Wemade posted an operating loss in the second quarter due to a drop in mobile game sales and a base effect from one-off revenue in the previous quarter. It reduced the loss from a year earlier through cost efficiency and plans to pursue a rebound by promoting a lineup of new titles including Night Crows W.

Wemade said on Tuesday it posted second-quarter consolidated revenue of 108.3 billion won, an operating loss of 21.0 billion won and net profit of 3.5 billion won.

Revenue fell 29 percent from the previous quarter and 7 percent from a year earlier. Operating profit swung to a loss from a 8.5 billion won profit in the previous quarter, but the loss narrowed from an operating loss of 28.5 billion won in the second quarter of last year. Net profit fell 83 percent from the previous quarter but returned to profit from a year earlier.

Game revenue falls 8 percent; mobile down, PC online up

Game segment revenue was 105.7 billion won, down 8 percent from both the previous quarter and a year earlier. Mobile game revenue was 89.2 billion won, down 15 percent from the previous quarter and 12 percent from a year earlier, affected by lower sales from existing service games.

PC online game revenue, however, was 16.5 billion won, up 57 percent from the previous quarter and 26 percent from a year earlier. Event effects for Flyff Universe and other factors contributed to the increase.

The licensing segment posted negative revenue of 2.8 billion won. In the first quarter, one-off licensing revenue related to the end of an intellectual property royalty dispute over The Legend of Mir 2 was reflected, but that effect disappeared in the second quarter. The process of clearing some unsettled receivables was also reflected, widening the overall decline in revenue.

Blockchain segment revenue was 5.1 billion won, down 32 percent from the previous quarter but up 739 percent from a year earlier. It maintained year-on-year growth due to the tokenomics effect of Legend of YMIR Global, but revenue fell from the previous quarter as in-game transaction volumes naturally declined as the service period elapsed.

Cost efficiency efforts also continued. Second-quarter operating expenses were 129.2 billion won, down 11 percent from both the previous quarter and a year earlier. Labor costs were 55.8 billion won, down 5 percent from the previous quarter and 9 percent from a year earlier, and advertising and promotion expenses were 12.6 billion won, down 51 percent from the previous quarter and 11 percent from a year earlier.

Fees and commissions, however, rose to 43.1 billion won, up 18 percent from the previous quarter. Revenue-linked costs, including app market and developer fees, edged up 1 percent to 31.6 billion won, while other fees surged 286 percent from the previous quarter to 9.1 billion won.

The cumulative first-half results showed a sharp reduction in losses. Wemade's first-half revenue was 261.6 billion won, slightly up from 258.7 billion won a year earlier. Operating loss for the period was 12.5 billion won, down 27.4 billion won from 39.9 billion won a year earlier. First-half net profit was 23.4 billion won, swinging to profit from a 48.9 billion won net loss a year earlier.

More than 20 new titles secured; preparing to launch Night Crows W

Wemade plans to push for a performance rebound by expanding new game launches. The company said it has secured a lineup of more than 20 new games, including expansion of existing global IP and new blockbuster titles.

Key titles include Night Crows W, MIR5, Project Tal, MIR4 China, a new title based on the Hundred Note IP, N.O.A.H, console Project IL and Project MO. It is broadening genres and platforms to action RPG, subculture RPG and consoles from its existing MMORPG-centered business structure.

Wemade has fixed the name of a new title using the Night Crows IP, which has delivered results in global markets, as Night Crows W and is preparing a simultaneous global launch. The existing Night Crows also obtained a foreign-capital publishing license for entry into the China market in June.