The global video game industry is increasingly rewarding publishers that can sustain blockbuster franchises while controlling development costs, a divide expected to shape South Korea’s third-quarter earnings season. For U.S. investors evaluating Asian gaming stocks and competition in the global market, forecasts released October 27 point to sharply different trajectories: Krafton is poised for strong revenue growth, NCSoft is expected to return to operating profitability, and Netmarble is set to expand sales, while Kakao Games faces deeper losses and Nexon confronts mounting margin pressure.
Krafton, South Korea’s largest publicly traded gaming company by market capitalization, is expected to generate about $790 million in third-quarter revenue, up 29.4% from a year earlier, according to consensus estimates compiled by Yonhap Infomax.
The company continues to benefit from its PUBG: Battlegrounds franchise, with additional contributions expected from newer titles, including Subnautica 2, which is available through early access. But expanding its game-development pipeline is expected to weigh on profitability. Operating profit is forecast to fall 19.7% to about $196 million, while net income is projected to decline 43.7% to approximately $146 million.
NCSoft is forecast to stage a stronger operating recovery, with revenue nearly doubling as its Aion 2 and Lineage Remastered franchises help revive performance. Third-quarter revenue is expected to rise 95.5% to about $493 million, while operating profit is projected at roughly $72 million, reversing a loss a year earlier.
The company’s expansion into mobile casual games following recent acquisitions is also expected to contribute to revenue. Net income, however, is forecast to fall 76.3% to approximately $58 million, highlighting the difference between an operating turnaround and broader bottom-line growth.
Netmarble is expected to post more moderate gains as revenue from games released in the first half of the year builds. Third-quarter sales are projected to increase 5.1% to about $512 million, supported by titles including The Seven Deadly Sins: Origin, Mongil: Star Dive and Sol: Enchant.
Operating profit is forecast to decline 8.5% to approximately $58 million, even as net income rises 45.3% to around $41 million.
Kakao Games faces a more challenging outlook after struggling to deliver a major hit through the third quarter. Revenue is expected to fall 38.8% to about $55 million, while the operating loss is projected to widen to roughly $18 million. The company is also forecast to swing to a net loss of approximately $24 million.
Kakao Games is counting on Dokkaebi-ui Segye, released in early October, to help revive performance in the fourth quarter. The extent to which the title can attract and retain players will be a key factor in determining whether the company’s downturn begins to ease.
Nexon, which is listed in Japan, expects third-quarter revenue of approximately $800 million to $883 million, representing year-over-year growth of 2% to 11%, according to its own forecast. Higher costs tied to revenue, however, are expected to erode profitability.
Operating profit is projected at roughly $150 million to $214 million, down 14% to 40% from a year earlier. Net income is expected to decline 33% to 52%, to a range of approximately $121 million to $170 million.
The divergent forecasts underscore the gaming industry’s growing challenge: maintaining successful franchises and turning new releases into lasting revenue without allowing development and operating costs to overwhelm earnings. For investors, revenue growth alone may offer an incomplete picture of a publisher’s strength. Player retention, the commercial staying power of new titles and the ability to translate sales into operating profit are likely to be more telling indicators of performance.
