Kakao Games is set to restructure its business under a new management system in the third quarter, following a disappointing second quarter. The company plans to establish a foundation for sustainable growth through a focused strategy that includes the upcoming release of the new game 'World of Goblins' and ongoing publishing contracts.
On August 5, Kakao Games announced that it recorded approximately 75 billion won (about $57 million) in revenue and an operating loss of about 23 billion won (approximately $17 million) for the second quarter of this year, based on Korean International Financial Reporting Standards (K-IFRS).
Revenue decreased by about 35% compared to the same period last year and by about 10% from the previous quarter. Although the operating loss continued to persist compared to both the previous year and the previous quarter, the deficit was reduced by about 10% from the first quarter.
By business segment, revenue from PC online games increased by about 51% year-on-year but decreased by about 20% from the previous quarter, totaling approximately 22.3 billion won. Meanwhile, mobile game revenue fell by about 48% year-on-year and about 4% from the previous quarter, amounting to approximately 52.7 billion won.
The company attributed the decline to the stabilization of revenue from existing live titles and gaps in new releases.
Kakao Games also plans to conduct a comprehensive business restructuring under its new management system in the third quarter to strengthen its foundation for sustainable growth. In March, the company underwent a shareholder structure reorganization, resulting in Line Yahoo becoming the largest shareholder. Under this new management, the company will closely examine game projects while focusing on the launch of key intellectual properties (IPs).
The pre-registration for the K-fantasy mobile MMORPG 'World of Goblins' will begin in August, with the official release scheduled for October. Additionally, the strategic adventure RPG 'Dungeon Arise' and the open-world zombie survival simulator 'God Save Birmingham' are planned for release later this year and early next year, respectively. The anticipated MMORPG 'Odin Q: Valkyrie's Call' is also being prepared for a release in early next year.
Kakao Games is actively pursuing additional publishing contracts. The company has secured global rights for the PC MMORPG 'ArcheAge S: The Gulf of Freedom' and the pixel-art collection action RPG 'Guardian Maiden.' Furthermore, it plans to expand its game portfolio by utilizing popular comic and webtoon IPs in collaboration with The Grim Entertainment.
In a move to enhance shareholder value, Kakao Games has initiated a share buyback of 500,000 shares and is implementing a long-term shareholder return strategy that includes the introduction of a Restricted Stock Unit (RSU) program for employees, transferring retained earnings to capital reserves for shareholder returns, and management's share purchases.
CEO Lee Si-woo stated, "We will focus on presenting high-quality games with a strong potential for success in the global market and solidifying our foundation for sustainable growth. We will transparently communicate with users and shareholders as we sequentially unveil the newly restructured titles that enhance our market competitiveness."
* This article has been translated by AI.
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