Good morning and good evening. Thank you all for joining the conference call for the Pearl Abyss earnings results. This conference will start with a presentation followed by a Q&A session. If you have a question, please press star and one on your phone during the Q&A. Now we will begin the presentation on Pearl Abyss's Fiscal Year 2025 Annual Earnings Results.
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Greetings. I am Kim Ye-eun from Pearl Abyss IR team. First of all, I express my deepest gratitude to the analysts and investors in and out of Korea for taking part in the 2025 Q4 and Full Year Pearl Abyss Earnings Presentation, despite your busy schedule.
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Before elaborating on today's business results, I would like to ask for your understanding regarding the following. The financial and business results contained in today's earnings release have been prepared for the convenience of investors and are subject to change depending on the final closing of our books. In addition, the accuracy and completeness of the financial and business results in the earnings results material are not guaranteed, and the company is not obligated to give updates of the accounts given after this date. So please take these factors into consideration.
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We have here with us at the earnings presentation today, Pearl Abyss CEO Heo Jin-young, CBO Kim Kyung-man, and CFO Cho Mi-young. We will first hear the business performance presentation highlights from CFO Cho Mi-young, and then engage in a Q&A session.
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Greetings, everyone. I am Cho Mi-young. Thank you once again for taking part in our company's earnings conference call despite your busy schedule.
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I would like to cover 2025 major business activities and performance. Black Desert and EVE in 2025, through consistent updates, provided more exciting content and continuously expanded the game. In particular, Black Desert Online showcased new region Edania, adding new stories and received positive response from users. Console launched PS5 and Xbox Series X|S versions, provided quick updates, and saw significant increase in results. Mobile, in addition, with content expansion, introduced and reorganized new systems and showed consistent performance. In addition, Black Desert revenue, with continuing consistent communication with users, including Heidel Ball and Adventurers Festival, showed a slight increase even after 11 years since launching and solidified its presence as a long-running title. EVE Online, also based on the two expansion packs in 2025 and consistent communication with users, demonstrated growth even in its 22nd year of service and continued a stable trend.
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In Q4, Black Desert opened a new season of 3v3 PVP content, Arena of Solare, and continued to expand content with the launching of new class Seraphim. Due to the weakening of the large-scale updates which took place in the previous quarter, revenues were weakened. For console, we swiftly updated Atoraxxion and Edania, which were first featured online and worked to continue to make the game fun and exciting.
For mobile, we improved the new season with strengthened growth and compensation structure, expanded Land of the Morning Light series and along with improved user satisfaction improvement, saw a significant increase in revenue.
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For EVE Online, we showcased the expansion pack Catalyst, which introduced sweeping changes across mining and exploration and dramatically improved user participation, including an increase in account reactivation. Revenues also exceeded monthly forecasts, achieving the highest quarterly revenue since the pandemic.
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Crimson Desert, last year in order to target the global market, started with the Benelux Media Demo in March and emerged as a standout in major game shows, including Gamescom, Summer Game Fest, and Tokyo Game Show, leading to successful Crimson Desert promotion. In addition, starting with the announcement of the launch date at Sony's State of Play in Q4, we continued diverse marketing activities with more partners. In particular, Crimson Desert was chosen as October IGN First, and there were a total of six reveals, including the Crimson Desert combat system, open-world, quest, and new boss fights, and with the countless influencers' voluntary review videos which were uploaded, we were able to enjoy substantial marketing effects. In addition, we opened a Crimson Desert pop-up store in Korea with AMD and provided an optimized gaming experience to local users.
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EVE Frontier continued Founder Access Test. In particular, we believe that the fourth test we did in December was a new phase of testing, which was based on our user feedback so far, and we believe that it will be the cornerstone in defining the game. In addition to the test, procedures for transitioning to the next stage as a blockchain platform are progressing smoothly.
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Next, I will cover 2025 Q4 results. Q4 operating revenue posted KRW 95.5 billion, a 10.6% decrease QoQ, and operating loss and net profit loss each posted KRW 8.4 billion and KRW 14.4 billion respectively, and turned a loss.
