NC Corporation (A036570) Earnings Call Transcript & Summary

[Interpreted] Good morning. This is Jason Lee, Head of IR at Ncsoft. I would first like to thank everyone for taking the time to participate on this earnings conference call for the first quarter of 2021. Let me begin my presentation with the first quarter earnings highlights. First quarter sales totaled KRW 512.5 billion, representing a decrease of around 30% versus the first quarter of last year when Lineage 2M was included in full for the first time. It is also lower by 9% compared to the previous quarter, during which the large-scale updates of Lineage M and Lineage 2M created a high base. Operating profit posted KRW 56.7 billion, a decline of 64% quarter-on-quarter and 77% Y-o-Y due to the change in the top line and an increase in the operating expenses such as labor cost and marketing. Pretax income was KRW 92.8 billion, a drop of 22% Q-o-Q and 64% Y-o-Y. And net income was KRW 80.2 billion, similar to the previous quarter. Next, let me go over the sales of each game. Lineage M sales was KRW 172.6 billion, a decrease of 18% quarter-over-quarter. There was a natural decline in sales versus the high third and fourth quarter of last year, but traffic indicators such as DAU and PCU are still robust. Going forward, we expect top line trends to remain stable with the fourth anniversary update at the end of the second quarter or early third quarter to generate key sales momentum. Lineage 2M posted KRW 152.2 billion, lower by 9% quarter-over-quarter. Sales decreased due to the high base created by the first anniversary update in November last year. However, the user base that was generated from the update is still solid today. The Chronicle 5 update in April was also positive, which leads to expectations for steady sales trends during the second quarter. On March 24, Lineage 2M was launched in both Japan and Taiwan. And in Taiwan, the title hit the top of the charts on both app stores. In addition, we plan to take the title to other regions outside of Japan and Taiwan within the year. The sales of the 5 PC online games combined was KRW 129 billion, up by 6% Q-o-Q and 14% Y-o-Y, representing the highest per quarter sales since 2018. Lineage I sales was KRW 48.9 billion, an increase of 5% Q-o-Q and 9% Y-o-Y. We expect the game to continue stable performance in 2021 again based on its highly loyal customer base. Lineage 2 sales was KRW 26.2 billion, up by 1% Q-o-Q but down 1% Y-o-Y. From the second half of 2019, Lineage 2 has recorded a very consistent top line performance quarter-after-quarter. This year again we believe that momentum will continue on the back of new competitive contents such as the world siege warfare. AION recorded KRW 23.4 billion, a jump of 24% quarter-over-quarter and 131% year-over-year. The results of the Classic server launch last quarter was recognized in full, leading to significant growth in both user traffic and sales. Back in 2019, Lineage 2 went through an evolution and was able to achieve a near 50% Y-o-Y sales increase. This year, we expect AION to follow suit and generate a similar record. Guild Wars 2 sales was KRW 16.3 billion, up by 15% Q-o-Q and 30% Y-o-Y due to fresh content and in-game item promotions. On July 27, we will be announcing the details about the new expansion pack and the preregistration event schedule. Blade & Soul ended at KRW 14.1 billion, a decrease of 10% Q-o-Q and 28% Y-o-Y. And lastly, royalty totaled KRW 45.5 billion, an increase of 3% Q-o-Q but down 14% Y-o-Y. Next, let me talk about expenses. The first quarter operating expenses totaled KRW 455.8 billion, an increase of 13% versus the fourth quarter. To walk through some of the line items, labor cost was KRW 232.5 billion, up by 26% Q-o-Q because of an increase in headcount, regular incentives paid to all employees and special bonuses paid. In the second quarter, labor costs will decrease on a Q-o-Q basis as the first quarter one-off items will not exist. For the full year, labor cost will be higher than that of last year because of factors, including the salary increase for all employees. But we believe this increase will be more than offset by growth in the top line, thanks to new game launches. Moreover, we also believe securing the best talent is critical for our long-term growth. Marketing was KRW 55 billion, up by 23% Q-o-Q due to advertising for new game launches. And variable costs and other expenses totaled KRW 147.3 billion, a decrease of 7% Q-o-Q. This ends my presentation on the first quarter performance. In the second quarter, we are planning a strong line of new game launches. On April 6, Pro Baseball H3 was launched, and Trickster M is scheduled to open on May 20. Blade & Soul 2 is currently hosting an event to generate preregistration characters. When comparing Blade & Soul 2 to Lineage 2M when it was at the same phase, more characters have been created. Blade & Soul 2 is also aiming for a second quarter launch. As mentioned before, we launched Lineage 2M simultaneously in Japan and Taiwan in the first quarter. With this at the beginning, the company is planning to become more active in releasing games on the global stage. Leveraging the experience gained through launching Lineage M and Lineage 2M overseas, we are committed to achieving more meaningful performance in the global market with the titles to be launched in the future. TL, which will be launched both on PC and the next-generation console platform, is also planning another large-scale in-house test during the second half of this year. In addition, multiple console games are also under development, and we are excited to explore new opportunities on new platforms over the long term. Based on our core IPs and strong MMORPG development and service capabilities, all employees are focused and committed to become a stronger competitor in the global game market. We will do our best to ensure we can come back with positive results on a variety of new game launches, overseas expansion and platform expansion. We look forward to your continuous interest and support. Thank you.

