PearlAbyss Corp (XKRX:263750) Q2 2025 Earnings Call Highlights: Navigating Losses and Strategic ...

Operating Revenue: KRW79.6 billion, a 4.9% decrease QoQ. Operating Loss: KRW11.8 billion. Net Loss: KRW22.7 billion, impacted by foreign currency-related losses. Black Desert IP Revenue: KRW54.9 billion, a 12.9% decrease QoQ. EVE IP Revenue: KRW24.2 billion, an 18% increase QoQ. Regional Revenue Breakdown: Korea 18%, Asia 18%, NA Europe 64%. Platform Revenue Breakdown: PC 85%, Mobile 12%, Console 3%. Operating Expenses: KRW91.3 billion, a 2.7% increase QoQ. Labor Cost: KRW47.2 billion, a 3.8% decrease QoQ. Commissions: KRW18.1 billion, a 4.5% increase QoQ. Advertising Costs: KRW10.5 billion, a 43.9% increase due to offline events and game show participation. Headcount: 1,360 total, with 772 in the development department (57%).

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Release Date: August 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Black Desert and EVE Online showed stable live service performance in Q2, with significant user engagement through events like Heidel Ball and EVE Fanfest. The launch of PlayStation 5 and Xbox X and S versions for Black Desert provided a stable playing environment and potential for a rebound in console gaming. EVE Online's Legion expansion pack and diverse in-game events led to the best performance since Q4 of 2016. Crimson Desert's participation in major gaming events like PAX East and Summer Game Fest strengthened marketing efforts, receiving positive feedback for its action, graphics, and presentation. The company is preparing new services and updates, such as the new class Wukong and naval PvP content for Black Desert, which are expected to boost Q3 performance.

Negative Points

Q2 operating revenue decreased by 4.9% QoQ, with a net loss of KRW22.7 billion due to foreign currency-related losses. Black Desert's revenue was weak in Q2 due to the absence of large-scale updates. The removal of the China contract effect negatively impacted mobile revenues. Crimson Desert's launch has been delayed by one quarter to Q1 2026, raising concerns about the company's ability to meet timelines. Increased marketing costs, including offline events and game show participation, contributed to a 43.9% rise in advertising expenses.

Q & A Highlights

Q: Can we trust that Crimson Desert will launch in Q1 of 2026, given previous delays? A: CEO Jin-young Heo acknowledged the delays and apologized for not meeting the Q4 launch schedule. He emphasized that the delay was a strategic decision to ensure a successful launch. The company is committed to managing the schedule strictly to avoid further delays beyond Q1 of 2026.

Story Continues

Q: What were the reasons for the delay in launching Crimson Desert? A: CEO Jin-young Heo explained that the delay was due to longer-than-expected timelines for voice-overs, console certification, and coordination with partners for offline distribution. These factors made it impossible to find an optimal launch timing within the current year.

Q: How did the financial performance of Pearl Abyss fare in Q2 2025? A: CFO Mi Yeong Cho reported that Q2 operating revenue was KRW79.6 billion, a 4.9% decrease QoQ. The company posted an operating loss of KRW11.8 billion and a net loss of KRW22.7 billion, primarily due to decreased operating revenue and increased marketing costs.

Q: What are the future plans for Black Desert and EVE Online? A: CFO Mi Yeong Cho mentioned that Black Desert plans to launch new content, including the Wukong class and naval PvP content, Blue Battlefield. For EVE Online, the company plans additional updates to the Legion expansion pack and will hold the annual Alliance Tournament.

Q: How is Pearl Abyss preparing for new services to increase revenue? A: CFO Mi Yeong Cho stated that the company is preparing new services like Crimson Desert, which participated in major gaming events to strengthen marketing. Additionally, EVE Frontier is undergoing continuous testing and upgrades, with plans to grow its community and secure core users.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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