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I will explain in more detail related to the operating revenue. First is operating revenue for major IPs. This quarter's Black Desert IP operating revenue posted KRW 63 billion, a 20.8% drop QoQ. EVE IP operating revenue posted KRW 27.3 billion, a 30.8% increase QoQ. For the regional operating revenue breakdown, it recorded 16% for Korea, 18% for Asia, and 66% for North America and Europe. In the case of operating revenue for platforms, it was 82% for PC, 13% for mobile, and 5% for console.
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Next is operating expenses. Q4 operating expense posted KRW 103.9 billion, an 8% increase QoQ. For labor expenses, we had a temporary expense increase due to subsidiary restructuring on a one-time basis, and we also had the increase in Crimson Desert QA test personnel. It recorded KRW 50.7 billion, an 8.4% increase QoQ. For your reference, Q4 head count is 1,363 and there are 793 developers among the total count, which is 58% of the total. Commissions expenses recorded an 8.3% decrease QoQ, posting KRW 19.2 billion. Advertising expenses posted KRW 12.3 billion, a 9.6% decline QoQ with cost-efficient implementation of Crimson Desert marketing expenses.
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Last but not least, I will walk you through 2026 major highlights.
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Regarding Black Desert, celebrating our 12th anniversary this year, also in 2026, we will do our best to sustain our long-term popularity by delivering diverse content that inspires a continuous sense of challenge. First in Q1, for Black Desert, we will first improve content, including reorganization of Alchemy Stone, and hold large-scale events with our 10th year anniversary in North America and Europe. In case of Black Desert Console, we will first update the new class Seraphim, which was first featured in online and mobile, and will hold a master class PvP contest commemorating the sixth year of console cross-play. In the case of mobile, with our eighth year of service, we will have a large-scale remastering, including upgrading of graphic system and the overall playing environment.
In addition, we will also support PC client and not be limited to a mobile environment, and allow users to selectively enjoy according to the environment that they want. We will have sustained gameplay by improving ease of control and mitigating the fatigue associated with extended gameplay. Apart from this, in 2026, we will expand offline events where we can directly meet our users in more diverse locations. In particular, to commemorate our 10 years of service of Black Desert in North America and Europe, we plan to hold a Heidel Ball in North America and hold Voice of Adventurers in Europe and Korea.
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For EVE, we plan to continuously expand our game with two new expansion packs in 2026. In addition, we will hold our EVE Fanfest to strengthen our communication with users.
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We are also smoothly preparing for new titles to secure new growth engines. First, EVE Frontier this year as well will continue tests and focus on attracting new users, and in this process, we will more thoroughly prepare for a blockchain platform. For Crimson Desert, with our upcoming launching next month, we plan to ramp up marketing efforts. Starting with the Gone Gold announcement in January that signaled imminent release, we announced collaboration with Fortnite and pre-order with Epic Games Store, and interest in the game is reaching new heights following the release of new recent preview videos.
In addition, we plan to hold preview events for influencers and media in various global locations to showcase new content that has not yet been unveiled, thereby building anticipation. DokeV is also quickly accumulating assets based on BlackSpace Engine. After launching Crimson Desert, we will allocate more development resources to the DokeV team and accelerate the progress. In addition, we will make every effort to share our development progress at a suitable time this year.
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Crimson Desert, after it was first revealed at G-Star in 2019, went through around seven years of development and is set to launch next month. We took on the AAA console game as a challenge for the first time, and there were many ups and downs, but we are confident that we will have great results in the global market with our high quality and exciting game. Sony, Epic Games Store and many other global media and partners have actually chosen Crimson Desert as the most anticipated game of the year, and expectations are continuing to rise steadily. As many of you have been waiting, all the employees at Pearl Abyss will do our best until the end to deliver the best open-world game so that we can deliver results worthy of your continued support. We kindly ask for your continued interest and encouragement. Thank you very much.
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With this, we will conclude Pearl Abyss 2025 Q4 and annual business results presentation and start our Q&A session.
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Now Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone.
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Currently, there are no participants with questions. Please press star one, star and one to give your question.
