May 02, 2024

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(NCSoft)

NCSoft, a leading South Korean gaming firm traditionally led by its founder, Kim Taek-jin, as the sole CEO, mapped out its historic shift to a co-CEO structure, introducing Park Byung-moo as co-CEO to streamline operational efficiency and diversify its business portfolio amid significant financial difficulties.

The two co-CEOs explained the dual-leadership strategy during a media briefing broadcast on NCSoft's official YouTube channel on Wednesday. Under the new leadership scheme, Kim will concentrate on bolstering the company's game development and product competitiveness, while Park, an M&A specialist, will focus on streamlining operations and exploring new business opportunities through mergers and acquisitions to counter the firm's financial struggles.

Park started his career as a lawyer at Kim & Chang, one of the top law firms here, and then worked at various investment firms. Before joining NCSoft in December last year, he was chair of VIG Partners, a local private equity firm.

The co-CEO system is designed to clearly delineate responsibilities between game development and overall corporate management, optimizing expertise in both areas to navigate the challenging business landscape effectively, the CEOs said.

"NCSoft is at a critical juncture, grappling with an extremely saturated home market and rising operational costs," said Park.

The company's financial performance has notably declined, with its latest annual earnings report showing a 31 percent drop in annual revenue to 1.8 trillion won and a 75 percent decrease in operating profit to 137.3 billion won last year.

NCSoft founder and CEO Kim Taek-jin (left) and co-CEO designate Park Byung-moo attend an online media conference on Wednesday. (NCSoft)

Under the new leadership, NCSoft is set to renew and reorganize its internal operations with a focus on four strategic areas. Park wants to remove unnecessary overlaps to ensure departments work more cohesively and improve operational efficiency by making processes more transparent and accountable, ensuring that every decision is informed by solid data. He explained that this approach will not only enhance the evaluation of game projects and marketing campaigns but also align with the company's long-term goals of innovation and expansion.

Park emphasized NCSoft's pledge to continuously streamline its cost structure, pointing out the recent closure of its subsidiary, Ntreev, as a step towards boosting profitability.

NCSoft has also formed a task force dedicated to exploring mergers and acquisitions primarily with Korean gaming companies, aiming to widen its gaming portfolio and intellectual property with a keen eye on both creative synergy and financial health to benefit its shareholders.

Regarding the NC Dinos, NCSoft's owned baseball team, Park made it clear that the company has no intention of selling the team, despite profitability concerns. Instead, the company will leverage marketing synergies between the baseball team and NCSoft's gaming products to generate revenue, while also striving to cut costs.

In the meantime, Kim revealed that NCSoft's development teams have been employing Varco Studio, a generative AI tool developed in-house, since last year to streamline game development processes.

“Cutting down development time is crucial for fundamentally improving our bottom line. Along with Park’s lead on streamlining, we're mixing quick, creative projects with big launches to stay both agile and financially healthy,” said Kim.

By Moon Joon-hyun (mjh@heraldcorp.com)
The Korea Herald