Good morning and good evening. Thank you all for joining this conference call. Now, we'll begin the conference call of the fiscal year 2023, third quarter earnings results by NCSOFT. This conference will start with a presentation followed by a divisional Q&A session. If you have a question, please press star one, that is star and one on your phone during the Q&A. Now, we shall commence the presentation by NCSOFT.
Good morning, this is Jason Lee, Head of IR at NCSOFT. Thank you for participating in this conference call for Q3 2023. Now, let me begin my presentation with the earnings highlights. Q3 sales posted KRW 423.1 billion, representing a decrease of 4% QOQ and 30% YOY, stemming from a decline in revenue from Lineage W and Lineage 2 M. Operating profit posted KRW 16.5 billion, down by 53% QOQ, and 89% YOY, driven by a sales decline and an increase in marketing and other expenses.
Pre-tax income was KRW 46.2 billion, up by 18% QOQ, mainly due to foreign exchange gains stemming from the stronger U.S. dollar, but down by 82% YOY. Net income was KRW 44 billion, a 44% increase QOQ, and 76% drop YOY.
Next, let me discuss the sales of each game. Lineage M recorded sales of KRW 190.6 billion, a 6% drop QoQ. Lineage M has been continuing user-friendly services, and even though it has been 6 years since it was launched, its position as the top-ranking title in Korea is being maintained. Going forward, we will advance our content and service operations so that we can continue and expand Lineage M's life cycle.
Lineage W sales recorded KRW 90.1 billion, a 12% drop QoQ, and Lineage 2M sales recorded KRW 54.9 billion, an 11% drop QoQ. Lineage W and Lineage 2M was able to ease the sales decline compared to the previous quarter through content and events that activated user comeback in a fiercely competitive mobile MMORPG environment.
In Q4, we expect to end our sales decline trend and achieve more stable performance through our two-year and four-year anniversary updates respectively. KRW 9.2 billion, up 116% QOQ, with the results of the launch in Japan and Taiwan being reflected. The sales of the five PC online games together was KRW 93.2 billion, a 6% increase QOQ. Lineage, Aion, Blade & Soul, and Guild Wars 2 sales all went up QOQ. Lastly, royalty totaled KRW 35.3 billion, a 3% decline QOQ. Lineage M Taiwan royalty went up for two consecutive quarters, but Guild Wars 2 China royalty dropped.
다음은 비용에 대해서 말씀드리겠습니다. 3분기 영업비용은 전 분기와 유사하고 전년 동기 대비로는 12% 감소한 4,666억원입니다.
Next, let me discuss expenses. Q3 operating expenses posted KRW 406.6 billion, similar to the previous quarter and down by 12% YOY.
항목별로 살펴보면 인건비는 1,983억원으로 복리후생비 등이 줄어들면서 전 분기 대비 5% 감소했습니다. 전년 동기 대비로는 5% 증가한 수치입니다.
To break it down by line item, labor cost was KRW 198.3 billion, a 5% drop QOQ with the reduction in welfare expenses and others. It was a 5% increase YOY.
expansion of Blade & Soul 2, the release of the Guild Wars 2 expansion pack, etc. Due to marketing expense efficiency efforts, it decreased 29% year-over-year.
Marketing posted KRW 27.7 billion, which is an increase of 126% QOQ, due to factors including Blade & Soul 2 regional expansion and Guild Wars 2 expansion pack launching. However, with efforts made for more efficient marketing, the spend went down 29% YOY.
감가상각비는 전 분기 대비 5% 증가한 293억원입니다. 데이터센터 설비 증설에 따라 서버 등 상각비가 증가했습니다.
Depreciation posted KRW 29.3 billion, a 5% increase QOQ. With data center facility expansion, depreciation, including for servers, increased.
매출 변동비 및 기타 비용은 데이터센터 설비 교체에 따라 기타 소모품비 등이 증가했으나, 모바일 게임 매출 감소에 따라 유통 수수료가 감소하며 전 분기 대비 3% 감소한 1,514억원을 기록했습니다.
Variable cost and other expenses combined was KRW 151.4 billion, which is a 3% drop QOQ. With the data center facility replacement, other consumables expenses increased, but distribution fees declined as mobile sales decreased.
