NCsoft Announces First Quarter 2008 Financial Results

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 year.

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.

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 owners.

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