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The first question will be provided by Seung Ho Choi from DS Investment & Securities. Please go ahead with your question.
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Thank you very much for this opportunity. I am Seung Ho Choi from DS Investment & Securities. I have several questions, and my first question is about Crimson Desert. I know that you will soon have its launching in a month or so.
My question is about your marketing activities. Can you tell us about what they will be, and can you give us some guidance about Crimson Desert marketing expenses? Other than that, I'm also curious about whether you have other demos in plan or any other ways that you're going to use to strengthen your marketing activities. Also, I know that in the market, some are worried that after the launching, we're not going to see a lot of the solid results that can be soon predicted for 2027, for 2028. Can you tell us about your financial plans to have very robust and solid financials in 2027 and 2028 with maybe new titles in plan or preparations for DLC? Thank you very much.
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I think that your questions were a result of your keen interest, and I also think some concern. Thank you very much for your questions. First, I would like to answer your questions about marketing plans.
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Currently, for Crimson Desert, with our upcoming launch, we are in the final stages of polishing and quality upgrade level.
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In the case of marketing, after we had announced that we had gone gold, along with the collaboration with our partners and through media interviews, we have been enhancing anticipation about our games.
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Also, from the end of February, we're going to have preview events for the global media and influencers, and we are going to unveil diverse content that hasn't been shown before.
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However, regarding your question about further demos before the launching, because we want to focus on the characteristics of the open world and to focus on our final touches before our completion, we are going to, rather than have those types of demo, types of widespread test through platform, have offline preview events for major media around the world and for influencers in the end of February.
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In addition, through staged review code distribution, we are going to support more media so that they can review our game more thoroughly and do our best so these results can lead to maximization of our marketing effects.
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We will engage in more timely and meaningful marketing until the launching of next month so that we can have good performance.
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I would like to cover the marketing expenses that you asked about.
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In Q1, since we have the imminent launching of Crimson Desert, we are going to have diverse marketing activities, such as collaborating with the media to promote Crimson Desert that can lead to real sales. We believe that compared to our average expenses, the related expenses will go up. However, after the launching of Crimson Desert, we are going to have our marketing expenses that will go down to the level below our quarterly average. On an annual level, we believe that it will not be a level that is a burden.
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You also asked about our roadmap after our launching of our new title. Because we have the imminent launching of Crimson Desert soon, we are focusing all of our efforts on the successful launching.
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After the launching of Crimson Desert, we are going to consecutively also have the showcasing of DokeV and PLAN 8. Also, according to the market needs, have expansion to DLC and multi-play as well.
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For Crimson Desert, because we had to develop the BlackSpace Engine in parallel, it took more time than we had expected. However, since we have reached the stabilization stage of the BlackSpace Engine, we now have an environment where from the next title, DokeV, we can concentrate our efforts on just developing the game alone. Accordingly, we believe that we will have a great reduction in the development time of different projects.
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In addition, through the development process of Crimson Desert, we have now accumulated great experience and know-how internally regarding consoles. We believe that by efficiently managing development and other preparation work, we are going to have less of a launching gap between new titles.
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We know that many of you have been waiting to hear news about DokeV from last year, and we were actually trying to share with you the development updates at an appropriate time last year, but we are sorry to say that because we needed to focus on the marketing for Crimson Desert, we were not able to share with you those news.
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Regarding the scheduling, taking into account our preparation phases for the Crimson Desert case, because we needed at least one year or so of preparation for the launching, even after we had completed the game, we believe that after the launching of Crimson Desert, we will need about two years of time to prepare. Regarding the details about DokeV, after the launching of Crimson Desert, we will make sure to communicate in more detail to you within this year. We also will concentrate all of our efforts here so that we can have the future titles that will be launched periodically with stable intervals.
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We had the answers given by our CEO, Heo Jin-young, and CFO, Cho Mi-young.
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If you have any questions, please press star and one.
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It seems that we do not have further questions in the queue. With this, we will conclude Pearl Abyss 2025 Q4 and Fiscal Year Full Year 2025 Earnings Call. Thank you for your attendance.