당사의 차기 대작 MMORPG, Throne and Liberty가 12월 7일 국내에 정식 출시됩니다.
Our next major title, MMORPG, Throne and Liberty, will be officially launched on December seventh in Korea.
at a scale and speed exceeding internal expectations, and at the upcoming G-STAR, our developers plan to directly showcase playing core content of TL such as large-scale guild raids.
The pre-registration, which started on November second, is being smoothly implemented with numbers and speed, which is going beyond internal expectations. At the upcoming G-STAR, developers will be directly playing TL's core content, including a large-scale guild raid.
지난 5월 실시한 국내 CBT 이후에 여러 고객들의 피드백을 반영하여 전투 및 성장 시스템을 대폭 개선하고 콘텐츠 볼륨을 키우는 등 많은 변화가 있었습니다. 애정 어린 조언과 제안을 해주신 모든 분들께 감사드리고, 12월 7일 TL이 성공적인 출발을 할 수 있도록 막바지 준비에 최선을 다하겠습니다.
After the domestic CBT in May, we reflected the feedback from many customers and there were many changes, including improving the battle and growth system and growing content volume. We express our gratitude to everyone who has given us affectionate advice and recommendations, and we will do our best to perfect TL so that it can successfully be launched on December seventh.
한편, TL 이후에 출시될 다양한 신작들도 순조롭게 개발이 진행되고 있습니다. 이 중 수집형 RPG, BSS와 남치형 대전 액션 배틀 크러쉬, 오픈월드 슈팅 게임인 LLL 삼종의 경우, 이번 지스타에서 고객들이 직접 플레이 하실 수 있도록 자리를 마련했습니다. 이번 지스타를 고객과의 소통의 장으로 삼아, 이들 신작들에 대해서도 고객들의 목소리를 경청하고, 앞으로의 개발 과정에 이를 적극 반영해 나가고자 합니다.
On the other hand, many new titles that will be launched after TL are smoothly being developed. In case of three games, collectible RPG BSS, an action brawler Battle Crush, and open world shooting LLL, we have a venue for customers to directly play at this year's G-STAR. We will take this year's G-STAR as an opportunity to communicate with our customers and closely listen to the voices of our users, and actively reflect this in our future development process.
글로벌 시장 공략과 포트폴리오 다각화라는 미래 성장 전략을 성공적으로 수행하기 위해서 지속적으로 유저분들과 접점을 늘려가고자 하니까 앞으로 당사에 따뜻한 관심과 응원 부탁드립니다.
In order to successfully execute our future growth strategy to target the global market and to diversify our portfolio, we are going to continuously increase touch points with our users. Going forward, we will be asking for your warm interest and support for our company.
네, 그럼 이것으로 2023년 3분기에 대한 실적 설명을 마치겠습니다. 감사합니다.
This wraps up my presentation on Q3 2023. Thank you very much!
지금부터 질의응답을 시작하겠습니다. 질문을 하실 분은 전화기 버튼의 별표와 일번을 누르시기 바랍니다. 질문을 취소하시려면 별표와 이번을 누르시면 됩니다.
Now, Q&A session will begin. Please press star one, then 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. The first question will be provided by Kim Jin-gu from Kiwoom Securities. Please go ahead with your question.
Thank you very much. I am Kim Jin-gu from Kiwoom Securities, and I have one question. Well, going forward, I think you mentioned that you were interested in the blockchain business, but I think you back, went back on that and you mentioned that you do not have interest. However, I believe that we are seeing the blockchain business, flower once again, and it seems that we are seeing the market actually showing many signs of visible recovery. However, I'm curious about your stance. Are you still not interested in the blockchain business? And, do you, do you still... And regarding the strategy, is it true that you still have no strategy for the blockchain business because you are not interested?
I have another question actually related to your assets and cash, because I know that you do hold a great amount of your cash related assets, and it seems that you haven't shown any visible investment so far. Can you tell us about why you haven't made any possible investments until now? And can you tell us about any future plans for investment going forward?
