1 trillion, up 24% YoY
Date: February 8, 2023 (Wed) 09:00 True Seek: CEO CHO Tae-hyun, CHO Hyuk-min CFO Contents of presentation: Aka Games 2022 performance and game launch schedule/strategy
■ Aka Games Summary 4Q and annual performance summary, new schedule ▣ Summary of sales -Annual sales of KRW 1.1477 billion (+13.3%) The largest sales record for the station, and continuous growth since 2019 -4Q sales of KRW 235.7 billion (electricity-23.2%, +17.8%last year), operating profit of KRW 10.8 billion (electricity-75.3%,-76.2%), net profit loss of KRW 267.7 billion (deficit) B mobile game 151.7 billion won (electricity-23%,-24.2%), PC game 10.8 billion won (electricity-19%,-44%last year), other 73.2 billion won (electricity-24.2%, +8.6%last year)
▣ Cost configuration -48 billion won in the fourth quarter (electricity-14.6%,-6.8%last year) -Labor cost of KRW 52.6 billion (electricity +8.9%, +13.4%last year) T temporary increase in the fourth quarter, including securing and bonuses for new development talent for subsidiaries -Payment fee 84.9 billion won (electricity-23.3%,-18.8%last year) ㄴ Market fees and developers' RS reduction due to game sales fluctuations -Marketing cost of KRW 15.2 billion (electricity-27.3%,-29.1%last year) ㄴ Increasing existing game marketing efficiency -The other 51.2 billion won (electricity-17%, +3.5%last year) B cost decrease due to the decrease in sales in the non-game sector
▣ Profit configuration -Annual operating profit of KRW 1777 billion (+58%), operating margin 15.5% B record of the largest operating profit ever, continuous growth since 2019 -4Q operating profit of KRW 10.8 billion (electricity-75.3%,-76.2%) -Tract to damage 267.7 billion won in the fourth quarter (deficit turning) ㄴ 'Lion Heart Studio' Investigation for one-time processing due to confirmation and evaluation costs due to changes in the share price of related companies
▣ Business status -'Odin' global expansion and 'Umamusume' launch performance and non-game growth records record sales and operating profit records annual sales -4 quarterly decreased sales and operating profit by adjusting the new launch schedule. -'Umamusume' sales rapidly stabilized downward -'Battleground', 'Archie Age' performance maintenance, 'Lion' regional service termination -PC room sales, which were reduced due to the 19 influence of Corona, gradually recovered. -Relocate assets to secure a promising developer PC game lineup -Bring to speed up the development of Archie Age 2 -This year, with various genres and new works this year, it is expected not only in Korea but also in global performance. -Ever Soul is a new IP, but is positive for gameplay. Meaning initially in North America, and -Aka Age War is expected to make a good reservation, so large-scale struggle, which is a genre characteristic -In addition, carefully reviewed by recruiting except for special situations such as securing talent for new work development -Treat on efficiency of all costs such as labor costs
▣ New release schedule
■ Q & A Share the trends after the 'Odin' siege update at the end of last year. CHO Kyuhyun = Traffic rebounded since the addition of the siege. In the first quarter of this year, we are in the process of updating siege fun. The first appearance of the siege was also good, but it is reflected in the opinion that some modifications are needed in the user feedback.
It is focusing on more intense contents effects by winning siege victory, buffs, and improvement of rules. It is a guild content, so it is focusing on giving true siege fun through strategy. In addition to showing technical advantages, such as climbing walls that were not available in existing mobile games, we are preparing for differentiated content of 'Odin'.
We will finish the siege improvement to some extent, and we will develop large updates and events in the second half of the first quarter. The big content will be released at 11 am on the 8th.
I'm curious about the status and sales of 'Ever Soul'. CHO Kyuhyun, CEO = Ever Soul is a game belonging to the subculture genre, but is a good achievement as a collective growth RPG. Strategic battles, the Ever Soul feature, have worked. Although it is a new IP, the hurdles are lowered in terms of character design, lyrical BGM, story and game operation. The early achievements are being achieved more than we expected. By region, 60%of Korea is performing in North America and other countries. In particular, it has achieved more than expected in North America, and it continues to increase.
Every Soul is preparing to launch Japan in the second half of this year. We believe that there is a good response in the process of preparing for launching Japan, and we expect great results.
