NCSOFT’s credit rating has been downgraded for the first time in five years, as the South Korean game developer continues to grapple with weak earnings.
On Apr. 6, NICE Investors Service lowered NCSOFT’s credit rating from AA to AA-. The downgrade marks a reversal of the company’s June 2020 upgrade to AA. The outlook was rated “stable.”
The agency said revenue growth would likely remain limited this year, citing a broader slowdown in the domestic gaming market.
“Mobile gaming has become less popular since 2023, as people have more leisure activities to choose from and are spending more time on other types of entertainment, like over-the-top (OTT) streaming services,” an official from NICE noted.
“Short-form content is becoming increasingly popular, while gamers are growing tired of in-game spending,” the agency said. “Stricter regulations on loot boxes and the shorter life cycle of mobile games are also contributing to a more challenging business environment.”
NCSOFT’s revenue dropped from 2.57 trillion won ($1.7 billion) in 2022 to 1.58 trillion won in 2023. Its operating profit of $383.6 million turned into a net loss of more than $68.5 million over the same period.
Meanwhile, Korea Investors Service continues to assign NCSOFT an AA rating but maintains a negative outlook.
