Today, Pearl Abyss announced its Q1 results (January - March 2025).
As a reminder, Pearl Abyss, a South Korean gaming companies, bought CCP (Eve Online) in 2018. It has two main income generating games - Black Desert and Eve Online. Black Desert was launched in 2015 and is now in decline vs Eve Online was launched in 2003, peaked in 2013 but is now back to growth.
and at the bottom of this post is the full English language translation of the earnings call including questions and answers from the analysts.
The Q1 Results
Once again, the revenues of Black Desert and CCP (Eve Online) have not been separated out. But i suspect Black Desert was around 61 billion Won vs 67 billion in Q1 2024 and so CCP was 23 billion (=17 billion Eve Online + 6 billion Eve Echoes) vs 18 billion in Q1 2024 (=15 billion Eve Online + 3 billion Eve Echoes).
Black Desert is in decline vs CCP growing. But, before CCP Iceland starts walking around as if they own the place - the core Black desert i think is still growing, it is the mobile side that is taking a hit from China.
I always compare Q1 to the prior year Q1 and therefore strips out holiday effects live Christmas.
Hence, for me the focus is Q1 2025 vs Q1 2024 where revenues fell 2% to 83.7 billion Won.
Within this i suspect Black Dessert fell 9% which is really their PC platform growing 5% but their mobile falling 32% which Nosy points out is them ending their Tencent China deal 3 months early.
Whilst Eve Online grew 28% with Eve Online rising 13% and Eve Echoes doubling.
However, where as in Q1 2024 there was a small profit of 0.6 billion Won, in Q1 2025 there was a loss of 5.2 billion Won.
But, as is often the case these days this was bailed out by gains taken on the value of assets held in Pearl Abyss Capital and so generating an overall profit of 0.5 billion Won. I need to dig deeper into Pearl Abyss Accounts again to see what this is all about because i am pretty sure this does not generate cash, merely accounting profits.
But lets turn back to the core business loss of 5.2 billion Won - this was actually expected by the market and driven by the new game expenditure of CCP which is something we saw in 2024 in our review of the Pearl Abyss Iceland accounts. So not pressure Hilmar.
Eve Online (+ Eve Echoes)
The chart below shows the quarterly revenues from the Eve ecosystem. I have had to make some assumptions for Q4 2024 and Q1 2025 given Pearl Abyss no longer split them out.
So a decent progression since 2023 and the chart below shows the year-on-year change in quarterly revenues. There will be some currency fluctuations in here.
What i also suspect we are seeing is CCP monetising the player base better with all its Plex / Omega deals we have seen since 2023. If this is the case we should expect ongoing Plex, Omega, MCT deals firstly in the real money store and then in the Ingame Store (CCP needs to incentivise the player base to buy the Plex from those that paid real money for the stuff).
And the progress is well seen in the rolling 12 month revenue chart which will be a chart the management in Pearl Abyss South Korea will like to see.
We have now had 6 quarters of revenue growth.
Crimson Desert
This is what it is all about and Pearl Abyss needs this to happen. If this fails then Pearl Abyss would seriously need to rethink their company structure and it is in this situation that i suspect a buyer for CCP could be sought
Crimson Desert launch was confirmed for Q4 2025 and investors are now putting that towards the end of Q4.
Pearl Abyss has a troubled history of delays of this launch (delayed six times since 2018), so i suspect investors are not giving much benefit of the doubt anymore.
So what do investors think?
The net effect of all this is for investors to expect lower revenues and profits in 2025 than expected but higher than expected in 2026.
Eve Online and Black Dessert are expected to do better than thought but the cut in the 2025 Crimson Desert revenues more than cancels that out.
And looking into 2025, 2026 and 2027 investors are expecting Eve Online revenues to continue to grow.
. . . . . but the share rose 4% on the day and have risen 35% this year. I greatly suspect the year to date performance is because they do not have a tariff headwind. But they are down 70% on the pandemic induced hype of 2021. And flat on where they were at the end of 2019.
What was said about Eve Online?
Nothing on numbers but more emphasis on Eve Frontier.
Mentioned the Revenant Expansion Pack and "strengthened our game strategy and gained [ph] the immersive-ness to users" . . . . . not sure what that means.
Also aiming for two expansion packs each year.
Also mentioned the Legion expansion pack / freelance system.
And Eve Frontier?
Refered to it as "Blockcain-based" Eve Frontier.
"Blockchain-based EVE Frontier provided 10 days of free play, and we added new content, and held in-game events, and continuously upgraded the game."
And that marketing for Eve Frontier will be increased.
Full Earnings Call Transcript in English
Q1 2025 Earnings Call
Company Participants
Heo Jin-young, Chief Executive Officer
Jo Mi-yeong, Chief Financial Officer
Kim Kyung-man, Chief Business Officer
Other Participants
Various analyts
Greetings. I am Jo Mi-yeong. Thank you once again for taking part in our company's earnings conference call despite your busy schedules.