[Foreign Language] The first question will be presented by Eric Cha from Goldman Sachs.

[Interpreted] Thank you for the opportunity to ask questions. With regards to Blade & Soul 2, because Trickster M in terms of the launch date has been finalized, I think that a lot of the attention now is focused on Blade & Soul 2 and the schedule going forward. So during your presentation, you mentioned that for the launch schedule, it still would be -- and you're still targeting for the first half of this year. And in addition to that, you did talk about the character creation that is taking place in the preregistration process. However, with regards to the game performance going forward, will there be other reference data that you would be able to provide to us in addition to the character creation that is taking place right now so that we would be able to estimate what the game would put -- what level of the game would perform at after it's launched? And in addition to that, if we were to look at Blade & Soul's overall top line expectations, how much is the company currently expecting in terms of the overall sales size? And why would that be the expectations that the company has? The second question that I would like to ask is that during your presentation, you also mentioned that in addition to TL, the company is also developing a multiple suite of console games. I do believe it may be too early to be talking about the launch schedule. However, is there any more detail that you would be able to provide, whether it would be with the pipeline going forward or maybe when you would be in a place in which you will be able to share more and unveil more about these games?

[Interpreted] So thank you for your question. I believe the first question you asked would be about the Blade & Soul overall schedule that we have and also whether there would be any measurable data that we would be able to share with you. If we actually look at the overall progress of Blade & Soul right now and compare it to the progress that we have experienced with the launch of Lineage 2M, in actuality, Blade & Soul 2 is performing at a much stronger level. In addition to that, if we talk about measurable data, I'm not sure if this is the data that you're looking for. But for Blade & Soul 2, I think that we had mentioned before that for the overall target audience that we're looking in terms of the user base, we're actually looking for a much wider user base in terms of the age group. So we're trying to lower the potential target audience to a much younger level. And if we look at what has actually happened in terms of the user generation, I do believe it is very clear that we have been successful in gathering the attention that we have been aiming. In addition to that, there are some very interesting findings that we see. So as mentioned, for the target overall base that we are looking at with Blade & Soul 2, it's very broad. So for example, one of the questions you may have is that for the players that are playing right now, for example, the Lineage legacy games, are they interested in Blade & Soul 2? Interestingly enough, the answer to that is, yes, we actually see a lot of interest coming from that user base. So if we look at our past experience with the PC-based Blade & Soul and when we launched that and in the overall operation of that game, in actuality, the main customer base were people who were in their 20s and 30s. So when we were creating Blade & Soul 2, the expectations were that we would be appeal -- we would appeal to the same type of user base. And that is the overall view that we had when we went into the preregistration process. However, in actuality, what we find is that there is a significant base of customers who are in their 40s and 50s who have been attracted to this game. So this actually links to the second part of your question in which you asked about our expectations in terms of overall sales. In the beginning, as mentioned before, because we were targeting a younger user base, we looked at the overall user base target and also their ability to pay. And we also thought that there would be some differences versus, for example, the Lineage games that we had in terms of the overall performance. However, what we actually see in terms of what is happening right now is that in terms of the overall top line sales, I guess, when you model this, you are looking at what type of discount you need to apply to Lineage 2M. But as the current situation evolves, what we see in the preregistration process gives us more confidence that this will be a strong game. And to move on to the second question that you asked, I think that it would be -- for the console games, I think that what we first need to decide would be the overall schedule for TL. That is the priority that the company has. And then if we look at the other console game lineups, in actuality, for the next-generation PlayStations and Xboxs to get out into the market and actually be -- and penetrate the market, we do believe that around 2 to 3 years will take place. The overall strategy that we have for our console-based games would be that we're first looking for the penetration of the actual consoles to take place. We need them out into the homes. And then thereafter, we would actually start servicing the games that we have off of those consoles. So as a result of that, in terms of timing, I don't think it's something that we would be able to share in the very near term. It's more of a bit later in terms of the projected schedule that we would see. And it would not be a situation in which we will be able to share the details now. However, one thing that I can say is that the overall strategy that we have for our console-based games is to not apply the same logic that we have for the MMORPGs and just take it to console. We actually are trying to go through an overall evolution in a wide variety of manners, so for example, whether it be the overall business model that we have for these games or whether it be in terms of the overall game design. So again, we would first go with TL, finalize the schedule there, finalize our plans. And then I do believe at a later time, we will have an opportunity to share more details about the other console-based games that are in our pipeline. So we would like to wait for your patience -- we would like to ask for your patience on this issue.

