On the 9th (9th), Pearl Abyss held a conference call from 8:00 am to announce the third quarter of 2022. The conference call consisted of Pearl Abyss' 3Q results, 4Q highlights, and major Q & A.
Day: November 9, 2022 (Wed) 08: 00 ~ 09: 00
True Seek: CEO Huh Jin-young, CBO Kim Krugman, CHO Seok-woo CFO
Announcement: 3Q total performance and questions and answers
■ Pearl Abyss Operating profit of W12bn to turn to the black
CHO Seok-woo, CFO, said, We have continued to achieve good results in the third quarter thanks to the stable live service of the Black Desert and Eve. It has led to positive achievements in improving the indicators.
In addition, Eve said it has been well received by many users through the update of the agent & Arc content, the opening of the new Chinese server to expand the service market, and the release of the Spanish version.
Pearl Abyss' 3Q operating revenue increased 3.5% Qom to W97.3bn. Operating profit turned to the black to W12bn, and net profit fell 33.4% Qom to W21.3bn.
In the third quarter, the operating income from the Black Desert IP was W76.6bn, up 3.1% from the previous quarter. Eve IP operating revenue increased 10.1% Qom to W19.4bn. Regional operating revenue was 56% in North America, 26 percent of Asia in Korea. The share of operating income by platform was 77% in PC, 16% for mobile, and 7% in console.
Operating costs in the third quarter fell 13.2% Qom to W85.3bn. Labor costs fell 19.2% Qom to W40.9bn. This is due to the exclusion of about 8 billion won in one-time incentives that occurred in the last quarter. For reference, the number of people in the end of the third quarter is 1,456. The standard development group is 907, which is 62% compared to the total. The payment fee decreased by 22% Qom to W16.6bn, while advertising costs decreased by 13.2% to W9.4bn.
Lastly, major highlights were introduced in the fourth quarter. The Black Desert also shows a variety of new content in the fourth quarter. Recently, the Black Desert has updated Abyss One: Magnus, and this update has made it easier for new users to move between regions where new users are having difficulty.
CHO Seok-woo, CFO, said, The black desert is MMORPG. It was, he said.
Eve plans to update in the fourth quarter. Prism is an expansion pack that has been prepared over the past year, including new content such as war reform. In December, the Eve Vegas user meeting will be held at Las Vegas.
New IP progress was also mentioned. CHO Seok-woo, CFO, said, The Red Desert is devoted to development to showcase the best quality, and we are thinking about the best place and way of conveying news about the red desert. I will do it.
In addition, CCP Games is preparing a web-based blockchain business. In order not to harm existing users' experience, the application of blockchain technology will be applied to new games that are not yet presented, not existing games, and will be guided according to the progress.
■ Q & A
Q. I am wondering why the number of developers in the development group decreased compared to the previous quarter and whether the operating profit could be maintained at a certain level.
CHO Seok-woo CFO = The end of the internship program in the first half of the year was reduced. We plan a new linked internship during winter, but plans to take over the overall manpower.
Operating profit is showing a gradual increase in profits as Black Desert and Eve continues to make stable profits. In addition, despite the development of new works, we will try to maintain good profits through efficient execution of the ongoing services.
Q. Share the red desert in-game video disclosure plan and goblin development progress.
Huh, Jin-young CEO = The Red Desert is developing a global console user with a quality that will satisfy the eye level. Since last summer, BTB marketing has been active in the third quarter, discussing how to collaborate with partners. Pearl Abyss believes that collaboration with experienced partners will be a great help in success. I think the red desert has reached enough to be released. In fact, I also considered a short release of video at the end of the year-end global event. However, it is difficult to disclose this year because we are making business judgments with various options.
The goblin is developing with the red desert to the internal development roadmap. However, this year, the core development team is focusing on the development of red deserts, so we will make additional disclosure depending on the situation.
Q. I'm curious about the partner's feedback on the red desert and the aim of launching the second half of next year.
Huh, Jin-young = Since last summer, he has been inviting global partners every week to conduct B2B marketing. This is to verify that the red desert is the same game as the AAA title in the global market. Despite these concerns, the actual partner has been well-received and was surprised by the quality of the Black Space engine.
Unlike internal confidence, it is understood that uncertainty is very high in the market. I feel that time is not long until the game is completed. In fact, it is expected to complete the development in the second half of next year. However, the release date will be decided through the market situation and partner collaboration, so we will disclose it again as soon as it is confirmed later.
Q. How many people are currently in the red desert among the developed jobs? Please share how the new development team and the number of people are being assigned.
Huh, Jin-young, CEO = Pearl Abyss does not operate a completely separate studio development team. Therefore, there is a workforce in charge of each project, but it is a concept of sharing core development personnel. For this reason, the goblin is being developed simultaneously with the red desert, but the core development team is participating in the red desert support more than 50% of the red desert.
Q. The red desert launch continues to be delayed. In this regard, the reason for the slow development of the development is that the user's eye level is increasing as time goes by. How do you see the competition in the market?
Huh, Jin-young CEO = There is a part of knowing that it takes a lot of time to finish to get to know the console market and improve the completeness. More important than that, technology development is faster than when you first started a project. In particular, I hope you understand that you are developing a lot of these technologies and the desire to show in the game because you are developing an engine with engine technology and cinematic companies.
Q. There was a rumor that the goblin project team was once disappeared, but I wonder if there was no manpower.
HEO Jin-young CEO = A large-scale project, so the development period is long, so there is a person with a manpower. I think the goblin has achieved some game direction and basic completion. That's why there's a part of the workforce, but it doesn't judge it as a problem that has a big impact on development.
Q. The release date is expected to be delayed if the red desert development is completed in the second half of next year. If so, the goblin is expected to be completed after that, but will the launch schedule be delayed?
Her Jin-young CEO = The launch schedule of goblin has been seen since the Red Desert. It takes a little longer to release the red desert, and the goblin is actually more likely to be after the launch next year. However, since some techniques applied to the red desert are also applied to the goblins, the release of the goblin will be prepared to be done quickly after the Red Desert.
Q. Is there a possibility that the black clover launch schedule and the service are successful when the service is successful.
Like CHO Seok-woo, CFO = Big Game Studio, all the developers we invest in are operated as independent studios. Therefore, new issues are guided through each company. Black Clover is scheduled to be released in the first half of next year, as it was released on November 7. Black Clover is recognized as equity revenue and does not have a call option through a special contract.
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