Greetings, I'm Dong Hwan Kim, Head of Finance Planning at Netmarble. I thank the investors and analysts for taking the time off of your busy schedule to attend Netmarble's 2024 second quarter earnings conference call. On the line with us are CEOs Young-sig Kwon and Byung-gyu Kim and CFO Ki-wook Do. We will address any questions that may arise during the call after the main presentation. Please note that the contents of the earnings report have yet to undergo an independent auditor's review and could be subject to changes to the audit results. With this, CFO Ki-wook Do will present the Q2 earnings.
Good afternoon. Good afternoon, my name is Ki-wook Do, and I will present overall 2024 second quarter earnings. Please refer to page two.
Q2 revenue was KRW 782.1 billion, up 33.6% quarter-over-quarter, and up 29.6% year-over-year. EBITDA was KRW 151.1 billion, up 253.9% quarter-over-quarter, and up 1,299.1% year-over-year. EBITDA margin rate marked 19.3%. Q2 revenue and EBITDA marks largest in its scale since IPO, driven by new title launches and cost restructuring. Next page, we are seeing operating income and net income. Q2 operating income recorded KRW 112.2 billion, and net income KRW 162.3 billion. Controlling shareholders' net profit marked KRW 169.5 billion. Net income was significantly improved, driven primarily due to liquidation of holding assets, resulting in an increase in non-operating income.
Next page, we are looking at game portfolios. At Q2 end, Solo Leveling: Arise marked 20% of the total revenue, followed by Marvel Contest of Champions at 9%, Jackpot World at 7%, Lotsa Slots by 6%, Cash Frenzy 6%, and Arthdal Chronicles: Three Factions 5%. The three new launches in Q2 have contributed largely to the quarterly revenue, successfully marking their position as key titles in Netmarble. Next is revenue ratio by region and genre. With the launch of Solo Leveling: Arise in Q2, domestic revenue increased by 7 percentage points QoQ, and in genre-wise, RPG revenue portion increased by 12 percentage points QoQ. Q2 regional breakdown of revenue contribution was 40% in North America, 24% in Korea, 13% in Europe, 10% in Southeast Asia, 6% in Japan, and other regions 7%.
Revenue contribution breakdown by genre is RPG 45%, casual games 34%, MMORPG 15%, and others 6%. Next is our major cost structure. Q2 operating expenses was KRW 670.9 billion, up 15.3% quarter-over-quarter, and up 4.7% year-over-year. Royalty cost was at KRW 263 billion, which is 33.6% of Q2 revenue, down 5.2 percentage point quarter-over-quarter, largely due to increase in PC revenue with our own launcher. Personnel expense was KRW 182.7 billion, slight increase QOQ due to base salary increase. Marketing expense was KRW 143.7 billion, mainly increased due to new launches in Q2. Next is on cost structure improvements.
Netmarble has been working relentlessly to manage costs since 2022, and the outcome of such effort is coming to materialization. Royalty expense, taking up the largest portion of operating costs of Netmarble and remaining at a level of 39% of revenue until last year, was reduced to 35.9% this half of the year due to expansion of PC platform. In particular, revenues from PC platform of Arthur Chronicles: Three Factions and Raven II, launched in Q2, recorded over 50% of their total revenues, contributing to the improvement of royalty cost structure.
As for personnel expenses, we are seeing a continuous decrease in costs due to cost reduction efforts and workforce re-streamlining, recording a quarterly average of KRW 181.1 billion this first half of the year, compared to a quarterly average of KRW 194.9 billion in year 2022. Finally, marketing costs remained at a level of 19% of revenues until year 2023. This half of the year, we have reduced this cost to 17.9% of total revenues, despite the three new launches, through geo-targeted marketing and improvement of ROAS marketing competence. Netmarble will not rest here, but continue to work relentlessly to deliver solid earnings in the future through cost management. Next, I would like to announce our new game pipeline.
