Wemade, the South Korean game developer listed on Kosdaq, posted expanding losses for the fourth quarter of the previous year, with both operating and net deficits growing substantially. The company's latest earnings report released on Tuesday revealed the scale of the downturn.
For the fourth quarter of 2023, Wemade recorded a net loss of 189.5 billion won ($142.6 million), up sharply from the 74.4 billion won loss posted in the same quarter of 2022. Operating losses climbed to 70.8 billion won, compared to 28.7 billion won in the prior-year period.
Sales rose 2.8% year-on-year to 118.4 billion won, but that growth wasn't enough to offset the company's mounting costs. Wemade's stock fell 2.25% on Tuesday, closing at 49,950 won.
The sales increase came from the domestic launch of Night Crows and a licensing deal for the MIR franchise. However, rising sales-related expenses and labor costs pushed operating losses higher. Stock investment losses at affiliated companies and declining convertible bond derivative values further widened the net loss.
Night Crows' success in Korea
The web3 MMORPG Night Crows, co-developed with South Korean studio Madngine, is preparing for a global launch after performing well in its home market. The fantasy game uses multi-chain technology to handle its blockchain features.
Following its South Korean debut, Night Crows climbed the charts on Google Play and the Apple App Store, generating over $151 million in in-app purchases within seven months. That performance makes it one of Wemade's key properties.
Web3 integrations
Wemade acknowledged the challenges in a statement to local news agency Yonhap but pointed to strategic moves that drove the sales growth. The company says it remains focused on future opportunities.
Wemade's subsidiary WEMIX recently partnered with Chainlink Labs to integrate Chainlink's Cross-Chain Interoperability Protocol (CCIP) into the Unagi omnichain ecosystem. WEMIX is building out a web3 services ecosystem with the goal of accelerating blockchain adoption.
Token and blockchain
WEMIX launched its native utility token $WEMIX through blockchain subsidiary Wemade Tree in 2020, part of the company's shift from web2 to web3 gaming. The company has since launched its own mainnet and stablecoin.
Wemade will provide more details about its 2023 performance and upcoming plans during its quarterly earnings call on Wednesday in Asia. Industry watchers are waiting to hear how the company plans to address the losses and capitalize on its successful game launches.