[Foreign Language] The next question will be presented by Jae-min Ahn from NH Investment & Securities.

[Interpreted] I would like to ask questions about Lineage M. In terms of the overall top line decrease that we saw in this quarter, I do think that it was more than our expectations. So if we take off, how much would one-off impact be from the various, several rollout issues that you have seen and also the refund related to that? So if we were to take that out, what would be the overall level? And in addition to that, you also talked about the fourth anniversary update. What would be the expectations there? And also what revenue trends are you looking for?

[Interpreted] So thank you for your question. If we look at Lineage M, this is a game that it's in its fifth year. So as a result of that, as we see in terms of our long-standing other games also, the performance on a quarter-to-quarter basis does have its up and down. In the first quarter, during the quarter, there were some noise related to the overall issue that you mentioned before. And when such a situation takes place, of course, at the company level, we try to confirm and look at the overall metrics that we have or the various indicators related to the game to see what type of impact that type of attention actually garners. And then if needed, accordingly, we would take action to try to soften some of that impact. However, to be very frank, if we look at the traffic numbers, whether it be from a DAU perspective or a PCU perspective, in actuality, there was not really a dent made by the overall situation. Across the board, we actually see very strong performance in traffic numbers taking place. And I believe in terms of the basic stance that we have in trying to provide the best experience and also the best game play possible has not changed. So for any game and for the past 2 decades, I do think that there are some times in which we might slightly miss expectations or that some things -- or that there are some mishaps that take place. But at the end of the day, everything usually works out. The experience that we provide and the know-how that we gain through such situations increases, and that leads to overall better performance. So you also asked about what our expectations in terms of the sales going forward would be. And I think that with the level of confidence, we can say that, as we have seen with past updates, whether it be the third anniversary or the second anniversary, you probably are aware that for the monetization intensity we tend to adjust it accordingly. And as we have done in the past, this time again, it would not be any different. So if we had not seen very strong revenue or traffic numbers, I think that we would be less confident about the performance going forward. But overall, as of today, I think that we see that we're in a comfortable position. So for the fourth anniversary update that will be coming at the end of the second quarter or early third quarter. I think that as we continue to drive the performance, that we would ask you to wait and see, and I don't believe that there should be a lot of concern.

[Foreign Language] The next question will be presented by Dong Hwan Oh from Samsung Securities.

[Interpreted] I would like to ask about some of your operating expenses. The first question that I would like to ask is with regards to the first quarter labor cost. If we look at the one-off portion of the labor cost increase that we saw in the first quarter, how much would that be? So how much would that be present in the second quarter? And if we look at the labor cost for the full year on a Y-o-Y basis, how much would the increase be versus last year? The second question I would like to ask is about your marketing spend. With the Blade & Soul 2 launch slated for the second quarter, you probably do have a marketing budget that you have slated for that launch. How much would that represent?

