Pearl Abyss, who are the owners of CCP, had their Q3 results today.
Full transcript of the call is at the bottom of this post.
The presentation can be found https://irsvc.teletogether.com/pearlabyss/pdf/pearlabyss2024Q4_eng.pdf?2
And, with an English translator, the call recording can be found https://irsvc.teletogether.com/pearlabyss/pearlabyss.php?c=pearlabyss&y=2745
For Eve Online, this was a record Quarter since ownership under Pearl Abyss and a record year since Pearl Abyss bought CCP.
Pearl Abyss
In Q4 Pearl Abyss made an unexpected jump in revenues to 95.7bn Won. A rise of 13% on Q4 2023 and some 20% better than what the market expected. The main driver here was better than expected performance at both Black Dessert and Eve Online. Black Dessert helped by an anniversary event at the end of the year.
Operating profits therefore moved to a 2.4bn Won profit.
Net Profit than exploded to a 46.8bn Won profit in Q4 meaning for the full year whilst there will be an Operating Loss there will be a Net Profit.
This whole difference between Operating Profit and Net Profit has to have alarm bells going. In the last 12 months Operating Profits are actually a loss of 12bn Won vs Net Profits seeing a profit of 60.9bn Won. All down to some FX but also their Investment Company. That implies some cracking profits being made in the Investment Company.
We will get more details on what this difference is when the Full Results are published later in the year. Hopefully around the end of April.
Crimson Desert
This has been delayed five times since it was first announced back in 2019. It really needs to come through to get Pearl Abyss back to profits.
Expected launch is late 2025. That could well push out the DokeV game also.
The net effect of this on Pearl Abyss therefore is to push the Crimson Desert revenues to the right. That means that 2025 revenues will now be lower than expected.
Eve Online
This Quarter there was no split between Eve Online and Black Dessert in the Presentation. That was odd. There is a new Finance Director which may have been the cause but the decision to merger the revenue streams for the Presentation is still odd.
That said, the first analyst question addressed this and the answer was that the proportion of Revenues to each game was the same as in the last quarter.
In Q3 Revenues were 79.5bn which contained Eve 20.6 + Black Dessert 54.0 + Others 4.9.
In Q4 Revenues were 95.7 which includes others at 4.6. To keep the same proportion therefore, Eve will be 25.1 and Black Dessert 66.0.
That means the growth on Q4 2023 was a massive 26.1% but was close to what I expected on this Blog when I wrote about the Q3 2024 result - i said i was looking for 24bn Won in Q4.
The above chart shows quarterly revenues from Eve IP (=Eve Online + Eve Echoes etc) since Pearl Abyss bought Eve. You can clearly tell the step up in revenues during the pandemic which looked like it was rolling over during 2023.
However, 2024 has been a real boost of a year with Quarterly revenues getting back to pandemic levels, and then more.
And therefore means the 2024 revenues for Eve IP was 85.2bn Won. Which is higher than the 2020 pandemic year where revenues got to 73.6bn Won and then fell to 72.9 in 2021, 72.5 in 2022 before rising slightly to 73.0 in 2023.
The analysts that follow the stock now feel more confidence about Eve Online for 2025 and 2026. For 2025 analysts are now looking for 88bn and for 2926 91bn.
CEO Hilmar will have the player count details, the subs details etc. So he will know how realistic this looks.
The question, as ever, is if CCP is now profitable. We wont know that until we see the CCP Accounts in April 2025.
Changing currency, but in 2023 CCP made revenues of USD56m and a loss of USD16m. Therefore, unless there has been some cost cutting i don't think CCP will be back in profits yet but it should be closer.
Comment made on Eve Online in the transcript
"In case of EVE Online, we featured two expansion packs in EVE Vanguard in 2024 and worked hard to strengthen the EVE lifecycle. In particular, we launched Revenant expansion pack in Q4 and provided a rich variety of things to enjoy to our users. Apart from this, we thoroughly prepared for new services to increase revenue."
