NC Corporation (KRX:036570)
South Korea flag South Korea · Delayed Price · Currency is KRW
270,500
-7,000 (-2.52%)
At close: Apr 30, 2026
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Earnings Call: Q4 2024

Feb 12, 2025

Moderator

Thank you for the opportunity. I have two questions. It seems like the voluntary resignation program has been implemented greater than expected. So I was wondering if you have any additional plan for company restructuring. And I think that most of the teams that were affected by restructuring were regarding non legacy IPs.

So does this mean that HQ will focus on MMRPGs while the other genre investments will be made by investees or subsidiaries? And my second question is about Tekton. So are you still planning on releasing this game in the first half of this year? And do you have any like additional marketing plans to utilize channels like game shows for your company? So for your question regarding headcount plan, last year, other than last year, we announced that we are aiming to reduce our employment size to the 3,000 level from 5,000.

And in February 1, we have completed the spin off programs for our four branches and we have successfully reduced the headcount to 3,001 people and including the spin offs that we have made last year. So 1,000 people have been moved to our subsidiaries while eight people were affected by the voluntary resignation program. But I can now say that we don't have a specific headcount target for our future optimization plan. Although in order to make our structure more efficient continuously, we're going to do some efficiency initiatives, but we don't have a specific headcount target. And at a higher level, we can say that our existing IPs will be Ninja Light Games, Aion and Blade and Soul, and these will be implemented by HQ, while new titles will be pursued by subsidiaries, studios and investees.

That's a high level direction that we would like to take. So regarding your question about Tekken, we have made a spin offs for our studios for each game. But previously, we didn't really have a separate publishing entities within the development team, but we actually matched the HQ publishing teams with the games based on their genre. And we were able to establish some effective publishing plans through these initiatives. And for Project LLL, we think that we will be able to release the game within the second half of this year as we have conducted FTT and CBT in Q2.

But for Tekton, considering that it's an MMRTS genre and the user base is not that great, but it's a lot of whale users, but marketing costs needs to be significantly invested. So although the development has been made, but we are still considering to make some polishing regarding the release plan. Based on the comments that were shared by our publisher, the team is improving the wild points of the projects. So we are so I would like to apologize for the delay of the release, but I would like to make sure that this is not a matter of development, but it is a matter of making the project to be more polished in terms of releasing and publishing. Publishing.

So regarding your question about marketing, it is true that we got a lot of criticism last year in terms of development, publishing, marketing and user communication. And starting from the last year, we have continued to look into how can we improve these aspects. And to be short, we are focusing on having a great marketing and release plan targeting for each IP games that we will be released for this year. And also we are conducting feedback evaluation in terms of the technological side that we have strengthened. So more fundamentally, I think that having a user driven pre fab is more important when it comes to our games.

So we want to go back to the basics when it comes to our game. And so for marketing, for previously in the previous trend, many companies focused on large brand marketing for blockbuster titles, but I think that things have changed a lot these days. Most of the games are focusing on user communication through FTT and CBT. So we want to take this kind of approach for our marketing plans as well. So in terms of your question regarding whether we will utilize channels like game shows, I think we need to have further analysis on the ROI of marketing side.

So what we want to do is that we want to pursue communication or marketing plans tailored to each IP. So based on this perspective, there could be a chance that some IPs will be beneficial for using participating in game shows, but some IPs it will be not. So our first principle would be focusing on user feedback, utilizing FGT and CBT. And second thing that we need to do for marketing is to consider whether we focus on UA or brand marketing. And third thing is that we have to make specific strategies tailored to each market of the games, whether we utilize channels like game shows or influencers.

So based on these principles, we want to strengthen our ROI analysis. One thing I would like to mention, there have been some concerns whether we have enough publishing capabilities in terms of the shooter games that we are developing. But there are three things that I would like to point out. Although we have done a reduction of headcount in a greater scale, but we are going to continue to secure necessary talent. For example, we have appointed a new CEO last year for NCA and we have recruited many marketing specialists in terms of shooter games through NCW and they have been joined by and joined with NCA.

