Photics.com

Essentially, NCsoft is in economizing mode. By cracking down on illegal Lineage servers, and releasing new content for the game, quarterly sales were up 35%. With Tabula Rasa not much to brag about, NCsoft was focusing on the future and their optimizations in management.

Lee states, “Unlike Tabala Rasa, Aion should be much more familiar and will be very much accepted for the existing online gamers. When we try to develop this Aion game, we have benchmarked all the success factors from Lineage, Lineage II and also World of Warcraft, and the development team I believe has been doing a very good job of integrating all those key success factors into our game development; as well as adding a new concept in the game. Based on those factors, we believe we have more confidence in the successful launch of Aion.

With NCsoft stock trading near lows, will investors trust in the future of the company? This is especially concerning, when NCsoft itself admits an uncertain future. Lee stated, “Most of our cash balance is reserved to support our next move, to identify and secure the new opportunities we can take on. We have been trying hard to figure out the best opportunity for our future growth, but so far we have not determined yet which way we are going to focus.”

Yet, the blow of uncertainty was cushioned with the promise of cash. Lee also stated, “We are now ready to take care of our shareholders more aggressively than before. We reserve most of our cash balance for our future growth. Now we will activity look for new policies to take care of our shareholders, such as paying dividends and also launching another series of share buy-back.”

The biggest things going for NCsoft is Lineage and Guild Wars. Both franchises are popular but they are aging. Additional expansion with existing titles is difficult on the company. NCsoft is finding difficulty with launching Guild Wars into the Chinese Market. Lee comments, “We are having some problem in our Guild Wars launch in China. We are pushing very hard when The9 is going to publish Guild Wars in Chinese market and we don’t still get the final answer yet. So at this point it is basically uncertain whether The9 will publish Guild Wars in the Chinese market.”

NCsoft is struggling to find the next big thing. With the Guild Wars 2 beta test not until the second half of 2008, the NCsoft bottom line is hurt by the dormant franchise. This especially problematic within the European market, which reported a 12% drop in quarterly game sales.

Lee said, “When we launch a new chapter of Guild Wars, we have a very high growth of revenue in Europe. When we don’t have that new launch, then see we a sharp decline in the European revenue numbers. We expect this high dependence on Guild Wars franchise will be resolved when we launch Aion late this year in European market.”