"EVE plans to feature expansion pack and diverse content in 2025 as well. In addition, at the EVE Fan Fest in May, we plan to have diverse events and showcase our 2025 roadmap as well. We're also smoothly preparing for a new title to secure our new growth engine. First, EVE IP-based sandbox game EVE Frontier is receiving user feedback and we are refining and polishing the game. Since the game is in its last stages of completion, we will do our best so that we can have great results."
More on Pearl Abyss
The Balance Sheet looks to be in much better health for Pearl Abyss.
The Bonds have been paid off and the whole Liability side of the Balance Sheet looks in much better shape.
On the Asset side, they have these "Financial Instruments" and "Financial Assets" which i will have to look into more carefully when the full set of Accounts are released.
The transcript of the call (translated to English)
Event Date: 02/10/2025
Company Name: Pearl Abyss
Event Description:Y 2024 Earnings Call
Source: Pearl Abyss
Version: Final
For more event information and transcripts,
visit {<a href='custom:bloomberg:263750 KS Equity EVT BB-7081749-1'>263750 KS Equity EVT BB-7081749-1 <GO></a>}
Y 2024 Earnings Call
Presentation
Operator:
Good morning, and good evening. Thank you all for joining the Conference Call for the Earnings Results of Pearl Abyss. This conference will start with a presentation followed by a Q&A session.
Company Name: Pearl Abyss
Event Description:Y 2024 Earnings Call
Source: Pearl Abyss
Version: Final
For more event information and transcripts,
visit {<a href='custom:bloomberg:263750 KS Equity EVT BB-7081749-1'>263750 KS Equity EVT BB-7081749-1 <GO></a>}
Y 2024 Earnings Call
Presentation
Operator:
Good morning, and good evening. Thank you all for joining the Conference Call for the Earnings Results of Pearl Abyss. This conference will start with a presentation followed by a Q&A session.
Now, we'll begin the presentation on Pearl Abyss' Fourth Quarter and Annual Earnings Results of the Fiscal Year 2024.
Kim Yoon, Investor Relations:
Greetings. I am Kim Yoon from Pearl Abyss IR Team. First of all, I express my deepest gratitude to the analysts and investors in and out of Korea for taking part in the 2024 Q4 and full-year Pearl Abyss earnings presentation despite your busy schedules.
Kim Yoon, Investor Relations:
Greetings. I am Kim Yoon from Pearl Abyss IR Team. First of all, I express my deepest gratitude to the analysts and investors in and out of Korea for taking part in the 2024 Q4 and full-year Pearl Abyss earnings presentation despite your busy schedules.
Before elaborating on today's business results, I would like to ask for your understanding regarding the following. The financial and business results contained in today's earnings release have been prepared for the convenience of investors and is subject to change depending on the final closing of our books. In addition, the accuracy and completeness of the financial and business results in the earnings results material are not guaranteed and the Company is not obliged to give updates of the accounts given after this date. So, please take these factors into consideration.
We have here with us at the earnings presentation today, Pearl Abyss' CEO, Heo, Jin-young; CBO, Kim, Gyeong-man; and CFO, Jae-min Yoon. We will first hear business performance presentation highlights from CFO, Jae-min Yoon and then engage in a Q&A session.
Jae-min Yoon, Chief Financial Officer:
Greetings. I am Jae-min Yoon, newly appointed CFO of Pearl Abyss. Thank you once again for taking part in our Company's earnings conference call despite your busy schedule.
I would like to touch upon 2024 Q4 and full-year major business activities and performance. Black Desert celebrated 10 years of service in 2024, and while providing more fun content through rich user events, we express our gratitude to the users who were here with the game for a long time. In particular, in June, we hosted a Banquet in Beynac, France, which is the actual Heidel City in the real world. And in December, we expanded our existing Calpheon Banquet in December to Black Desert Festa, and held the biggest-ever festival and provided a venue for celebration where all users can get together and enjoy.
Jae-min Yoon, Chief Financial Officer:
Greetings. I am Jae-min Yoon, newly appointed CFO of Pearl Abyss. Thank you once again for taking part in our Company's earnings conference call despite your busy schedule.
