NCsoft has released it first quarter financial results ended in March 31st,2006.

SEOUL, South Korea--(BUSINESS WIRE)--May 3, 2006--Note: 1USD = 939.2 Korean Won (KRW)

NCsoft(R) Corporation (KSE:036570.KS), the world‘s leading developer and publisher of online computer games, today reported first quarter 2006 sales of KRW (Korean Won) 78 billion (US＄83 million), operating income of KRW 8.7 billion (US＄9.2 million), pre-tax income of KRW 10.1 billion (US＄10.7 million) and net income of KRW 6.8 billion (US＄7.2 million).

By region, domestic sales amounted to KRW 54.9 billion (US＄58.4 million), KRW 11.3 billion (US＄12 million) for North America, KRW 3.8 billion (US＄4 million) for Europe, while Japan saw sales of KRW 8 billion (US＄8.5 million). Both Korea and Japan showed an increase in sales from KRW 54.8 billion (US＄58.3 million) and KRW 7.9 billion (US＄8.4 million) respectively. Sales in North America and Europe decreased to approximately half the levels seen in the previous quarter of KRW 26.2 billion (US＄27.9 million) and KRW 7.7 billion (US＄8.2 million), following a decline in sales of City of Heroes(R)/City of Villains(TM) subsequent to the Q405 launch of City of Villains and a slow down of Guild Wars(R) due to the Q206 anticipated launch of Guild Wars Factions(TM). The percentage breakdown of regional sales shows Korea with 63% of total sales, North America with 15%, Europe with 5% and Japan with 10%. Overseas royalties amounted to 7%.

By game, Lineage(R) posted sales of KRW 30 billion (US＄32 million), up 1% from the previous quarter. Lineage II saw its contribution dip 4% to KRW 29.1 billion (US＄31 million) from the previous quarter. Sales of City of Heroes/City of Villains and Guild Wars decreased by 58% and 57% respectively to KRW 6.5 billion (US＄6.9 million) and KRW 6.3 billion (US＄6.7 million).

The first quarter results marked a downturn from the previous quarter and NCsoft attributed this to a lack of new product launches. The company explained the results were generally in line with forecasts made at the beginning of the year. NCsoft anticipated that sales will resume growing in the second quarter with the launch of new products. The company also revised its earnings guidance to KW 353 billion (US＄375.8 million) in sales and to KW 50 billion (US＄53.2 million) in operating profit based on product launch plans and market circumstances.

Rather than being bound by short term results, NCsoft will continue to focus on executing its strategy of creating a network of best-of-breed local development talent around the world that outputs a steady pipeline of content onto a global publishing infrastructure. The company plans to integrate all of its services including account management, billing, and authentication into one unified platform by the end of this year and implement this platform across the globe. NCsoft will provide its games through this platform in 2007, the year the company celebrates its 10th anniversary, and expects that this platform will strengthen the competitiveness of NCsoft.

On April 13th, NCsoft unveiled its car combat massively multiplayer online role-playing game (MMORPG), Auto Assault(R), in North America and Europe. April 28th marked the global release of Guild Wars Factions. The second installment of the Guild Wars series topped Amazon‘s bestsellers‘ lists in Germany and France just two days after its release . Guild Wars Factions is expected to surpass the popularity of the original version. In Korea, the open beta phase of Guild Wars Factions began on April 28th and pay services are expected to begin on May 24th.

2006 marks the fifth year anniversary of NCsoft‘s entry into the North American market. To commemorate the occasion, the company plans to participate in the world‘s largest game show, the Electronic Entertainment Expo (E3), held in Los Angeles from May 10-12th. At E3, NCsoft will showcase for the first time, its new MMO project Aion(TM). On display will be other titles in the company‘s next-generation game portfolio, including Dungeon Runners(TM) and Tabula Rasa(TM).

(Reference) 2006 Q1 Revenues (Unit: KRW mil.)
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Q1, 06    Q4, 05    Q1, 05     QoQ       YoY
--------------------  --------  --------  --------  --------  --------
Sales                  77,973    96,662    74,605       -19%        5%
--------------------  --------  --------  --------  --------  --------
Operating income        8,693    20,281    15,931       -57%      -45%
--------------------  --------  --------  --------  --------  --------
Pre-tax income         10,113    23,243    18,123       -56%      -44%
--------------------  --------  --------  --------  --------  --------
Net income              6,823    19,833    13,442       -66%      -49%
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About NCsoft Corporation

Headquartered in Seoul, South Korea, NCsoft Corporation is the world‘s leading developer and publisher of online games. Founded in 1997, NCsoft is home to Lineage, the world‘s most successful online role playing game and also to Lineage 2, City of Heroes and City of Villains, Guild Wars, Guild Wars Factions and Auto Assault. In coming months, NCsoft is poised to launch other massively multiplayer titles including Tabula Rasa and Aion in addition to various casual games via its game portal, PlayNC(TM). NCsoft has offices in North America, the United Kingdom, Japan, Taiwan, China and Thailand. In fiscal year 2005, NCsoft posted revenues of KRW 338 billion or approximately US＄346 million. For more information about NCsoft visit http://www.ncsoft.com or http://www.PlayNC.com.