I'm curious about what is the special point of 'Archie Age War' and the schedule. CHO Kyuhyun, CEO = 'Archie Age War' recruited 1 million people in five days in advance. The encouraging was very high, even though he had made a reservation without special marketing on the first day. Internally, I believe that the expectation of the 'Archie Age' infrastructure game is significant.
The original is a successful IP with 3 million Korean subscriptions, 10 million Russians, 4 million in North America, and 10 million in China. I think the impact was reflected in the pre-booking of the Archie Age War. 'Archie Age War' is characterized by fast fostering and various competition, while equipped with maritime battles and trade.
It also has a device to accommodate unpaid users. The company plans to launch the development with a three-month update. The company plans to quickly increase the competition in the early stages by providing server transfer. In February, the showcase reveals detailed information, and if there is nothing special, we expect to launch in March.
I am curious about the specific information about the Guards Order and the 2022 G-Star Response. CHO Kyuhyun, CEO = Guards Order is a 2D action RPG with the know-how of the road complete that developed the Crusader Quest. The manual combat system with the action hand taste features a sense of operation as a console game. Manual operation emphasizes action such as paring and white attack. The emphasis on action can increase fatigue, and the Wadis Order uses the X-axis battle to implement high battles in low fatigue on mobile.
It provided 20 minutes of experience build at G-Star and was well received. In fact, overseas influencers confirmed that they voluntarily uploaded a lot of videos. It is a game that Aka Games is expected to achieve high results not only in Korea but also in global.
Are there any fluctuations in the new schedule? CHO Kyuhyun, CEO = Existing overseas expansion can be suitable for some schedule. The new works are largely 'Ares' and 'Guards Order', and the two games have already been prepared by coordinating the schedule with several new works. Unless it is a technical issue or unexpected things, it is expected that there will be no big deviations of more than a month or two.
Please introduce the 'Archie Age War' distinction to 'Odin'. CHO Kyuhyun, CEO = Simplifying can be dangerous, but I think the target customer base is different. If 'Odin' covers a wide layer, 'Archie Age War' is a game focused on competition with PVP.
The game that inherits the original philosophy is 'Archie Age 2'.
The big direction is 'Archie Age War' that provides war-related content faster than 'Odin' or other competing games, and quickly expands its expansion. Other than that, there are many differences.
In particular, 'Odin' did not affect traffic even though similar genre games were released in other companies since its launch. I think it is because Korea, especially the mobile MMORPG market, is still growing. The expansion proved 'Odin'. 'Archie Age War' is still expected to produce almost without 'Odin' and Carnival Raise through a lot of atmospheric demand.
I'm curious about M & A and global expansion plans in the business. CHO Kyuhyun, CEO = Aka Games is consistently focusing on IP. It can be vague if it is an IP, but if there is a good development team that can create its own IP and the development team, we have invested in overseas developers as well as overseas developers. There are teams who are considering paying. That part will continue similarly to the way you have done.
If you have found it first, there are many teams that are in contact with you. We are considering well, and we are not yet able to speak, but we will continue to do it.
Share the 'Archie Age War' long-term success strategy. CHO Kyuhyun, CEO = In terms of the new direction of mobile MMORPG, quality and technology are going in a very advanced direction. The game development is also good, so I am looking forward to it. 'Archie Age War' is based on the story 100 years later, but currently has a completely different kind of positioning, reflecting a lot of mainstream characteristics in mobile games. Although it is not confirmed, it will target users with mobile MMORPG needs through other direction content updates. There is a desire to make such an update to achieve long-term success. I will proceed in the direction I thought so that the wind could be achieved. We expect to be able to achieve long-term success.
I'm curious about the 'Odin' sales indicators. CHO Kyuhyun, CEO = Keep the highest indicators last year. At the end of last year, the number of concurrent users increased significantly due to the siege update. Revenue is not exactly shared, but it has risen much more than the previous quarter. However, it was limited to reflect the effect in December because it was an update in December. In the first quarter, you should watch more. Since the siege improvement work continues in the first quarter, sales expectations are conservative in the process. I think it can be expected after siege.
CHO Hyuk-min CFO = 'Odin' has a wider consumer base than other games. The requirements are different depending on the user. The development team is also in the direction of calm and firmly providing what the user demands. From the outside, the sales side may seem a little insufficient, but we have positively evaluated in terms of maintaining sales even though there is no large content update or business model update.
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