I would like to touch upon 2024 Q4 and full-year major business activities and performance. Black Desert celebrated 10 years of service in 2024, and while providing more fun content through rich user events, we express our gratitude to the users who were here with the game for a long time. In particular, in June, we hosted a Banquet in Beynac, France, which is the actual Heidel City in the real world. And in December, we expanded our existing Calpheon Banquet in December to Black Desert Festa, and held the biggest-ever festival and provided a venue for celebration where all users can get together and enjoy.
In addition, for Black Desert, we improved the game through system and convenience updates, and provided content based on user opinions, and made preparations for the next 10 years. In particular, in 2023, the final part of the Land of the Morning Light: Seoul was released and completed the Fantasy World which encompasses West and East. Also, we launched the Black Desert China that we had been preparing for a long time and achieved regional expansion. On the other hand, in December, Black Desert introduced the Kurenai class, the first in its world to use guns and provided freshness to the game.
For Console, we launched the New class Dosa, which we first introduced in PC, and implemented consistent updates. For Mobile, we had the New class Kurenai and updated Atoraxxion content where party members can cooperate and enjoy together and worked to add more fun to the game.
In case of EVE Online, we featured two expansion packs in EVE Vanguard in 2024 and worked hard to strengthen the EVE lifecycle. In particular, we launched Revenant expansion pack in Q4 and provided a rich variety of things to enjoy to our users. Apart from this, we thoroughly prepared for new services to increase revenue.
First of all, for Crimson Desert, we provided B2C hands-on demo at G-STAR in November. And in December at TGA, we disclosed new gameplay video showcasing a vast open world and announced our launching schedule. In case of blockchain-based EVE Frontier, we launched a Founder Access pack where users can experience the game in advance and based on user feedback, we are continuously upgrading the game.
Next, I will cover Company's 2024 full-year and Q4 performance. 2024 operating revenue posted KRW342.4 billion and grew 2.7% YoY, and operating loss posted KRW12.1 billion and deficit decreased YoY. Net profit posted KRW61 billion and increased 301.3% YoY. Q4 operating revenue posted KRW95.7 billion and increased 20.4% QoQ. Operating profit posted KRW2.4 billion and net profit posted KRW46.8 billion and turned to a surplus.
I will explain in more detail regarding operating revenue. In this quarter, the operating revenue from gain posted KRW91.1 billion and increased 22.3% QoQ. Other revenue posted KRW4.6 billion and decreased 8% QoQ. To break down operating revenue into different regions, it posted 18% in Korea, 30% in Asia, and 52% in NA in Europe. For the platform breakdown, it was 76% for PC, 20% for Mobile, and 4% for Consoles.
Next, I would like to walk you through operating expenses. Q4 operating expenses posted KRW93.4 billion, a 5.3% QoQ increase. In case of labor expenses, it posted KRW46.9 billion and increased 6.2% QoQ. For your reference, we have 1,306 employees as of end Q4 and there are 739 developers among them, and takes up 57% of total employees. For commissions expenses, it posted KRW18.4 billion, a 8.3% increase QoQ. In case of advertising, due to Crimson Desert marketing for events including G-STAR and TGA, it increased 32.3% QoQ and posted KRW11.8 billion.
Lastly, I will go over 2025 Q1 and 2025 full-year major highlights.
2025 Black Desert will showcase the new Hwanghae region which will connect the last 10 years and the next 10 years together and continue to make diverse attempts to strengthen PvP content. In addition, we will provide not only new content but also provide more convenience-related updates in the game and work hard to continue stable and consistent service. We plan to also strengthen communication with users. In March, we will celebrate the nine years of NA in Europe service and communicate and directly meet with users in the U.S., and provide diverse things for our users to enjoy. In addition, for Black Desert, we showcase the new Dream Horse, Voltarion, which uses lightning, and plan to add Orzekea, the last story to the co-op dungeon Atoraxxion in Q1 as well.
