NCSoft Reports Positive 2005 Financials

South Korean-headquartered MMO publisher and developer NCsoft has announced its revenues for the fiscal year that ended December 31, 2005, recording impressive sales of KRW (Korean Won) 338.8 billion (US$346.5 million), and somewhat reduced profit of KRW 76.6 billion (US$78.3 million) and pre-tax profit of KRW 84.6 billion (US$86.5 million) based on its 2005 financial statement. Sales grew by 17% from the previous year (FY2004), though operating income and pre-tax income fell by 21% and 13% respectively, partly due to the company's continued spending on expansion. According to NCSoft, the financial results were driven by the perennially popular, at least in Korea, Lineage and Lineage 2, which have historically stable sales records, but other revenue includes that from sales of the non-subscription-based Guild Wars, which launched service in the first half of the year and Cryptic's superhero follow-up City of Villains, which was released in the second half of 2005. Overall, regional sales based on percentages showed Korea with 51% of total sales, North America 27%, Europe 8%, Japan 8%, thanks to a strong performance frmo Lineage, and overseas royalties 6%. With a domestic (Korea) to overseas sales ratio of 51/49 and increased overseas sales, NCsoft continues to expand globally A breakout of sales by product line for the quarter indicates that Lineage and Lineage 2 had a strong performance in Q4. With the success of the Episode 4 update, Lineage contributed sales of KRW 29.8 billion, up 6% from the previous quarter and Lineage 2 recorded sales of KRW 30.3 billion, up 2% from the previous quarter. City of Villains, which launched in the fourth quarter in North America and Europe, followed the success of its predecessor, City of Heroes, and marked sales of KRW 15.8 billion, up 146% from the previous quarter. For 2006 business goals, NCsoft is anticipating sales of KRW 396 billion ($408 million) and operating profit of KRW 66 billion ($68 million). The regional sales mix is expected to be: Korea 53%, North America and Europe 30%, Japan 10%, and overseas royalties 7%. Sales by product mix is anticipated to be: Lineage 27%, Lineage 2 29%, Guild Wars 13%, City of Heroes/Villains 10%, new games 14%, and royalties 7%.