Yeah. Thank you very much for your question, Mr. Kim, and I would like to answer both of your questions. To answer your questions, well, I do believe that we haven't made any official announcement that we are going to suspend our blockchain business, so I don't recollect that being made in my memory. Secondly, I also believe that you mentioned that it seems that blockchain game business is now being revived, but I don't really get what kind of background you are referring to in making that comment. So maybe I can just explain based on my own understanding and our stance in this business going forward.
Well, I think I have mentioned this many times, and I believe that in Korea, a lot of people have the misunderstanding that the blockchain games actually are identical to P2E, play to earn. I believe that there are many game companies that actually believe that this is identical and have strategies to carry out in this manner. However, we believe that blockchain games are not identical to P2E in our case at all, and we believe that the form of this type of game should be actually converged in a different fashion. So we have the blockchain game, and we believe that going forward we should think about how the blockchain games could be converged and what timing it should be converged to.
Because I believe that we should have the understanding or we should have the assumption that we need to have economic balance within the game, and it needs to be stabilized. So that should be something that should actually be a condition in a blockchain game going forward in this case. However, I believe that regarding these two, so which is in-game balance and the balance in the blockchain game, well, we need to have both of them for the game to be well implemented and for the economic system in the game to be well run. However, I believe at this time, we don't have the external conditions that are met at this point.
Regarding the internal conditions as well, well, I believe that it is still not time yet, because if we have this coming in, well, it can lead to breaking down of the existing balance. It can be irresponsible, because we have to think about the existing users in the game, and we also need to think about the participants that will come into the game afterwards. So that is why, at this time, we are thinking long and hard about what our stance should be going forward. We've never said that we are not going to actually be delving into the area of blockchain games. So I believe that regarding the revival of the blockchain games that you mentioned, well, I believe that our company has a different perspective.
So let me add a few more words to actually end my answer. I believe that for the convergence of a blockchain game, well, we need to have the stability of the L1 currency that is linked, and it also needs to be universal. Then, I believe that we can talk about the balance in the game with in-game balance and external stability. However, I believe that this is not yet time, and we haven't reached that point yet. M&A. Well, let me answer your question about M&As. Well, it is true that we have been pushing for M&As continuously, and regarding the direction of our future M&As, we have been continuously reviewing possibilities in both game and non-game M&As.
However, regarding having some small-sized M&As going forward, it could help a few companies, and it could lead to their breakthrough. But we have been emphasizing from a long time ago that we believe that in our case, we need to have sizable, significant M&As for it to be meaningful to our strategy. So that is the direction of how we're reviewing our M&A possibilities. Well, we are currently reviewing some M&A as we speak, but I would like to tell you about a very strong principle that we adhere to at our company. It is true that we have seen in many M&A attempts in game companies in and out of Korea, that after the M&A, what happens is that the value of the company that was acquired actually doesn't really go up after the acquisition.
What happens is that because of the financing or other issues of the company that was acquired, this actually becomes a burden on the company's HQ that actually made the acquisition.
So that is why I want to tell you that we are very prudent in our approach for M&As. My philosophy actually adheres to the policy that having various M&As doesn't always lead to good results. We believe that even if there is a single M&A, well, it should be a great help to the company. So I believe that's why we really need to be prudent, and that is why we have been very prudent and vigilant in our reviews of possible M&As going forward. I can tell you that we have been making many efforts, and we truly hope that we can have very positive results going forward. According to the characteristics of M&A discussions, I cannot really give you more details at this time, but it is true that we have had many conversations regarding M&As.
However, we haven't had a very feasible result yet, going forward. So I can just tell you at this time that we have been very consistently making efforts for M&As going forward, and I truly hope that we can soon tell the market of some very positive results regarding M&As going forward.
The following question will be presented by Kim Junyoung from HSBC. Please go ahead with your question.
Thank you very much for the opportunity. I am Kim Junyoung from HSBC, and I have two questions. First is related to your plans for the launch date, because I know that you have mentioned that you have a Change Management Committee, and one of your goals is not to have delays of future launches. And you also mentioned that at G-STAR, you're going to showcase some of your titles as well. So can you tell us, is there any possibility that there will be some delays of your launches for new titles next year or going forward? And my next question is about the non-game M&A possibilities that you have mentioned in your answer. So I'm curious about the nature of the non-game M&As that you have been reviewing.