[Interpreted] So since you have been covering the company for a very long time, I probably -- you probably are aware that with regards to the overall head count that we have at the HQ level, it is around four-thousand-something-hundred in total. So -- and in addition to that, there has been news articles about the special incentives that have been paid at a level of around KRW 8 million per person. So if you do a reverse calculation, I do believe you can come up with the overall one-off amount that we recognized in the first quarter. If we look at the labor costs for the full year, I think that you understand that not only within the game industry as a whole, but if we look at the overall industry, there are a lot of transformations and disruptions that are taking place. And as a result of that, we do find it very difficult to source the talent that we want in terms of IT capabilities. So this is a full company effort that we are making. And in addition to that, at the company level, we have tried to compensate and provide a compensation scheme that is at the highest level of the industry as a whole. So as a result, it is true that this year's overall labor cost will be higher than that of last year. If we look at what would be the drivers behind that, of course, it would be the salary increase in itself and also any headcount increases that we would have during the year. If we look at past precedents, when the salary increase was at a low level, it was at around 10%. And also for the headcount increase, we saw another 10%. So we think that for this year in comparison to that, it probably will be a bit higher. It would be difficult to actually specify the amount on a per quarter basis, but I do believe it will represent a double-digit type of growth. However, that have been said, as we have mentioned before, we do believe that this overall labor cost increase is something that we can more than offset by the overall top line growth that we will be seeing by the new game launches. And to move on to the second question, which would be about our marketing, since the overall incorporation of our company, if we look at the per quarter marketing spend in actuality, the first quarter of this year represents an all-time high. The reason for that is because we actually had a lot of concentration of new product launches that took place at once during a very short period of time during the quarter, which led to a significant marketing budget. And this is unprecedented or almost never seen within the company's history. So we had the launches in Japan and Taiwan. And we also had Trickster M and also some marketing related to Blade & Soul 2 that took place all within the first quarter. So as a result of that, the overall marketing spend for the quarter hit a high level. If we look at the second quarter, of course, there will not be any marketing related to Japan or Taiwan. And with regards to the other games, there may be some residual marketing taking place, but it will be at a much lower level. So as a result, we do believe that the second quarter marketing budget will be lower than that of the first quarter. In addition, if we look at the full year marketing expectation, one thing that we have always been -- in terms of marketing, one thing that we have always been able to achieve is that, within the game industry, if we look at our marketing budget as a percentage of revenue, we have always been at the lowest level. And I think that 5% of sales, 6% of sales, which has been the general rule of thumb to -- up until now, will not really change if we look at the end of the year for this year.

[Foreign Language] The next question will be presented by Jong Hwa Sung from eBest Investment Securities.

[Interpreted] I would like to ask you 2 questions, one about your cost and another about the pipeline going forward. First, if we look at the overall labor cost, if I ask you a bit more follow-up and more specific details about the question before. For the special incentives or bonuses paid, I think that you said that we should take the headcount of approximately 4,000 people and multiply that by around KRW 8 million per person, which would take us to a -- maybe around mid KRW 30-something billion level in total amount. However, I do believe that in the fourth quarter of last year, you preemptively paid out some incentives to company employees. So if that is the situation and if we compare the amount paid in the fourth quarter of last year versus the first quarter of this year, would the first quarter this year be a larger amount? And what approximately would that be? The second question that I would like to ask you is about the Blade & Soul 2 schedule going forward. I think that versus the overall market consensus, that there has been some adjustment in the time line. So accordingly, if we look at AION 2 and the launch in Korea going forward, because you do want to space out your new game launches, would this be something that actually would be taking place by the end of the year? Or do you think that there could be some changes for the launch schedule of AION 2?

