Netmarble: "Super Cycle Entry Signal Has Been Fired"

[글로벌에픽 신규섭 금융·연금 CP] Netmarble is showing signs of entering a super cycle, driven by the explosive success of 'Seven Knights Revolution' and an upcoming rush of new game releases in the second half. DS Investment & Securities maintained its 'Buy' rating on Netmarble on July 18th while raising its target price from 70,000 won to 79,000 won.

Q2 Performance to Exceed Market Consensus

DS Investment & Securities forecasts Netmarble's Q2 performance at 711.4 billion won in revenue (up 14.1% quarter-over-quarter) and 84.2 billion won in operating profit (up 69.3% QoQ), levels that exceed market consensus.

The key driver of this surprise is Seven Knights Revolution, with Q2 revenue for the game expected to reach 87.4 billion won. RF Online is also expected to maintain strong performance at 63.7 billion won. Existing games are successfully defending their positions, with MCOC expected to grow 8% QoQ and Seven Deadly Sins rising 18%.
A notable development is Netmarble's successful transformation from its previous dependence on external intellectual properties (IP) to achieving consecutive hits with its own IP titles like Seven Knights and RF. This shift is expected to continue reducing IP royalty costs.

New Game Rush Starting Q3

A full-scale new game rush is expected from the third quarter. Scheduled releases include Vampire, Stone Age, Senario Global, and Monster Taming: Star Dive. The fourth quarter will see PC/console title I'm the Only One Leveling Up, along with Seven Deadly Sins: Origin and Game of Thrones Asia launches.

DS Investment & Securities noted, "The recent success of RF/Seven Knights has confirmed two key points: first, Netmarble's publishing capabilities work effectively in the domestic market, and second, nostalgia marketing is effective, potentially extending to hits from past popular IP like Monster Taming."

Cross-Platform Strategy for Global Expansion

Particular attention should be paid to 'Seven Deadly Sins: Origin' and 'Monster Taming: Star Dive' scheduled for release in the second half. Seven Deadly Sins: Origin is Korea's first open-world collection RPG and a PC/console/mobile cross-platform game. Monster Taming currently ranks second on Epic's wishlist, indicating high global interest.
"As the mobile game market becomes saturated, expansion to PC/console platforms is advantageous for global market entry," DS Investment & Securities explained. "Cross-platform games allow simultaneous targeting of domestic/Chinese markets that prefer mobile gaming and Japanese/Western markets that favor console gaming."

Target Price Upgrade Rationale

The target price increase reflects previously unreported games in earlier reports and the acceleration of some game release schedules from Q4 to Q3. The firm projects 2025 operating profit at 364.7 billion won.

For 2026, full contributions from Seven Deadly Sins: Origin and launches of major new titles like Shangri-La Frontier are expected, providing sufficient potential for consecutive profit growth.

Transition to Self-IP Strategy

DS Investment & Securities analyst Choi Seung-ho evaluated: "Netmarble's establishment of a stable revenue structure based on proprietary IP and its global market strategy through cross-platform gaming clearly indicate entry into a super cycle."

The company's strategic shift represents a significant evolution from its earlier business model. By developing successful original IP rather than licensing external properties, Netmarble has not only improved its cost structure but also gained greater control over its game portfolio's long-term value.

The cross-platform approach is particularly strategic as it addresses the varying gaming preferences across different regions. While Asian markets continue to show strong mobile gaming adoption, Western markets maintain significant PC and console gaming segments. Netmarble's ability to serve both markets simultaneously through unified game experiences positions the company well for sustained global growth.

This transformation comes at a crucial time as the mobile gaming market faces increasing competition and user acquisition costs continue to rise globally. Netmarble's focus on proven IP and cross-platform accessibility represents a mature approach to sustainable growth in the evolving gaming landscape.

[글로벌에픽 신규섭 금융·연금 CP / wow@globalepic.co.kr]