NCsoft profits drop by more than 40 per cent

Korean games company NCsoft has posted a 41 per cent decrease in pre-tax profits, blaming the fall on increased costs relating to product development.

During 2006 consolidated sales stood at KRW 338.7 billion (EUR 278 million), with titles such as Lineage II continuing to perform well.

Pre-tax profits were down to KRW 50 billion (EUR 41 million). According to NCsoft, this was due to a one-time write-off for Auto Assault and rising investment in new products. The company last year introduced plans to release more than one MMO title and several casual games annually.

"To accomplish this goal and establish a strong product pipeline, we plan on an 18 per cent year-to-year increase in the development budget this year as well," said chief financial officer Jaeho Lee.

"After several years of spending on development costs, we believe the fruits of these labours will finally begin paying off soon."

NCsoft's forthcoming titles include MMORPGs Tabula Rasa and Aion. The company has forecast sales of between KRW 358 billion - 367 billion (EUR 295 million - 303 million) for 2007, while operating profit is expected to reach KRW 42 billion - 49 billion (EUR 35 million - EUR 40 million).