Date: February 8, 2023 (Wed) 16:00
True Seek: Krypton Kim Changchun, CEO BAE Jong-un CFO
Contents of the presentation: Craft ton 2022 performance and game launch schedule/strategy
■ Craft ton 4Q and annual performance summary, new schedule
▣ Summary of sales
-Annual sales of KRW 1.85 trillion (-1.7%)
ㄴ Being Mobile BRIM regional vans, such as internal and external unstable situations, and maintain similar numbers similar to the previous year.
-4Q sales of KRW 473.8 billion (electricity +9.2%, +6.8%last year), operating profit of KRW 126.2 billion (electricity-12.8%, +178.8%)
)
B mobile game 254.7 billion won (electricity-16.1%,-9.8%), PC game 139.1 billion won (electricity +6.1%, +21.6%), console game 67.7 billion won (+477.7%, +912%last year) 121
KRW 100 billion (44.1%of electricity,-35.3%last year)
▣ Cost configuration
-4Q operating expenses of KRW 347.6 billion (electricity +20.2%,-12.7%last year)
-Labor cost of KRW 63.4 billion (electricity-35.9%,-31.4%last year)
B due to the impact of other liabilities that are recognized for past bonuses,
-App fee and sales cost KRW 57.7 billion (electricity +20%, 0%last year)
The release effect of the Callisto Protocol increased Qom, but GMI service of Being Mobile was suspended, and it maintained similar levels compared to the same period last year.
-Payment fee KRW 102.7 billion (electricity +20.5%,-13%last year)
The 4th quarter of 2022, the payment fee is increased compared to the previous quarter, but the reduction of the cost of cloud servers is decreased compared to the previous quarter due to the launch of large-scale e-sports competitions such as the PUBG Global Championship.
-Marketing cost of KRW 81.2 billion (electricity +311.7%, +75.1%last year)
ㄴ Increased cost by expanding marketing before and after the launch of Callisto Protocol
-Well’s compensation cost of 9.7 billion won (electricity-24.9%,-116.5%)
B was reduced by 68.7 billion won compared to last year, which is due to the base effect of one-time accounting related to the major shareholders’ stock compensation donation in the fourth quarter of last year.
-Other 52.4 billion won (electricity +76.2%, +111.6%last year)
▣ Profit configuration
-Annual operating profit of KRW 751.6 billion (15.5%), operating margin 41%
ㄴ Being Mobile BRIM regional vans, such as internal and external unstable situations, and maintain similar numbers similar to the previous year.
-4Q operating profit of KRW 126.2 billion (electricity-12.8%, +178.8%last year)
-4Q net profit of KRW 165.4 billion (electricity-173.1%,-2751.1%)
The net profit of the fourth quarter of 2022 is a decrease in the previous quarter and year-on-year due to the impact of operating losses due to the reflection of the exchange rate and intangible asset damages.
▣ Business status
-PUBG IP continuous growth, in 2022 F2P conversion, in-game content overall improvement and continuous growth structure establishment
-It-enhancing reliability and increasing user satisfaction by enhancing a virtuous cycle, anti-cheat to be a ‘life game’ that is loved for a long time
-Is to expand mobile platform expansion, production and global live operation experience with new state
-AAA console game launch with global market challenge, platform expansion attempts, production/publishing capacity internation, and accumulated know-how to minimize opportunities and risks for market expansion by using accumulated know-how
-The studio autonomy is based on HQ closely collaboration, internal testing and monitoring to strengthen the quality of the user’s expectation.
-In the initial stage studio or game with great potential, we invested in equity investment and support, and expanded portfolios by publishing.
-The current pipeline will increase the number of second party publishing, as it expands this year.
-Ai/ deep learning technology to increase game production efficiency and dedicated organizational settings for technical universalization, deep learning-based new gameability discovery
-The ‘Virtual Game Friend’ Technology, where users play with characters in the game and become friends, developed in 2023 and introduced into games in 2024
-It-immersive space and creative tools to utilize them, developing open world UGC game platforms with economic systems for operation, test and formal release in the first half of the year.
-Open World UGC Game Platform is managed as an independent company after completing the JV procedure.
▣ New release schedule
■ Q & A
The two-year launch plan is six kinds of self and one publishing. What is the game, and what is the schedule?