Next, I would like to walk you through operating expenses. Q4 operating expenses posted KRW93.4 billion, a 5.3% QoQ increase. In case of labor expenses, it posted KRW46.9 billion and increased 6.2% QoQ. For your reference, we have 1,306 employees as of end Q4 and there are 739 developers among them, and takes up 57% of total employees. For commissions expenses, it posted KRW18.4 billion, a 8.3% increase QoQ. In case of advertising, due to Crimson Desert marketing for events including G-STAR and TGA, it increased 32.3% QoQ and posted KRW11.8 billion.
Lastly, I will go over 2025 Q1 and 2025 full-year major highlights.
2025 Black Desert will showcase the new Hwanghae region which will connect the last 10 years and the next 10 years together and continue to make diverse attempts to strengthen PvP content. In addition, we will provide not only new content but also provide more convenience-related updates in the game and work hard to continue stable and consistent service. We plan to also strengthen communication with users. In March, we will celebrate the nine years of NA in Europe service and communicate and directly meet with users in the U.S., and provide diverse things for our users to enjoy. In addition, for Black Desert, we showcase the new Dream Horse, Voltarion, which uses lightning, and plan to add Orzekea, the last story to the co-op dungeon Atoraxxion in Q1 as well.
For Black Desert Console, we will launch PlayStation 5 and Xbox XS version in the first half of the year and provide a better experience to users. In addition, we will have a user event which will celebrate five years of Console cross-play and strengthen communication with Console users. In the Q1 update, we gave the Dream Horse to everyone in January and opened the Season Server Dream and plan to help character growth.
In case of Mobile, we plan to feature new content Nightmare Trishira which combines PvP, and PvE, and (inaudible) skills which can enable stronger attacks compared to existing skills.
EVE plans to feature expansion pack and diverse content in 2025 as well. In addition, at the EVE Fan Fest in May, we plan to have diverse events and showcase our 2025 roadmap as well. We're also smoothly preparing for a new title to secure our new growth engine. First, EVE IP-based sandbox game EVE Frontier is receiving user feedback and we are refining and polishing the game. Since the game is in its last stages of completion, we will do our best so that we can have great results.
We plan to launch Crimson Desert in Q4 of this year and we are planning diverse marketing events throughout the year starting with GDC slated for March, we will participate in many game events in the year and promote our game. In addition, we will disclose the launching dates in this process and strictly manage our schedule so that the Q4 launch will not have any issues.
It has been a long time since we first showcased Crimson Desert to the market in 2019. It was our first attempt at a high-quality open-world console market and it took more time than we had expected in the beginning. But we are confident that Crimson Desert will bring about high performance. As many people have been waiting, we will do our best until the end to achieve results that can repay your anticipation. We will look forward to your continued interest and support. Thank you very much.
With this, we will conclude the 2024 Q4 and full-year Pearl Abyss Business Results Presentation and start the Q&A session.
Questions And Answers
Operator:
Now, Q&A session will begin. (Operator Instructions)
Questions And Answers
Operator:
Now, Q&A session will begin. (Operator Instructions)
The first question will be provided by Jingu Kim from Kiwoom Securities. Please go ahead with your question.
Jingu Kim, Analyst:
Thank you very much for this opportunity. I am Jingu Kim from Kiwoom Securities, and I have about two large questions. First question is that in Q4, can you give us your take on the China Black Desert online contribution to revenues? And can you give us your current figures for revenues and
traffic as well?
Jingu Kim, Analyst:
Thank you very much for this opportunity. I am Jingu Kim from Kiwoom Securities, and I have about two large questions. First question is that in Q4, can you give us your take on the China Black Desert online contribution to revenues? And can you give us your current figures for revenues and
traffic as well?
And I saw that in this earnings presentation, there was not a breakdown for different IPs. So, can you give us a breakdown for Black Desert and EVE? And my next question is -- simple question is about the financial profit and loss and it seems that it's KRW53 billion. So, can you give us the more detailed account for that? Thank you very much.
Unidentified Speaker:
Thank you for your question. And I think you asked about the revenues for Black Desert China. Black Desert China started official service in October of last year. And we are actually seeing the performance that that we had predicted internally. However, for Black Desert, it has been already 11 years since it was first started. So, it has been a game that was in the market for a long time. So, we can see that for the performance in China, it is not easy to have as high performance as new titles. Despite that fact, since Black Desert has been seeing great results in the global market for a long time, we are going to make sure that it takes part and settles in the China market very stably so that we can service for a long time and do our best with the publisher.