Do you mean that you're going to expand into other business areas, or are the non-game M&As referring to businesses that are not game developers, but businesses that can help you support game development? Thank you.
Yeah, thank you for the question, Kim Junyoung analyst. Thank you for your continued interest in us. I will answer the question. 변화경영위원회는 사실 지금 말씀하신 것처럼 저희가 그 과거의 어떤 그 시장에 저희가 좀 부족하게 보였던 부분, 특히 개발 출시 일정, 이런 모든 것에 대해서 새로운 시각으로 좀 디시플린을 가지고 미뤄지거나 이런 게 없도록 하는 거를 사실 최우선 과제 중에 하나로 지금 생각하고 진행을 하고 있습니다. 그래서 질문 주신 내용이 맞고요. 관련해서 지금 현재 저희가 예상하고 있는 출시 일정은 저희가 지금까지 커뮤니케이트 드린 내용에서 밀리거나 이런 게 없습니다. 그래서 계획대로 잘 진행이 되고 있고요. 뭐 이미 다 시장에 커뮤니케이션 됐습니다마는 뭐 TL도 일정 변화가 없고, 해외 일정도 커뮤니케이트된 대로 아마존과 같이 내년에 런치가 될 거고요. 그다음에 저희가 새로 신규 IP들 여러 가지 말씀드렸습니다마는 배틀크러시, 그다음에 BSS 이것도 저희가 커뮤니케이션한 대로 일정대로 진행되고 있다는 점을 말씀을 드립니다.
Well, thank you very much, Mr. Kim Junyoung. I know that you have been showing consistent interest in our company, so I'm truly grateful for your interest. And let me answer your question. It is true that we have set up the business change committee, a Change Management Committee, because it is true that we had some aspects that were not truly satisfying the market from the past. So that is why we have set up this committee so that we can have our utmost priority regarding our launch and development schedule so that it could be looked at from a new perspective, so we can have true discipline so that we will not be delaying any of the scheduled dates going forward.
So what you asked in your question was correct, and I can state that regarding our launch schedules, going forward. Well, as we had communicated, there will not be delays going forward. And actually, we have very smooth sailing in our implementation state. So, regarding TL, as well as we had communicated to the market, we do not foresee any changes in our schedule. And, for the overseas market, as was mentioned, we will be launching together with Amazon next year and for Battle Crush, BSS and some new IPs. It will also be going as scheduled.
M&A 관련해서 말씀 주셨는데 아까 그 우리 그 키움증권에서도 말씀을 주셨습니다마는 김진구 애널리스트도 말씀을 주셨고, 또 지금 김재연 애널리스트도 말씀을 주시는데, 사실 저도 생각은 같습니다. 지금 두 분 애널리스트가 말씀해 주신 것처럼 M&A가 필요한 시점이고, 또 저희가 그게 지금 현재 물론 신작들이 많이 나오고 합니다마는 그 어떤 과정에서 저희가 또 부스트를 주가나 여러 가지 실적을 부스트할 수 있는 좋은 수단이고요. 게임 쪽도 보고 있고, 난 게임 쪽도 보고 있다고 말씀을 드려서 거기서도 질문을 주신 것 같은데, 주력은 게임입니다. 게임이 게임회사이기 때문에 저희가 게임 관련된 당연히 스튜디오 포함해서 게임 관련된 저희가 또 아이피를 확장할 수 있고, 이런 영역에 당연히 주로 보고 있고요. 하지만 거기에 덧붙여서 난 게임에서도 매력적인 기회를 몇 가지를 포착하고 있습니다. 저희가 지금 그 이 순간에서 말씀드릴 수 있는 거는 그게 게임이든 난 게임이든 간에 저는 세 가지 원칙이 저희 회사에 중요하다고 봅니다.
