Kakao Games posts W26.3b loss in Q3, extending losing streak to 8 quarters

Kakao Games posted an operating loss of 26.3 billion won ($19.6 million) in the third quarter of this year, extending its losing streak to eight consecutive quarters. The deficit widened both year-on-year and quarter-on-quarter, with analysts pointing to a gap in new game releases and declining revenue from existing titles as the main drags on performance.

The company said Wednesday that its consolidated third-quarter sales came in at 69.1 billion won, with an operating loss of 26.3 billion won.

Sales fell 46 percent year-on-year and 8 percent quarter-on-quarter. The operating loss swelled from 5.4 billion won in the third quarter of last year to 26.3 billion won this quarter, also widening from the 23 billion won loss recorded in the previous quarter.

Kakao Games attributed the weak results to a lack of new game launches and a gradual decline in revenue from its existing lineup.

By segment, mobile game sales totaled 50.6 billion won, down 40 percent year-on-year and 4 percent quarter-on-quarter. PC online game sales came to 18.5 billion won, a drop of 57 percent year-on-year and 17 percent quarter-on-quarter.

The company said it plans to use the fourth-quarter performance of its new title "Dokkaebi's World" as a springboard for a turnaround. Released in October, the game reached No. 1 on the Google Play revenue chart within five days of launch and has since remained near the top. Kakao Games said it is also preparing a global service rollout on the back of the title's domestic success.

The company is also accelerating its release schedule toward year-end. It will officially launch the PC online action game "Path of Exile 2" on Dec. 12, followed by the massively multiplayer online role-playing game "Odin Q: Valkyrie Calls" in January next year.

"Odin Q," currently in development at Lionheart Studio, is being prepared for simultaneous release in South Korea, Taiwan and Japan. Kakao Games also plans to expand its game lineup across multiple genres with new titles including "God Save Birmingham," "ArcheAge S: Strait of Freedom" and "Guardian Maiden."

The company is pursuing business restructuring alongside new investment. Over the past three months, Kakao Games acquired global casual game developer Meetoo On and made a strategic investment in AI backend technology firm BackendX. It said it will continue to identify promising developers and technology companies to build a foundation for mid- to long-term growth.

"We are once again proving our core competitiveness, built on a solid portfolio, by targeting diverse user groups with clear differentiation for each IP," Chief Executive Lee Si-woo said. "We will push forward with new game launches, shareholder returns and investment to secure new growth opportunities, and we will do our utmost to ensure these efforts translate into a genuine turnaround."