Is NCSoft moving out of the gaming industry? Cho Jin-seo of The Korea Times reports that the company is considering moving into conventional Internet services, most notably, a social networking service, Openmaru, which seems to include several "Web 2.0" style services.
NCSoft's stock has been cut in half in the past 2 months. Its revenues are down 16% in the last quarter and the reception of the new game, Tabula Rasa, has been lukewarm.
This is usually a bad sign for a company. First of all, online gaming itself is a thriving business. Usually, a company diversifies when its market is maturing. While online gaming seems to be plateauing in Korea, globally, the industry is growing rapidly. NCSoft really hasn't had a major hit since Lineage II. Its forays into the US market and strategy to build a global gaming company have met with limited success Guild Wars is a solid performer and City of Heroes/Villains has also had reasonable, but not overwhelming success.
Also, of course, social networking / Web 2.0 type businesses are intensely competitive and a lot of innovation has come from new startups, not existing companies. It would seem more sensible for NCSoft to work on acquiring additional game properties and build on its existing market than move into a completely new direction. Casual MMOs would be an obvious target as would migrating its games over to the free-to-play / virtual asset purchase business model.
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