첫째는 EPS accretion이라는 원칙은 절대로 훼손할 생각이 없습니다. 많은 경우에 M&A를 할 때 어떤 희망적인 그 비율을 가지고, 이 지금 철칙을 좀 훼손하는 게 있는데, 저는 개인적으로 EPS accretion은 양보할 수 없는 첫째 원칙이고요. 두 번째는 성장성입니다. 성장성에 대한 그 potential이 있는 사업, 게임도 마찬가지고 난 게임도 마찬가지입니다. 그게 없다면, 어떤 경우라도 아무리 가격이 싸거나 어떤 좋은 조건이라도 인수할 생각이 없고요. 세 번째는, 이것도 중요한 철칙인데요. user base와 그 지역적인 그 geographic한 그런 측면이 expansion이 될 수 있는 그 조건이 criteria를 meet할 수 있는지, 이거가 세 번째 중요한 것입니다. 그래서 또 세 가지 요건에 맞는 대상이 다행히도 있어서 지금 아까 말씀드린 대로 논의 중인 사항이 있고요. 하지만 뭐 지난번에도 그랬지만, M&A라는 거는 나중에 그 SPA sign하기 전까지는 어떻게 될지 모르는 거고요.
또 그런 점에서 서로 신중해야 되는 게 M&A이기 때문에, 이런 측면에서 좀 진지하게 접근하고 있다는 말씀을 아까 제가 김진구 애널리스트한테 답변드린 것에 덧붙여 다시 말씀을 드립니다.
So, regarding the M&A question, well, as was mentioned, in the question by Mr. Kim Jin-gu, Kiwoom Securities, and also Mr. Kim in the previous question, Mr. Kim Junyoung, I agree with what you just mentioned, because I do believe that it is time for us to have an M&A going forward. Because I believe that although we have plans to launch many new titles, but still M&As are a very good method for us to boost our company. So you also asked about a question about the nature of our M&As going forward, regarding whether they will be non-games or game related. But I can tell you that although I mentioned non-game possibilities, our focus lies in games.
So it will include different studios related to game development, and it will be mostly relevant to companies that actually can help us expand our IP. However, it is also true that we have seen several opportunities for us to have attractive opportunity for M&A for non-game companies as well. However, regarding whether they are game or non-game related companies, I have three main principles. First, is never to undermine the EPS accretion. And in many cases, I think that when people engage in M&As, they have a very hopeful view. However, I will never concede to the EPS accretion being undermined. So that is the first principle. And the second principle is about growth potential. Whether it's a game company or a non-game company, I believe that the M&A will have to have the potential to grow going forward.
So even if the price is very low, I believe that if it doesn't have growth potential, then it will not be a criteria for us. And thirdly, we will need to have the M&A that can help us expand our user base, in particular, in different geographies. So I believe that these three criterias or conditions need to be met, for us to have a successful M&A going forward. And as you probably are well aware, until we sign the SPA, well, for M&As, we really do not know what will happen, so we will need to be very prudent. And, as you have mentioned, Mr. Kim Jin-gu, well, thank you very much for your question, and we will be very seriously reviewing these possibilities with prudence.
The following question will be presented by Kim Dong Joon from CLSA. Please go ahead with your question.
Thank you very much for the opportunity. I apologize that I have multiple questions beforehand, and I am Kim Dong Joon from CLSA. My first question is about the Amazon global technical test that you had with Amazon, and I know that it was not disclosed to the public. So I'm very curious about the Western users' feedback after you implemented the feedback from the first test. So can you tell us about what the response was? And second question, to my knowledge, I know that you are going to launch first domestically and then launch overseas. So after you launch in Korea, are you going to have a global disclosed test open to the public? And when do you think you will launch after launch globally after you launch in Korea?
So do you have any idea of the term that will exist in between? My third question is about your marketing guidance and operating profit margin for 2024, because I know that your mobile sales has gone down, leading to a bit of a weaker fundamental on your side. So because I know that you're going to engage in more launches next year and have more marketing expenses, probably, I would like to know about your market guidance and operating profit margin for 2024. And my fourth and last question is about your LLM development. I know that you have been proactive in your response, and you have been mentioning that internalization and commercialization will lead to your company contribution. So can you give us some guidance for that? Thank you very much.