In the remaining half of the year, Netmarble plans to successfully launch four new titles, including Seven Deadly Sins: Idle Adventure, King Arthur: Legends Rise, RF Online Next, and Demis Reborn. In the past two years, we have placed our primary focus on overcoming management crisis through two pillars of strategic focus: restructuring and prioritization. As a result, we have accomplished significant achievement this quarter, recording our highest ever quarterly revenue. We promise to try our best to strengthen Netmarble's unique competitiveness and strong fundamentals in the remaining half of the year. We ask for your continued support in Netmarble. This concludes our earnings presentation. Should you have any questions, we will be happy to address them now. Thank you!
Now Q&A session will begin. Please press 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 Junhyun Kim from HSBC Securities. Please go ahead with your question.
[Foreign language]
Thank you for the opportunity to speak. Congratulations on your remarkable results this quarter. I have two questions. The first one is, we understand that Netmarble has made tremendous results using the Solo Leveling Arise IP. We are curious to, curious about, Netmarble's future plans on using, using IPs from other sources. Will Netmarble be using anime based IPs as well? What are your what are your strategies for selecting new IPs? My second question is, regarding the Solo Leveling Arise. I am assuming that for the second quarter, second half, results of Solo Leveling, there will, there will be massive updates, and we are curious to know the timeline of these updates.
If you can reveal some of the information on the new launches in the second half of the quarter, that would be great.
[Foreign language]
Thank you for your question. This is CEO Kwon, addressing your question. The first part of the question. We've actually shared our IP utilization strategy many times, but we want to, I'd like to emphasize one more time that we want to utilize our own IP, our self-owned IP, as well as to use the leverage of external IPs when necessary. Netmarble's IP strategy is to use our games to use the IP to gamify at its best, and when we find it necessary, and when we find the best IP possible, we will not hesitate to use external IPs as well.
[Foreign language]
Regarding Solo Leveling: Arise, we do have main story updates, major story updates in September and December. We also have a guild system update in August, as well as major content updates in October and November.
[Foreign language]
Regarding the new launch update, other than the ones that we have revealed during this conference call, we do have new projects, 5 or 6 projects coming up in 2025, and we will be able to reveal this information when we are ready.
[Foreign language]
Next question, please.
[Foreign language] The following question will be presented by Seok-oh Kang from Shinhan Investment & Securities. Please go ahead with your question.
[Foreign language]
... Congratulations on your remarkable results this quarter. I have three questions. The first question is, among the four titles, the four new launches in the half quarter, what is the projects that we can expect the largest scale of revenue on? And how much marketing spend do we expect to spend on this title? My second question is, we understand that Netmarble is still there, is also still spending very much on its interest, although I understand that we have sold the HYBE shares. What are Netmarble's plans in repaying these borrowings? My third question is, Seven Deadly Sins Origin has been the most expected title during among the titles that have been announced at the G-Star.
When will this project be launched, and what are the marketing plans for this project?
As you know, since the gaming industry, this is CEO Kwon addressing your first question. As you know, the game industry is based, highly based on trend, so it's really, it's a very difficult question for us to answer, to tell you which game is the most highly expected in terms of revenue. I have to say that the title that will be launched earlier will be the title that will be contributing the most to the revenues. In terms of marketing costs, we plan on. We have a planned budget for marketing at 20% of revenue, and this is the amount of marketing spend that we expect to spend on this title as well.
This is CFO Do addressing your second part of the question on repayment borrowing plans. As you probably know, Netmarble places repayment of our short-term borrowings as one of our primary strategies, and we have to be very, very flexible, and since it's very difficult to predict the market situation, we have to understand the entire environment and be flexible in terms of scheduling for the repayment of borrowing.
This is CEO Kwon again, addressing your third question on Seven Deadly Sins Origin. We plan on launching this title at Q2 of 2025. And in terms of marketing, Netmarble will be fully in charge of PC and mobile marketing, whereas for PlayStation marketing, we will be doing marketing with Sony. And I hope this answers your question.
Currently, there are no participants with questions. Please press star one, star and one to give your question.
This concludes 2024 Q2 Netmarble earnings conference call. Thank you for your attendance, and should you have any additional questions, please do not hesitate to contact the Netmarble IR team.