Kakao Games headquarters. [Kakao Games]
Kakao Games headquarters. [Kakao Games]

Kakao Games posted an operating loss of 23 billion won ($16.1 million) in the second quarter of this year, hurt by a lack of new title releases and other factors. The deficit, however, narrowed about 10 percent from the previous quarter.

Under its new management structure, the company plans to restructure its operations in the third quarter to build a foundation for sustained growth.

Kakao Games said Wednesday its consolidated second-quarter sales came in at about 75 billion won, with an operating loss of about 23 billion won.

Sales fell about 35 percent year-on-year and about 10 percent quarter-on-quarter. The operating loss continued from both the same period last year and the previous quarter, though the deficit shrank about 10 percent from the prior quarter.

By segment, PC online game sales rose about 51 percent year-on-year but fell about 20 percent quarter-on-quarter, coming in at about 22.3 billion won.

Mobile game sales totaled about 52.7 billion won, down about 48 percent year-on-year and about 4 percent quarter-on-quarter.

The company said second-quarter results were affected by declining revenue from existing live titles and the absence of new releases.

Kakao Games co-CEOs Lee Si-woo (right) and Kim Tae-hwan. [Kakao Games]
Kakao Games co-CEOs Lee Si-woo (right) and Kim Tae-hwan. [Kakao Games]

In the third quarter, the company will focus on launching key intellectual property titles.

It plans to open pre-registration this month for "Dokkaebi's World," a Korean-fantasy mobile MMORPG, and is accelerating final development to release the game to users in October.

The company also plans to release the strategic adventure RPG "Dungeon Arise" and the open-world zombie survival simulator "God Save Birmingham" within this year and in early next year, respectively. It is also pushing to launch the highly anticipated MMORPG "Odin Q: Valkyries Call" in early next year.

"We will focus on delivering high-quality games with strong potential in the global market and build a solid foundation for sustained growth," Kakao Games CEO Lee Si-woo said. "We will sequentially unveil new titles restructured around market competitiveness and maintain transparent communication with users and shareholders."

Meanwhile, LY Corporation became Kakao Games' largest shareholder following a governance restructuring in March. The company has since launched a co-CEO structure with Kim Tae-hwan and Lee Si-woo at the helm and is moving to improve its fundamentals.

Kakao Games has been working to enhance shareholder value through a series of medium- to long-term shareholder return measures, starting with the cancellation of 500,000 treasury shares, followed by the introduction of a stock-based performance compensation system for employees, the transfer of capital reserves to retained earnings to fund shareholder returns, and share buybacks by management.


sjpark@heraldcorp.com