... 예, 적절하신 질문 맞고요. 근데 오늘 재밌는 게 오늘 다 처음에 키움의 김진구 님, 그다음에 HSBC 김준영 님, 지금 또 김동준 님 다 김씨 삼형제가 지원해 주셔가지고, 다른, 다른 분들도 질문 언제든지 주시기 바랍니다. 그 첫 번째로 주신 우리 김동준 주신 질문 답변 드리면요. 예, 당연히 그 글로벌 비공개 테스트에서 그 저희가 피드백을 받았습니다. 뭐 다 말씀드릴 수는 없는 사항이지만, 몇 가지만 말씀을 올리겠습니다. 첫 번째는 국내에서도 마찬가지였습니다마는 저희가 전투와 또 성장 콘텐츠를 개선을 한 거, 또 뭐 예를 들어서 뭐 지난번에 얘기가 많이 나왔습니다만, 자동 사냥 세는 어떤 그런 변화, 그런 거에 대한 긍정적인 피드백이 있었습니다.
Well, thank you very much, Mr. Kim Dong Joon of CLSA, for your very opportune questions. It's a bit of a coincidence that we're getting questions from three people that are all with the same Kim last name, Kim Jingu from Kiwoom Securities, Kim Junyoung from HSBC, and yourself as well. So even if you're not Kim, you can always freely ask questions. So, to seriously answer your question, yes, it is true that we have had feedback from our global undisclosed test, and I cannot give you a lot of the details, but there are some things that I can inform you of. Like we had in the case of domestically, it is true that we had very good responses.
We, because we had improvements in our combat content and our progression content, and we had removal of automatic hunting or other functions that were very warmly responded to.
지난번에 지난주죠. 진행한 저희 쇼케이스에서도 뭐 다시 한 번 전투 성장 강화 시스템, 또 커스터마이징 이런 거에 대한 글로벌 유저들의 아주 긍정적인 반응을 확인했고요. 저희 회사는 굉장히 그런 점에 대해서는 좀 포지티브한 사인으로 생각을 하고 있습니다.
Actually, we had a showcase last week, and we had very positive user responses for combat progression, forging, and customization, and others. So we believe that these are very positive signs.
그래서 우리 저 김석환 애널리스트 말씀하신 것처럼 우리가 서구권에 관련해서는 그 아마존하고 같이 추가적인 유저 테스트를 준비 중이고요.
As you had mentioned, Mr. Kim Dong Joon, in the western area or western world, we are actually working with Amazon for additional work going forward.
그래서, 그런 일정에 대한 타이밍은, 계약상 그 아마존이 직접 글로벌 유저들하고 소통을 하게 돼 있습니다. 그래서 그 점은 저희가, 말씀드리지 못하는 점은 양해를 구하고, 아마존이 계획에 따라서 직접 소통을 할 계획을 갖고 있습니다.
So, regarding the timing of our release going forward, well, according to our contract, it says, states that Amazon will be the entity that will communicate with global users. So I will be asking for your very kind understanding, because according to the conditions of our contract with Amazon, they will be the ones that will directly communicate with users.
아, 네. 두 번째 질문하신 모바일 게임 매출 하락에 대한 내용하고 또 내년 신작 출시 일정은 제가 아까 잠깐 말씀드렸습니다만, 이장우 주장님께서 네, 종합적으로 말씀해 주시면 감사하겠습니다.
네, 그 올해 분기에, 이번 분기, 아니, 삼 분기에 보셨던 것처럼 그 일단 리니지엠 같은 경우가 아마 6% 정도 QOQ 하락이 있었을 텐데요. 사실 리니지엠에 대한 어떤 일시적인 매출 하락은 염려를 안 하셔도 될 것 같습니다. 이제 사 분기에 지금 사 분기가 한 반이 아직 채 못 지나기는 했지만은, 리니지엠 같은 경우가 뭐 분기적으로 약간 fluctuation이 있을 수는 있지만은, 지금 현재 상태에서는 어떤 펀드멘탈스나 매출 기조에도 큰 이상이 없을 것 같고. 투석사님께서 한번 하시겠어요?
Well, regarding your second question regarding the decline of our mobile sales and the schedule for new title releases, maybe we can have Jason that can answer the questions for us going forward. Yes. Well, regarding your comments about the Lineage M for Q3 2023, it is true that on a QOQ basis, it went down 6%. But I believe that there is no need for concern here, because that was just a temporary sales decline. And although it has been a little bit shy of half passing of Q4, even though we have had some fluctuations in the quarter for Lineage M, I think that regarding our fundamentals and our sales stance, they are quite firm, so there is no need for concern.
