Kakao Games Corp., the gaming arm of South Korea’s Kakao Corp., reported a significant 89.4% drop in operating profit for the second quarter, down to 2.8 billion won ($2.03 million), falling short of market expectations of 8.6 billion won. The decline is attributed to the absence of new hit games, which has affected subscriber retention and mobile game revenues.
The company’s revenue fell by 13.1% year-on-year to 235.6 billion won, resulting in a net loss of 11.7 billion won for the quarter. Mobile game revenue decreased by 21.8% from the previous year to 134.5 billion won, also marking a 16.6% decline from the prior quarter.
Conversely, the PC gaming segment, driven by the ongoing popularity of “Battlegrounds,” co-published with Krafton Inc., experienced a 37.3% increase in revenue to 16.3 billion won. This growth provided some cushion against the broader downturn in earnings.
In response to these challenges, Kakao Games is enhancing its game portfolio, with a strategic emphasis on console titles. The company is set to introduce three new console games—”Lost Eidolons: Veil of the Witch,” “Section 13,” and “God Save Birmingham”—with releases planned from later this year into 2025.
Kakao Games is also preparing to launch several AAA titles, including “Chrono Odyssey,” “ArcheAge 2,” and “Swordmaster’s Youngest Son,” between next year and 2026, aiming to regain momentum and drive future growth.
