Korea-based NCSoft has laid off an undisclosed number of employees as it restructures its business to cut down its declining revenue. It has also converted four of its subsidiaries into independent studios.
NCSoft’s last financial report showed declining sales since Q4 2023. Its Korea and overseas sales and royalties dipped by 7%. Likewise, its operating income has dipped significantly. The company’s operating profit dropped 75% year-on-year.
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As a result of the development, the CEOs Taek-Jin Kim and Byung-Moo Park said NCSoft is “at risk of falling into a chronic deficit company,” adding that “[this is] seriously damaging the creativity and challenging spirit that NCSoft originally had”.
The CEOs affirmed that the “large-scale change” was necessary “for the survival of the company. We promise active support and compensation to those affected”.
NCSoft is spinning out 4 independent studios
Earlier this week, it was widely reported in Korean media including The Korea Times that NCSoft was planning to create four independent spinoff companies to foster greater creativity in the studios. According to reports, the studios will be allowed to operate autonomously.
It was revealed that the spinoff plan was approved during a board meeting on Monday. The company plans to establish three new independent game studios and a fourth firm that will focus on developing artificial intelligence (AI) services.
NCSoft will hold a special shareholder meeting on November 28 to finalize the plan. If approved, the companies will begin operation on February 1, 2025. The studios have been codenamed Studio X, Y, and Z.
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Studio X will handle the company’s massively multiplayer online role-playing game (MMORPG) title Throne and Liberty, Studio Y will handle the shooter title project LLL, and Studio Z will lead the development of the strategy game, TACTAN, previously project G.
NCSoft is implementing cost-cutting measures
In addition to cutting an unknown number of roles, NCSoft has also canceled several development projects and ended numerous support functions. The Korea Times said the company will also implement a voluntary retirement program and workforce reallocation.
Earlier this year, the Korean company shuttered its subsidiary NTREEV and has been laying off employees since April. In June, it spun off two companies namely NC QA (in charge of quality assurance services) and NC IDS (overseeing the development and supply of application software).
NCSoft said it is pushing “the boundaries with never-ending challenge and continues to imagine a new future where everyone is connected through joy”.