다 궁금하신 거는 사실 리니지W의 어떤 하락 진정세가 언젠가라는 점인데요. 이제 사 분기에 그거를 확실하게 보여드릴 수 있다고 저희들은 판단을 해요. 이게 저희들이 여러 번 이걸 미스를 했었는데, 그래서 지난 분기에도 약간 조심스럽게 삼 분기에도 약간의 further, 그러니까 decline이 있을 수 있다고 말씀을 드렸는데, 지금 현 시점에서 사 분기는 저희들이 이전부터 얘기했던 그 딱 안정화 추세에 진입하는 걸로 저희들은 지금 판단을 하고 있습니다. 그거를 기반으로 보면, 이제 사 분기에 나오는 어떤 M을 포함하고 W도 포함한 이런 그 사 분기 베이스 실적이 어떻게 보면은 안정화 단계로 2024년도로 진입된다고 저희들은 판단을 하고 있어요. 물론 중간에 또 어떤 변화가 있을지는 모르겠지만, 아무튼 현재 시점에서는 그렇게 판단하는데 큰 무리는 없을 것 같습니다.
...And, I think actually you're, probably all of you are more interested in when is the Lineage W sales decline going to stabilize? And I think that we can show you a very, solid result from probably Q4, although we had some misses until now. And but in the last quarter, I think it was mentioned that there could be some further decline in Q3. However, we believe that from Q4, we're going to enter into the stabilization, phase. So, going forward, we believe that for Q4, for Lineage M and Lineage W, regarding our base, fundamentals for our results, this is going to mean the beginning of our stabilization phase entering into 2024. Although there could be some changes going forward, but that is our, judgment at this point in time.
in also marketing guidance to the
Regarding your question about marketing expense guidance, well, unfortunately, we are not as fortunate as the U.S. because they can give you very explicit guidance without a lot of limitations. But although that is not the case in Korea, I will do my best within the limited conditions of the domestic environment. Well, also to give you some insight on the current status, it would have been truly great or positive if we could have given you very exciting news about our sales. But we truly feel that we truly feel sorry to our shareholders that we haven't been able to convey that type of news to you.
But we can say for sure that from last year, we have acknowledged the situation, and we have been doing our best to control our marketing expenses and to have company-wide control. We have had very good results, and we believe for next year as well, we're going to have good results in controlling our expenses and costs. But regarding marketing, because we're going to launch new titles in 2024 and also launch TL at the end of this year, we are going to have some marketing expenses. So it will not be as easy as this year to have a very tight rein on our marketing expenses. So you can, I guess, logically assume that it might go up a bit.
However, as we had mentioned, we have set up the Change Management Committee so that we can have a great efficiency in our marketing expenses going forward. So, I can promise you that we are going to do our best for our existing and new titles as well. And, there is one comment that I would truly like to communicate with our shareholders and investors, which is to say that our marketing expenses will not be as greatly increased as we had in the past when we had launched big title, MMORPG titles. So I'm sure that if you follow our company, if you see our numbers, you probably will get an idea of what, what I have been mentioning about.
Regarding our operating profit margin, well, we will do our best so that it can actually be at a similar level or even have a slight improvement. But since I am a numbers person, I cannot be very aggressive on giving you a commitment. So I can just promise you that we will do our best to actually safeguard our operating margin. And our IR team will also be very open with our operating margin guidance and our efficiency plans going forward. So you will hear more from them, I believe that if you have further questions.
To answer your last question about internalization and the commercialization plans for LLM, well, I believe that this is an issue not just limited to our company, and it is actually relevant to the entire game industry as a whole. So we have been deliberating intensely within our company, but I think at G-STAR, there will be opportunities for us to actually show you in person, regarding some answers to your questions through game events or having sessions that will give some more information about AI. So maybe, you can hear more from us at that time.
Currently, there are no participants with questions. Please press star one, sorry, and one to give your question.
Thank you very much. We will conclude NCSOFT earnings call at this time. And regarding our results and earnings for the bottom line and top line as well, we know very well that showing the best numbers to the market will be very important, and we will be making company-wide efforts for us to have better results. And we will do our best so that we can achieve those results in the shortest amount of time possible. Thank you very much!