Unidentified Speaker:
Thank you for your question. And I think you asked about the revenues for Black Desert China. Black Desert China started official service in October of last year. And we are actually seeing the performance that that we had predicted internally. However, for Black Desert, it has been already 11 years since it was first started. So, it has been a game that was in the market for a long time. So, we can see that for the performance in China, it is not easy to have as high performance as new titles. Despite that fact, since Black Desert has been seeing great results in the global market for a long time, we are going to make sure that it takes part and settles in the China market very stably so that we can service for a long time and do our best with the publisher.
And regarding our outlook for Black Desert for 2025, because Black Desert has had our know-how for more than 10 years, we will continue our stable and consistent service.
What we have felt for the last 10 years when servicing Black Desert was that based on user communication, what was most important is to show consistent content.
For the next 10 years of service as well, we will listen carefully to the opinions of users and showcase high-quality content so that we can maintain our current revenue level.
You also asked a question about the revenue breakdown for different IPs.
What we have felt for the last 10 years when servicing Black Desert was that based on user communication, what was most important is to show consistent content.
For the next 10 years of service as well, we will listen carefully to the opinions of users and showcase high-quality content so that we can maintain our current revenue level.
You also asked a question about the revenue breakdown for different IPs.
Regarding the revenue breakdown for Black Desert and EVE IP, the breakdown is quite similar to our last presentation numbers.
You asked about our financial P&L and regarding our Q4 financial P&L.
According to the FX rate increase, we had some profits related to FX and we also had the reflection of the valuation gains for investment Company. So, it recorded KRW53.3 billion. For your reference, the equity valuation -- equity value of evaluation for investment Company is being done late each year.
Let me add a little bit more color to our performance and the background behind that. Regarding our performance for Q4, we saw an increase in Black Desert online revenues and we had very good results.
Including our performance in China, we had a performance increase for all regions and after our Festa in December, we had a very strong rebound in our existing regions including North America and Europe which drove our sales or revenue increase.
And we are in the middle of Q1 I believe right now. And regarding our performance that has been reported so far, it is maintaining very good results. So, we believe that Q1 performance also will be solid.
The answers were given by our CBO, Kim Gyeong Man; CFO, Jae-min Yoon; and CEO, Heo Jin-young. We will take the next question.
Operator:
The following question will be presented by Kim Jae Yun from HSBC. Please go ahead with your question.
Kim Jae Yun, Analyst:
Thank you very much for the opportunity. I am Kim Jae Yun from HSBC and I have some questions related to Crimson Desert. You mentioned that you are going to work hard to launch your game in Q4 without any issues and engage in full-fledged marketing. So, I'm a little bit curious about whether you're going to enjoy or you're going to participate in more diverse events apart from what you had participated in for 2023 and 2024 for different global game shows around the world. So, will that be more or less similar for this year or will you participate in more types of game shows or more marketing efforts?
And my second question, your anticipated package price for Crimson Desert. We are seeing prices for AAA Global games actually go up, so can you give us your position on what you think your pricing will be? Thank you very much.
Jin-young Heo, Chief Executive Officer:
Thank you very much for your questions. And regarding Crimson Desert, we are currently ongoing with the last stage of development which is QA, and making our last preparations for launching.
In addition for successful launching, for this year, we are planning more aggressive marketing.
Starting off with the GDC in March this year, we are going to participate in a variety of game events and we're going to promote our game to users around the world. And this year, we're also going to showcase a new demo build as well.
And we are going to utilize efficiently our marketing expenses and cooperate with our partners and participate in more events so that we can promote our game to more users.
Regarding your question about the anticipated package price, we believe that Crimson Desert will actually exceed the expectations of the market and provide a game which is a game that is very applicable to the vast open world and come up with excellent results.
Regarding many years of development based on our proprietary engine, Crimson Desert has succeeded in accomplishing very high levels of action with high levels of freedom, a very dynamic combat system, and an open world that has a very high degree of completeness.