[Interpreted] Maybe to address your first question about the labor cost very simply, if you look at the Q-o-Q increase, it was around KRW 48 billion. And as mentioned before, if we actually multiply the headcount versus the amount paid per person, then you do come at around KRW 30-something billion. So I think that the remaining portion is what you should see as the increase versus what we have had for last year. And in terms of the beginning of the year incentive, this is something that we have always paid on a regular basis at the beginning of the year. For the second quarter, again, we won't have these one-off impacts. So on a Y-o-Y basis, for the second quarter, there will be an increase due to the headcount increase. And there would be some increase reflected because of the overall salary increase that we have had. But I think that on an overall amount level, it will be at a more stable level or lower level than first quarter. When we talked about a double-digit increase for the growth of labor cost, what I was referring to was when we looked at the labor cost on a full year basis and compare that to on a Y-o-Y basis to the labor cost of last year. However, if we look at it on a per quarter basis, from the second quarter to the third quarter to the fourth quarter, I actually believe that, as mentioned, you will see more stability in the overall trend. So for the short term, on a per quarter basis, again, we should see the overall level stabilizing. And to go on to the second question, if we look at the schedules for Trickster M and Blade & Soul 2, it is true that versus the initial overall expectations, there were some pushbacks in launch schedule. And I believe that whenever we see a delay or a pushback, there can be multiple reasons behind why that is taking place. If we look at the recent situation, the fact that we, for the past half year or so, have been working from home is something that we cannot ignore in terms of the overall situation. So for example, in terms of the overall working environment, of course, we are trying to create an environment that will be equal to productivity that we see within the office. However, in itself, if we look at game development, the final stages, when we put on the finishing touches and make the efforts to polish the game at the very last stage, is actually the most intense. And that in itself can actually drive the success or the failure of a game. So if we look at the QA levels and standards that we need to pass in order to actually officially launch a game, it's at a very high level. And since we have been working from home for the past 6 months, I do believe that, that has had an overall impact on the level of concentration that we can be -- that we have been able to achieve in this last polishing stage. So as a result of that, we have seen a delay in the Trickster M and Blade & Soul 2 schedule. Right now, not only for these games, but we do have other games that right -- are in the pipeline and that we are looking at to launch into the market. For AION 2, I think that as of the current time, we would not be able to give you full confidence that we would be able to launch the game before December 31 of this year. I think that, to be very frank about that, we're not sure how the situation going forward would evolve in terms of our work-at-home environment. So as a result, I think we do want to take a bit more leeway with the schedule that we are providing. However, that has been said, we do have a very robust pipeline of projects that are taking place at right now. So not only for AION 2 but for all of these other projects, once the time is right and once we're actually closer to the actual launching, I do think that, that we will have a lot of new and exciting news to share with you. So I hope we can look forward to your patience on these issues.

[Foreign Language] The next question will be presented by Jingu Kim from KTB Investment & Securities.

[Interpreted] There are 2 questions that I would like to ask you. First is about your new titles that are coming, in terms of the global launches or global expansion. What would be the strategy there? The second question that I would like to ask you is specifically about each of your games. If we look at Blade & Soul 2 and the servers that you're planning to open, for each server, how much capacity would each server represent? And in terms of L2M in Japan and also in Taiwan, what would be the overall revenue numbers that we see there? And what is your plan to sustain the top line performance in these markets? For AION 2, if we look at the overall game play and characteristics versus that of existing games, what would be the points of differentiation that we can look forward to?