I would like to cover 2025 Q1 major financial highlights and performance.
Black Desert and EVE provided stable live service in Q1 as well, through strengthening content and continued consistent performance. Black Desert in Q1 added the new dream horse, Voltarion, that uses lightning; as well as Orzekea, which is the last story of co-operative dungeon,
Atoraxxion. Atoraxxion content following the first update with the field hunting ground and main quest added a 5% cooperative conquest content to add to the fun.
For console, while carrying out steady updates, including season server and dream horse, we stepped up efforts to prepare for PlayStation 5 and Xbox X and S versions. For mobile, we consecutively updated Nightmare: Tshira, and Serene forest, and provided the fun of PvP and monster hunting at the same time.
For EVE Online, we had additional updates to Revenant Expansion Pack and strengthened our game strategy and gained [ph] the immersive-ness to users. In addition, we revealed our 2025 roadmap and shared that we have been preparing for two expansion packs a year and the Alliance Tournament.
Apart from this, we were thorough in preparing for new services to expand revenues. First, Crimson Desert participated in GDC in March, and based on Crimson Desert assets, we demonstrated the BlackSpace Engine. In the Crimson Desert open world, we provided demos, which allowed you to directly experience interaction with nature and physics' effects, which also heightened expectations to another level.
In addition, in the three Benelux countries and in London, we held a hands-on demo for media and creators. We had continued positive responses by the media to our excellent graphics, indepth battles, open world views, and physics' effects, and we continued our successful demonstration. Blockchain-based EVE Frontier provided 10 days of free play, and we added new content, and held in-game events, and continuously upgraded the game.
Next, I would like to cover 2025 Q1 performance. Q1 operating revenue posted KRW83.7 billion and went down 12.5% Q-o-Q. This was caused by the removal of 2024 Q4 Pearl Abyss Capital's additional revenues as well as Black Desert Mobile China-related revenues. Operating losses posted KRW5.2 billion and turned to a deficit with increase in CCP Games' new title development costs. And net profit posted KRW500 million. And with reduction of gains on valuation of fair value financial assets and foreign exchange-related gains in Q4 of 2024, it went down 98.9% Q-o-Q.
I would like to walk you through more details related to operating revenue.
The operating revenue from this quarter's games posted KRW83.5 billion and decreased 8.3% Qo-Q. Looking at the operating revenue breakdown for different regions, it was 20% for Korea, 22% for Asia, and North America and Europe reported 58%.
Next, I would like to cover operating expenses. Q1 operating expenses posted KRW88.9 billion, a 4.8% decrease Q-o-Q. For labor, it posted KRW49 billion, a 4.5% increase Q-o-Q. For your reference, headcount at the end of Q1 recorded 1,336 and 761 are in the developer category, which is 57% of the total headcount. Commissions posted KRW17.3 billion, a 6.1% decrease Q-o-Q, and advertising posted KRW7.3 billion, a 38.1% decrease Q-o-Q.
Lastly, I will cover 2025 Q2 major highlights.
Black Desert in April added a new difficulty level in the Land of Morning Light's Donghae Golden Pig King Boss. As this is a challenging difficulty content update, a variety of rewards were provided upon successful conquest, and we provided an environment where the users could immerse themselves more in the game.
Apart from this, we plan to continuously improve live content and node war and siege war to continue stable and consistent service. In addition, in June, through Heidel Ball, we plan to communicate second half major updates and provide more to enjoy and strengthen more communication with our users.
For Black Desert Console, we plan to launch PlayStation 5 and Xbox X and S versions on June 26 and provide a better experience to users. We will provide diverse contents, that we could not until now, due to the limitations of devices and provide more fun through the game. In the case of Mobile, we updated the Rabam skill in April, which could enable stronger attacks, and we have plans to launch Atoraxxion: Vahmalkea, where five party members could play together.
For EVE, we are planning to launch the new expansion pack, Legion, that implemented the freelance system. Until now, you needed to join certain groups to enable contracts between users, including for transport work delegation and related supplies, but when Legion is updated, users can enjoy free economic activity regardless of whether they belong in their group.
In addition, during the EVE Fanfest that was held in the first week of May, we disclosed our second half update, including our map revamp and strengthened communication with users.
We are also smoothly carrying out preparations for our new titles to secure new growth engines. First, we are continuously implementing tests for EVE Frontier and plan to strengthen marketing. We thoroughly will test and validate so that we can offer high-quality new content.
For Crimson Desert, before its launching in Q4 of this year, we plan to heighten marketing intensity. Last week, we participated in PAX East held in Boston, in the U.S., and successfully concluded the first Crimson Desert B2C demonstration in North America. We plan to participate in a global game event in June and plan to show a new demo built for Crimson Desert for the media.
