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NCsoft Q1 Financial Results

/Results Show Quarterly Consolidated Sales of KRW 88.1 Billion,
Operating Income of KRW 19.7 Billion and Net Profit of KRW 8.1 Billion;
Operating Income is up 63% Quarter over Quarter and Increases 16% Year
over Year/

SEOUL, South Korea-- NCsoft^® Corporation (KSE: 036570.KS) today
announced financial results for the quarter ended March 31, 2008. On a
consolidated basis, sales came to KRW (Korean Won) 88.1 billion (US
$84.3 million), operating income of KRW 19.7 billion (US $18.9 million),
and net profit of KRW 8.1 billion (US $7.7 million). Operating profit
showed significant improvements quarter over quarter (63%) and year over
year (16%).

Popularity of the /Lineage/^® series in Asia, sustained sales of /Guild
Wars/^® and /City of Heroes/^® in North America and Europe, and a
decrease in expenses such as advertising and other variable sales costs
were some of the primary reasons for the increase in operating income.
Of note in Q1 2008, /Lineage II/ reached record-high sales since its
2003 release.

In Q1 2008, NCsoft decided to take a one time write-off expense for the
advanced development costs associated with the Spacetime Studios
project, after determining the project did not fit into the company’s
core development plan. That left a net profit decrease of 22% quarter
over quarter and 43% year over year. However, excluding the write-off
expenses, net profit would be KRW 15.2 billion (US $14.5 million) an
increase of 48% quarter over quarter and 8% from the same quarter last

By region, sales came to KRW 49.8 billion (US $47.7 million) in South
Korea, KRW 10.9 billion (US $10.4 million) in North America, KRW 8.9
billion (US $8.5 million) in Europe, KRW 9.6 billion (US $9.2 million)
in Japan, KRW 2.8 billion (US $2.7 million) in Taiwan, and KRW 6 billion
(US $5.7 million) in royalty income. The percentage breakdown of sales
by region shows 57% in Korea, 12% in North America, 10% in Europe, 11%
in Japan, 3% in Taiwan and 7% from royalty income.

By game title, sales came to KRW 29 billion (US $27.8 million) from
/Lineage/, KRW 35.7 billion (US $34.1 million) from /Lineage II/, KRW
5.4 billion (US $5.2 million) from /City of Heroes/City of Villains/^®
and KRW 9.5 billion (US $9.1 million) from /Guild Wars./ The percentage
breakdown of sales by game title shows 35% from /Lineage/, 43% from
/Lineage II/ , 7% from /City of Heroes/City of Villains/ and 12% from
/Guild Wars./

NCsoft CFO Jaeho Lee said, “As proven once again in the Q1 financial
results, we strongly believe our key franchise products, such as
/Lineage /and /Guild Wars/, will meet our sales target with a strong
customer base and continued content updates going forward.” And he
added, “We plan to ensure the smooth launch of many new products in the
next two to three years, which will strengthen our position as a global
leader in online games.”

This summer NCsoft plans to launch its third closed beta test of /Aion^®
/ before formally launching the much anticipated product later in the
year. Casual online games such as /Point Blank/^™ /, Punch Monster/^™ /,
Dragonica/^™ /, /and/ Love Beat/^™ are also scheduled for an official
service launch later in the year.

2008 Q1 Consolidated Earnings Summary (unit: KRW in millions)

Q1, 2008

Q4, 2007

Q1, 2007









Operating Income






Pre-tax Profit






Net Profit






NCsoft, the interlocking NC logo, /Lineage/, /Guild Wars/, /City of
Heroes/, /City of Villains/, /Aion/, /Point Blank/, /Punch Monster/,
/Dragonica/, /Love Beat/, PlayNC, PlayNC.com and all associated logos
and designs are trademarks or registered trademarks of NCsoft
Corporation. All other trademarks are the property of their respective

*Note: 1$US = 1,045 KRW (Korean Won)*

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