So we are going to continue to improve our capabilities on the global marketing side in terms of shooters. And I think there are few games, some games that need to be focused on the NA and EU markets. So because of that, we have intensive capabilities on the North American side through NCA and we're going to do the same approach for Europe and Southwest Asia as well. And as you may know, we have already established a joint venture in Southeast Asia. So throughout these initiatives, we are going to continue to improve our publishing capabilities.

And more importantly, we are going to make a cluster of shooter games, as I mentioned before. So although I cannot disclose every detail of the project, but until next year, including in house development games and games that are developed by external partners, there will be six titles that will be released in the shooter genre. Of course, all of these games will have different unique game characteristics, but I want to emphasize that we are going to make a cluster of the shooter games. The following question will be presented by Kim Jin Go from Qum Securities. Please go ahead with your question.

Thank you for the opportunity. I have a general question regarding your AI roadmap. And recently, you have revealed LLM for Barco. And I was wondering if you could give us more visibility into your future roadmap. Do you have a potential to collaborate with external clients?

And in terms of cost evaluation, I think if you are going to apply this technology in house, I think it will be mostly focused on how to utilize this in the game experience. So since you have MMORPG as your legacy genre, maybe if you utilize AI in the gameplay, it will greatly enhance the experience. So I was wondering if you could give us more visibility into that. What's your general perspective on this AI technology? What's the potential of this project?

And do you have any preparations for that? So for your AI your question regarding AI to be short, I think AI technology is a must, not a choice. And I want to emphasize that for a long period of time, we have focused on developing AI technologies and we have looked into how these AI technologies can be applied to game development. And thirdly, I think we need to consider how we can define AI generally, because there are many types of AI technologies, including open source NLM and vertically applied API technologies. So as you may know, for over the past seven and eight years, we have focused on developing LLM.

But last year, after the huge successful launch of JetGPT, we already see successful LLM models and other APIs in the market. And even before then, we our developers have utilized AI technologies in many aspects of game development. More specifically in terms of art, they have used stable GPU. And for coatings and design, they have used Chetupt and Copilot. So I could say that most of the developers are using AI technologies when it comes to game development.

But for our AI, it has more specialized assets that are tailored to our company, including MMO sectors and middle aged fantasy. These assets that we have are the strength that we have for the AI technologies. So we are now focusing more on investing in SLLM development, while for the general ones, we are trying to use open source AI. So I think there are three points that we can make for our AI. First, we have a significant level of implementation and cost reduction effects for our AI in terms of game development by applying the technologies into TTS, animation analysis, multilingual chat translation and localization.

And second thing is that for operations, we can utilize this AI for analyzing in game data and using chat box and spam filtering. And thirdly, it can also greatly enhance the efficiency of the Q2A process. And the reason why we have spun off our NC AI it is because we want to make sure that all of our development teams and business teams are going to have the most tailored model for them to use whether it could be our AI or external API. But I want to emphasize that our AI has a strength in many areas that I've mentioned before. So while improving on these strengths, we want to also monetize our technologies by providing the solutions to other developers.

So although we are going to also have publishing deals and investment opportunities with external studios, but we will be able to provide AI technologies as a strength of a publisher. So we can provide support in terms of animation assets and also we are already supporting our investee in terms of localization and chat translation through our AI technologies. And also we can provide AI based data in game analysis tool as well. So there are a lot of possibilities that we can consider in terms of monetizing and commercializing this AI solution. So thank you for attending our earnings call.

And I believe last year in last year, we have prepared a long term. And although there have been a lot of costs incurred as a one off basis, but starting from this year, we will continue to lay a foundation for another leap in the first half of this year. But in the second half of this year, we're going to make a turn around. And I believe that I think the darkest night the night is darkest before right before the sunrise. So I think for the future, we're going to have a brighter future soon in terms of the earnings performance.

So we're going to continue to improve our gameplay characteristics and marketing plan. So I would like to continue to ask for your support in this regard. And for through many opportunities, we'll make sure to continue to communicate with our analysis and users and we will be open to get honest feedback from our analysis and users. So I think giving an honest user feedback is more important than setting internal goals within ourselves. So through the user indicators, we will make sure to have more accurate levels of targets for our sales.

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