new title based on the Battlegrounds IP and 'NO LAW'. NC plans to officially launch 'Aion 2 Global' on Sept. 30 via Steam and Purple, and to step up its global push by showcasing new titles at the Tokyo Game Show. Nexon also plans to release 'Dunpa Raising' in the second half based on the Dungeon & Fighter IP, while Netmarble is preparing 5 new titles including 'Solo Leveling: KARMA'.

In the second half as well, variables likely to determine results will be existing games' ability to maintain revenue and the speed of recovering investment costs, rather than the number of new titles released. Given the burden of large-scale marketing and platform fees, it is difficult to secure profitability on the strength of early box-office success alone. Cash flow generated by existing live games and the ability to manage the product lifecycle of new titles are likely to determine profit gaps among game companies.

An industry official said, "Even if a new title generates revenue right after launch, it must maintain revenue over a long period to lead to a meaningful contribution to profit," adding, "The gap between companies that have secured stable cash flow from existing live games and those that have not may continue into the second half as well."