NCSoft is the latest company to undergo layoffs and reorganization following tough financial results, announcing a less concentrated, more focused studio structure.
The plans were covered in the Korean press, with a report by Yonhap News Agency saying that NCSoft co-CEOs Taek-Jin Kim and Byung-Moo Park sent a letter to employees saying that, after discussions and analysis, “just a few symptomatic methods” (via Google Translate) wouldn’t enough to overcome the company’s struggles. So, with apologies to employees, they announced the cuts and big plans to help avoid “becoming a chronically loss-making company”.
These plans involve moving away from having everything concentrated at the top, proposing that running studios more independently would help recapture some of the creativity that NCSoft has had. Their hopes are that supporting studios as more independent parts of the whole will elevate them to become more creative, competitive, and to build a flexible development system. They’ve named four new subsidiaries with temporary names for now: NCAI, Studio X, Studio Y, and Studio G.
NCSoft has had several mixed to negative quarters, with mobile portfolio underperformance sometimes leading the way. Another report from Yonhap (via Reddit) says that “Last year, on a consolidated basis, revenue and operating income plummeted 30.8 per cent and 75.4 per cent, respectively, compared to 2022”. Worse, the second quarter of this year also showed serious drops in operating profit, down to 8.8 billion Won (about 6.4 million USD). Compare that to a take of 217 billion Won (about $158 million USD) in Q3 2020.
When you look at those steep drops, these cuts and reorganization measures do make more sense. The company isn't leaving any option off the table, even offering voluntary resignation packages as it shifts employees into divisions to hopefully capture some magic once again.
If you’re wondering about Throne and Liberty, well, its Korean release has been bumpy, and the global launch is not expected to make much of a difference since NCSoft and Amazon have to share revenue.