Crimson Desert is carrying out full-scale marketing from Q2. Until last year, through notable events, including Gamescom and TGA, we focused on sharing game development progress. But from now on, we are carrying out marketing that can lead to real game performance by meeting more users, media and creators each month. In addition, apart from the boss wars that we have been sharing with you so far, we will consecutively showcase our open world and stories that you are very curious about.
As many of you have been waiting for so long, in order to achieve the performance that can repay you for your patience, everyone here at Pearl Abyss will do our best until the very end. We will be looking forward to more of your interest and support. Thank you very much.
Questions And Answers
It seems that we do not have any questions in the queue now. So, I believe that it's good time for us to give you a progress update on Crimson Desert. And I would like to tell you that for Crimson Desert, while implementing our QA process, we are in the last stages of preparing for launching, including having our voiceover work and preparing for console certification as well.
In the case of marketing, we plan to participate in more and more diverse game events this year. And in Q1, we had a demo event in Benelux three countries and in London, with core media and influencers, and we also participated in the GDC as well. And in last week, we participated in PAX East and continued our aggressive marketing action.
(Foreign Language) Through this, we have been sharing our game to our global users who have actually come in contact with our game for the first time, and we have been receiving very positive feedback. And through this, we have been increasing the name recognition of Crimson Desert, and we have been heightening expectations.
Also, at a global game event that will be held in June, we plan to have, for the media, not just sharing with you our boss war, but a demo with our new build. Also, in the process of our marketing, we plan to consecutively share with you new content, including our open world and stories to heighten the effect of marketing.
Everyone here at Pearl Abyss is doing our utmost for the successful launching of Crimson Desert.
So, I hope that all of our shareholders, investors and everyone has continued interest and support for the game development.
Q - Ji-eun Lee
Thank you for the opportunity. I think until the last quarter, you have been sharing with us your Black Desert Mobile and PC revenue breakdown. But I think that for this quarter, this was not included in your presentation. So, can you share the breakdown with us?
A - Kim Kyung-man
Well, regarding the contribution of the revenues for Black Desert and IP, it is at a similar level for each quarter. In addition, in regard to your question about our platform revenue contribution, although we do have slight differences for each quarter according to content updates, it generally shows a similar trend to the past.
Q - Junhyun Kim
Thank you for the opportunity. Thank you for sharing with us updates related to Crimson Desert. And I am wondering if you can share with us in numbers about any performance or results that you gained from your marketing efforts for Crimson Desert, will that be possible?
A - Heo Jin-young
Thank you very much for your question. And I think I will need to apologize that although we are meeting diverse users in different regions directly, and we are receiving feedbacks and getting many reviews, and feeling first-hand the responses, the warm responses that they are showing to the game, and we are also seeing a lot of the articles by the media regarding our game, I think it will not be possible for you -- us to give you in numbers or metrics about the performance of our marketing.
However, we can tell you that we are keeping a very, very close eye on the different responses by influencers, for example, video feedback, or the feedback by different users, and we are feeling first-hand that the expectations of the market and the users is heightening. So, although I cannot answer your question in numbers, I hope you can understand that we are getting the responses first-hand and feeling them.
Q - Jihyun Kim
Thank you for the opportunity. And I have a question about whether you are applying any of the diverse feedback that you said you are getting from global users through your marketing, so are you applying any of that feedback to the game? And we know that you've shared with us at G-STAR the boss wars, but after you had that revealed to us, can you tell us if any development direction has changed or has been revised with the feedback? Thank you.
A - Heo Jin-young
So, it seems that until now, when we see the current situation, we mentioned that we participated in the North America PAX East. So, we were successful in our first B2C demo in North America. And it seems that we have almost ended the tour when we were able to showcase the different demos through our boss wars.
So, at these events, we had the demo booth where users can experience first-hand the boss wars of Crimson Desert, and through diverse events, we actually, were one of the companies that participated in PAX East that received the most amount of attention. So, we could find out first-hand the positive responses we got to Crimson Desert graphics and our combat system.
However, we are aware that some of the users who experienced Crimson Desert for the first time gave some feedback that it was a little more challenging to play, and we also are aware that we have been getting some feedback about the optimization for console control. So, we have been getting these -- feedback with our boss war demos, and we have been making improvements based on this -- these pieces of feedback. And with the demos of the boss wars, we have been getting more increased positive feedback about the unique and dynamic combat system that is very special to Crimson Desert.
So, we will do our best to enhance our strength, but we will do our best to also incorporate these -- feedback, so that we can have more development in the right direction and do our best until the launching in optimization, so that everyone can enjoy our console play with more convenience and fun.
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