In addition, during the last two years, we had demos for our partners, various media outlets, and users, and we could find out firsthand the high level of satisfaction.
So, we believe that since our game actually befits the AAA level of quality of other similar games, we are considering a price point that is similar to the games that we believe that we are as good at or even better at.
The answer was given by our CEO, Heo Jin-young. We will take the next question.
Operator:
The following question will be presented by Kim Jinwoo from CGSI. Please go ahead with your question.
Kim Jinwoo, Analyst:
Thank you for the opportunity. I'm curious about the titles you are going to launch after Crimson Desert, so can you tell us more about that? And how many of your developers or employees are working for other titles that will come after Crimson Desert?
And we are going to utilize efficiently our marketing expenses and cooperate with our partners and participate in more events so that we can promote our game to more users.
Regarding your question about the anticipated package price, we believe that Crimson Desert will actually exceed the expectations of the market and provide a game which is a game that is very applicable to the vast open world and come up with excellent results.
Regarding many years of development based on our proprietary engine, Crimson Desert has succeeded in accomplishing very high levels of action with high levels of freedom, a very dynamic combat system, and an open world that has a very high degree of completeness.
In addition, during the last two years, we had demos for our partners, various media outlets, and users, and we could find out firsthand the high level of satisfaction.
So, we believe that since our game actually befits the AAA level of quality of other similar games, we are considering a price point that is similar to the games that we believe that we are as good at or even better at.
The answer was given by our CEO, Heo Jin-young. We will take the next question.
Operator:
The following question will be presented by Kim Jinwoo from CGSI. Please go ahead with your question.
Kim Jinwoo, Analyst:
Thank you for the opportunity. I'm curious about the titles you are going to launch after Crimson Desert, so can you tell us more about that? And how many of your developers or employees are working for other titles that will come after Crimson Desert?
Jin-young Heo, Chief Executive Officer:
As we had mentioned, we are actually focusing all of our resources on the launching of Crimson Desert now. However, we are still smoothly developing DokeV with the accumulated assets that we had accumulated so far, and we are considering actually disclosing our development status in an appropriate time within this year.
And we are actually doing our best so that after we launch Crimson Desert, we can actually inject as many development manpower as possible to actually have a fast release of DokeV afterwards. So, we are making those preparations. And for Plan 8 as well, since we are focusing on Crimson Desert and DokeV, the actually showing of Plan 8 is becoming a little bit belated. However, we are going to do our best so that consecutively we can share with you our development process for Plan 8 as well.
And regarding the numbers of developers or development personnel, it's very flexible according to the degree of development of the project, so we can't give you an exact number on how many developers are working on an exact project.
And in the case of Crimson Desert, since the development is nearing its completion, we have more developing personnel that are moving to DokeV. The answer was given by our CEO, Heo Jin-young.
Operator:
It seems that there are no other questions in the queue, so with this, we will complete our business results presentation session for 2024 Q4 and full year. Thank you very much for your participation.
As we had mentioned, we are actually focusing all of our resources on the launching of Crimson Desert now. However, we are still smoothly developing DokeV with the accumulated assets that we had accumulated so far, and we are considering actually disclosing our development status in an appropriate time within this year.
And we are actually doing our best so that after we launch Crimson Desert, we can actually inject as many development manpower as possible to actually have a fast release of DokeV afterwards. So, we are making those preparations. And for Plan 8 as well, since we are focusing on Crimson Desert and DokeV, the actually showing of Plan 8 is becoming a little bit belated. However, we are going to do our best so that consecutively we can share with you our development process for Plan 8 as well.
And regarding the numbers of developers or development personnel, it's very flexible according to the degree of development of the project, so we can't give you an exact number on how many developers are working on an exact project.
And in the case of Crimson Desert, since the development is nearing its completion, we have more developing personnel that are moving to DokeV. The answer was given by our CEO, Heo Jin-young.
Operator:
It seems that there are no other questions in the queue, so with this, we will complete our business results presentation session for 2024 Q4 and full year. Thank you very much for your participation.
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