Kim Changchun = There is no scheduled release of a large anticipation this year.
Large anticipation usually costs a lot of money in the market.
There are several games currently being developed, and it will be released more next year.
One mobile game under development in the studio and one game in charge of publishing will be released this year.
The exact release date is hard to say.
In addition, from this year, we will strengthen the publishing capabilities and show the development as a publisher.
Although there are one kind in the data, I want to have a chance to be more at-bats this year.
As a result, we are establishing methodologies and strategies, and I think we will be able to accumulate this year’s experience and maximize our strengths in our own development games next year.
It is hard to say how many more publishing games are added and when it is released, but we are trying to show the first case this year.
What specifically speaks about the impact of AI and deep learning on the game, and more specifically about commercialization plans and competitiveness?
Kim Changchun = People may be interested in AI, such as chat GPT, and see such AI models as a foundation model of large scale.
I think it has been exceeded in various fields.
However, it is not to say that this model is developed by itself.
This requires a lot of capital, which does not mean going to a very big, big tech company through the competition.
I think that the foundation model does not apply to everything, but it is a time when each of them tuned and applied it.
We are the first step to quickly apply adaptation, such as forming a model that fits each stage, creating a story that fits the concept, creating a 3D stage, or creating a program according to the plan.
In addition, it has been developing to apply AI for a few years, such as TTS, dialogue, animation, or artificial intelligence applied to gameplay.
Based on the technology, it aims to apply it to its own games.
It is still difficult to say whether it can be commercialized.
However, there is a case where the tools created for their own use in the past eventually obtained general purpose.
For example, Slack used it as a game company community tool, so it’s no longer a general tool.
If we quickly introduce and develop games, we believe that the possibility is open to commercialization.
BAE Jong-un = In terms of user point of view, Crampon thinks that AI deep learning technology is trying to discover the gameplay that breaks the traditional gameplay formula.
Even if a user plays alone, he feels like he’s a real Virtual friend.
It is not introduced directly from the PUBG, and as an example, if you apply for squad play, TTS, chatbot, and game AI are applied to play with three friends.
If you want to implement, you are thinking about the Virtual Human, which can work as a virtual friend.
What is the size of guidance and hiring for this year’s earnings, sales of Callisto protocols and sales?
BAE Jong-un = This year’s earnings guidance is expressed, and if you interpret it as a manager, it is aimed at growing the PUBG IP-based sales and operating profit in 2023 by 2023.
In fact, if you look at the pipeline from Kim Changchun’s representative presentation, this year, this year is preparing for a new work that will be released for the next three years.
In the case of sales, the PUBG PC and the console have secured a lot of users after organization, and the test for the good Moderation was well applied.
This part will be upgraded to expand sales.
Mobile had a global reopening, there was an economic downturn, and it was difficult to stop GMI services such as India.
In 2023, uncertainty and regulations are alleviated by certain regions, and we are making efforts.
If the big axis, the GMI service, resumes, the mobile is also difficult, even if the environment is difficult.
In 2023, I asked if there was a new work or anticipation, and I understand that I have questions about the continuous growth of PUBG IP.
As mentioned earlier, I don’t have to worry about it from 2024.
PUBG PC recorded the largest daily sales of PUBG when the Guardian Growth Skin was released on January 18.
This is not a story of growth.
We are aiming for this, and we are actually doing our best, so we will make more effort.
It has a conservative recruitment plan rather than in the past.
In terms of labor costs, it is similar to 2022, but it is slightly increased.
It has grown to a considerable number of 20 years in the past 19 years, and plans to recruit quite conservatively.
The cost of paying a fairly fixed amount of money for our business is the payment fee, which is the cost of server, engine, e-sports, and outsourcing.
Wouldn’t this be a similar level this year?
Marketing costs rose to the launch of Callisto Protocol and Moon breaker Early Access, but 2023 will fall significantly compared to the previous year.
It grows around PUBG IP and aims to grow with sales, operating profit, and profitability by actively making cost efficiency.
The sales volume of the Callisto Protocol is more than the market so far.
In mid-January, the company made a price promotion while showing the new game plus.
Today, DLC will be released for the first time, and new contents such as various modes and story LCS until summer, so Callisto Protocol even launched DLC.