[Interpreted] So the first question that you asked was about our overseas launch strategy and how we are planning to expand going forward. If we look at our past track record from Lineage I to Lineage 2, Blade & Soul and AION and the overall MMORPG evolution that we have been going through, we have been trying to gradually increase the overall user base that we see and also to diversify it. And I think that we have been able to do that because if you look at the Lineage IP games and also Blade & Soul, you can recognize that these are very different games. So this was a point of differentiation that we had provided. However, For MMORPG, because we started in Korea, we did specifically developed for the Korean user base and also, to me, the overall level of characteristics that the Korean customers had represented. Now if we look at our global MMORPG strategy, the user base and also the broader group and audience that we're trying to cater to, we actually believe that the needs of this audience and the play patterns is more detailed. And we see a wider variety of segmentations that we need to address to be able to cater to this market. So as a result of that, what we're trying to do now is not just to take what we have done in Korea in terms of the version of the game, translate that, maybe change the language and then launch it into the global market. But we're actually trying to change the game in itself so that it has a stronger appeal and stronger attractiveness for this global user base, whether it be in terms of the overall business model or whether it be in terms of how it appeals to this customer base. We are trying to be more specific to that market and to the type of user that we're looking for. So I think that this is very different from the past because we're not just simply take what we did in Korea, change the language and take it overseas and trying to force it upon the users there, but we're trying to make sure that it actually appeals, has an attractiveness and can be more specifically catered to the market that we're looking to try to make inroads in. So for that, I do believe that we are looking at a much wider group of audience for MMORPG in general. And I think that there will be an opportunity for us to share more details about what we're trying to do in the development of this at a later time. So again, I think that when the time is right, we will have more information to share with you. So I think that for the question that you asked about the per capacity per server, this is something that actually from the development phase for the developers when they're looking at each of the servers, they can determine according to their own parameters how much capacity they're going to put on each of the servers. So it could be 3,000. It could be 5,000. It could be 10,000, accordingly. And this is something that I myself was not aware about. But I think that a lot of people put a lot of significance on the number of servers that are available. For example, in the past 3 pad games, that had like 62. Others have had 120. But I think that the absolute numbers of servers is not something that would be that meaningful because, again, the actual capacity per server can be different within a very wide range. One thing that is factual and one thing we do think that we need to emphasize once again would be that if we look at the absolute total number of characters that have been created in the preregistration process, comparing the same period of Lineage 2M versus that of Blade & Soul 2, it is true that Blade & Soul 2 is right now outperforming what we have seen with Lineage 2M. So I think that, that should be more of the focus rather than the number of servers. And then to talk about the performance that we have been able to generate in Taiwan and also Japan. So if you look at the data on a Q-o-Q basis, you can see that in Taiwan, there has been an increase of KRW 5.6 billion; in Japan of KRW 0.8 billion. And taking a note of the fact that the actual launch took place on March 24 and in Taiwan that we're still ranking #2 in or 1 within the market space, this is actually significant progress. In fact, if we look at the other games in Taiwan and Japan and their performance, they've actually, on a Q-o-Q basis, been a bit weak. So in actuality, within a 1-week schedule since the launch, we've actually been able to see growth that would be higher than the actual numbers that you see on an absolute basis on a Q-o-Q basis because, again, we're trying to offset some of the decrease that we've seen in the other games. In addition to that, these games are in the beginning of the life cycle. So as a result, we haven't seen any decline taking place yet. So overall, we do think that the games are performing at the level that we had expected internally. Going into the second quarter and thereafter, we will see an overall natural stabilization taking place. But as we continue to monitor in Taiwan the game ranking #1 or #2 and maintaining that position, I think that we can look forward to meaningful performance going forward. And lastly, on AION 2 and the overall points of differentiation versus the existing games, I think that if we look at the evolution of MMORPG and the development that we have seen, we have taken it to mobile. And then we have tried to take it to a wider overall user base and audience to make it more mainstream. So as a result of that, I do think that we're adding on elements that appeal to a larger user base or player base. And we're adding on elements that were not possible when we were PC-based. This is not true just for AION 2 but for other games also. If we talk about what type of elements have been added, I think that maybe today would not be the right opportunity to go into the specifics. But what I can say is that trying to create a more popular or mainstream MMORPG game that appeals to a wider base is one thing. But doing that while still maintaining the overall financial performance that you would be able to achieve with a hardcore MMORPG game at the same time is taking the overall challenge to another level, and that is what we're aiming for with this game. So that is what the focus of our development is. And I think that for the details of the specifications, the designs and the schedules going forward and what elements we actually believe have been newly added, that is something that I think we'll have another opportunity to share with you.

[Foreign Language] The next question will be presented by Sung Eun Kim from Macquarie Securities.

[Interpreted] The first question that I would like to ask is about Trickster M. I think that the overall market expectations for this game is lower than that of other games. What is the view internally? Even though it's a very casual -- more casual graphics games, if we look at the preregistration, it already has hit 5 million. So could you talk about that? And also, if you could provide a breakdown of that 5 million, that would be something that would be appreciated. And also, if you talk about the monetization intensity that you're looking for, for this game, that is also something that we would like to see. The second question that I would like to ask is about the plans going forward. Once AION 2 is launched next year, I think that for the existing IP base that you've had, you've exhausted the full series. So for your mobile IP strategy going forward, what would be the strategy there?

