The Karma of one company

NCSoft is one of the largest game companies in Korea. Until recently, the company developed numerous games and was generating sales of trillions of won per year. In addition, the stock price also broke the 1 million won mark in February 2021. However, the stock prices of these giant companies are now continuing to plummet. Let’s find out why this is happening.

Although the company’s stock price has been dropping little by little from the first half of 2021, the market cap of 4 trillion won evaporated in August of this year, when NCSoft released a game: Blade and Soul 2. This game was almost identical to the “Lineage” series they had previously released, and it was difficult to find any unique features. In addition, the company aimed to operate a game that excessively abused the “Pay to Win” charging policy, so gamers, the company’s customers, turned their backs on this game. Further, the stock price plunged as company shareholders refrained from investing and sold their stock after seeing too many gamers exiting the consumer base.

Eventually, the situation did not subside, and the stock price of NCSoft, which was 837,000 won on August 25, fell to 584,000 won as of September 23. To make matters worse, many investment companies stopped recommending investments in NCSoft, and Korea Investment & Securities has not even offered a target price. In fact, NCSoft has now reached the point where it will not be able to get out of this situation without major changes such as policy reforms within the company.

In fact, despite numerous warnings, NCSoft ignored these risks to maximize their profits. For example, on May 20, 2021, NCSoft released a mobile game called “TricksterM”. Although this game was a different genre from the “Lineage” game series, it borrowed the system of Lineage as it was, and many gamers were angry due to excessive charging induction business marketing. In the end, the game failed miserably, and NC Soft’s image was branded as a vicious company that deceived consumers. Despite this situation, NCSoft ignored public opinions and did not change their company’s operating policy, and ultimately followed the same situation three months later. The only difference from the case three months ago is that this case has even lost credibility to investors.

NCSoft’s share price decline is still ongoing. In some cases, the stock price soars for a short time due to a fight between major shareholders and individual investors, but overall, the stock price continues to plummet. If NCSoft does not quickly acknowledge the work of the basims and improve the company’s image through major reforms and consumer-friendly policies, not only potential consumers but also those who currently consume its games and even investors will leave forever from it.

By: Junhong Park