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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] Korea’s NICE Investors Service announced last Friday that it has downgraded NCSoft’s long-term credit rating from AA (Negative) to AA– (Stable), citing concerns over weakening business fundamentals and limited near-term cash flow improvement.
According to NICE, slowing growth in the domestic gaming market, declining revenue from mobile games based on the Lineage IP, delays in major new releases, and underperformance of existing titles are expected to hinder revenue recovery this year.
The agency also noted that deteriorated operating cash flows and non-recurring capital expenditures (CAPEX) are limiting the company's ability to improve cash flow in the short to medium term.
“The gaming industry's overall environment has worsened,” NICE stated. “Consistent release of new titles will be a key driver of performance and user engagement. Key monitoring points include the success of internally developed and published games, strategic M&As, diversification across genres, regions, and platforms, as well as the company’s ability to maintain its current level of financial stability.”
NCSoft posted a consolidated operating loss of KRW 109.2 billion last year, marking its first loss since 1998. Revenue fell 11.3% year-on-year to KRW 1.578 trillion, and net profit dropped 56% to KRW 94.1 billion.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