[Interpreted] For Trickster M, I think that during the conference call, you may have -- during our comments have seen this. And also internally, versus our expectations in actuality, right now at the preregistration stage, we actually have been surprised. So the overall progress to date has exceeded the initial expectations that we have had. And as you are aware, we did hit 5 million in terms of the preregistration numbers. So in addition, if you look at the graphics of this game and the overall feeling that the game is giving and the appeal of the game, it is very different from the existing games that we have launched before. So as a result of that, we do see a very strong presence of more female game players who are in their 20s that have signed up for the game. So as a result, we do think that one of the clear contributions that this game has had is expanding the overall audience in terms of gender and also in terms of the age group that we have been able to appeal to. So I think that, that in itself is something that we, at the company level, believe is a big milestone. And added to that, if -- because that is important for us to take MMORPG more to the mainstream and to more -- and also a wider user base in general. If we're able to get very good performance off of it in addition to that, then I think that, that would be a best case scenario for us. Of course, having a preregistration of 5 million in itself does not guarantee the success of this game. And if you look into the reasons why people -- so many people have signed up, I think that it's very difficult to be very specific about this. But the overall light feeling of the game, the casual feeling of the game in itself is probably something. And added to that, I'm not sure if people are fully aware that large-scale battle is something that would be possible. But I think that once people actually start to experience the game, this is an element that will actually lure more people in and have them more intensely be involved with the game in itself because it will provide an experience that they probably have not been able to have before in these casual types of games. So as a result of that, we do think that, that would be one of the main core appealing parts of the game in itself. For the monetization scheme, this monetization scheme is different from that of Lineage M. We are trying to have a design in which they would be able to maximize their experience of an MMORPG game, but that in itself does not mean that we're looking for the same type of monetization scheme that we would have for a hardcore MMORPG because they would not fit the overall customer. So this is something that we are at the minus 10 right now for the launch. I think that if you can wait a bit more and actually try out the game and also provide feedback, that probably -- that is something that would be the best answer. And to go on to the last question that you asked about our exhausting the IPs that we have, for us internally, I think that for IPs, it's not really something that we think can be exhaustible. Meaning that it's not something that you use once and then you're done with it. But it's something that we are able to depend upon because it actually represents the brand that we have and also the confidence that our users have had within this overall legacy that we have created. So I think, for us, we deem it to be more of a strategic asset that can create a foundation for products that we developed. In the beginning, when we were trying to develop various mobile games, I think that people thought that we would take the PC version and take it to mobile in exactly the same manner. And that would represent that we had used the IP that we have created. That went for Lineage 2. And -- but that's talking about different products. We're not talking about the underlying IP that represents the overall property that we have. For us, it's more a right direction. And added to that, as mentioned before, we do have a lot of development within the pipeline that also would leverage the existing IPs that we have because this, as we have said, represents the brand that we have been able to create. So as we continue to make inroads in expanding the overall user base that we have and increasing the overall broad audience that we're trying to address and, at the same time, increase the overall presence that we have not only in Korea but also by going overseas, we think that there will be a huge amount of potential that we would be able to tap upon for the existing IPs that we have. So rather than looking at this on a product-to-product basis, I think that this is something that you want to take to a more deeper level. And as a result of that, we do think that these IPs represent an opportunity for the next couple of years that we will be able to continue to develop upon because it's not going to be a direct translation of what we already have, but it will be something new. So again, we do hope that going forward, there will be new other opportunities to share more of what we're thinking about, but that would be our general thought. So thank you for your attention today. In addition to that, as mentioned, we do have Trickster M and Blade & Soul coming to the market. We do hope you will have an opportunity to actually try out these games. In addition to that, I think that during the first quarter, there was a lot of questions that were preoccupied by issues that were not related to game launches. We do hope that in the second quarter, we can have more of a focus take place and, as a result of that, more interest garnered for what we have planned going forward. Again, we look forward to hearing back from you. And again, thank you for your participation today.