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A Presentation for Prospective Investors

A Presentation for Prospective Investors. November 2005 Neowiz Corporation. Note:

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A Presentation for Prospective Investors

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  1. A Presentation for Prospective Investors November 2005 Neowiz Corporation

  2. Note: The matters discussed in this presentation contain forward-looking statements that involve risks and uncertainties concerning Neowiz’s expected financial performance as well as Neowiz’s strategic and operational plans. Actual results may differ from the results predicted, and reported results should not be considered as an indication of future performance. All information in this presentation is as of October 27, 2005 and Neowiz undertakes no duty to update this information.

  3. Company Profile

  4. Business Portfolios Company Profile Leading online game developer/publisher Operator of the largest online chatting site in Korea In-house Games Game Publishing Online Community In-house Game Development • Attracting 6 million active users • Market Share Expanding (30% +) • Diversifying Game Portfolio MMORPG Card Games Arcade Games Casual Games • NO1. Traffic in Internet Game Rooms • SF concurrent user exceeding 100k • Active acquisition of major titles Game Publishing MMORPG FPS Racing Casual Online Community www.SayClub.com • Largest online chatting service in KR • Selling Avatars • Attracting 9 million monthly visitors Real-time Chatting Forums Interest Groups Avatars

  5. History of Neowiz Company Profile Aim to become a global online game publisher Global Game Publishing OnlineGames ModemISP Card Games Avatars Business Value 1997 ~ 2000 2001 ~ 2003 2004 ~ Present • 2001: Acquired M-Cube Corp • 2002: Web game business launched • 2003: Acquired Ntix Soft Corp • 2003: Launched Online Game portal Pmang.com 1997: Founded by S Nah & B Chang 1998: Modem ISP business 1999: Online Community Service Launched 2000: Avatar business launched 2000: KOSDAQ IPO 2004: MMORPG ‘Yogruting’ beta service launched 2004: Online game ‘Special Force’ launched 2004: $3.5 million Japan licensing contract for Yogurting 2005: Special force became the most popular game in Korean Internet cafes (19% Market share) 2005: Incorporate ThingSoft with ex Nexon CEO +developers 2005: Publish XL Race from ex Lineage team

  6. Solid Financial Performance Company Profile Financial Statement Summary for 2004 Income Statement Balance Sheet Unit: KRW Unit: KRW

  7. Shareholder Structuring Company Profile Shareholder # of Shares % Sung-Kyun Na 1,375,000 18.35% Byung-Kyu Chang 906,497 12.10% Sae-Yeon Choi 779,750 10.41% Foreign Institutions 944,031 12.60% Treasury Stocks 394,338 5.26% 42.28% Others 3,092,694 Total 7,492,310 100.00% (December 31, 2004) Sung Kyun Nah 18.35% Others 42.28% Byung GyuChang 12.10% 10.41% 12.60% 5.26% Sae-Yeon Choi Treasury Stocks Foreign Institution

  8. Now & Beyond Company Profile • Leading Game Company • - Gain No1. Market share in Web board game market. • - Maximize Special Force revenue • - Launch over 10 new casual games - Commercialize XL Race overseas • - Seek new opportunity worldwide • International Commercialization • Games Commercialize • - Special Force Commercialized • - Close beta tests of new games • - XL Race launch • - Yogurting International Contracts with Asia Pacific regions • Domestic Commercialization performance KRW 130bn+ • Broadening Game Portfolios • - ‘Yogurting’ Beta Service in Korea • - Japan Contract USD 3.4 million • - ‘Special Force’ user base expansion • - ‘Psi-Pi’ Development Start • - Web Board Games M/S expansion • Development & Acquisition of killer game titles KRW 90bn KRW 78bn 500 Staffs 450 staffs 450 staffs 2006 2004 2005

  9. Financial Highlights

  10. Growth & Profitability Maintain Min 20% Operating Margin over the past five years, except Y2004Dramatic increase in profitability in Y2003, due to adding new revenue resource Operating Income Trend Revenue Trend 90 (KRW billion) 30 (KRW billion) 81 78 25.1 20 60 42 31 10 30 8.7 7.3 6.8 Y2001 Y2002 Y2001 Y2002 Y2003 Y2004 Y2003 Y2004

  11. Quarterly Revenue & Profits Quarterly Revenue Trend Quarterly Operating Income Trend 27.5 22.5 (KRW billion) (KRW billion) 20.7 19.1 20.4 18.5 17.4 5.1 5.7 1.9 2.6 2.5 0.1 -1.2 1Q04 2Q04 3Q04 2Q05 4Q04 3Q05 1Q05 3Q05 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05

  12. 3Q Revenue Quarterly Revenue Trends (KRM in Bn) 300 27.5 250 Y-Y 58% Q-Q 32% 22.5 20.7 20.4 19.1 200 18.5 17.4 150 100 50 1Q04 2Q04 1Q54 2Q05 3Q05 4Q04 3Q04

  13. 3Q Revenue Comparisons (KRM in Million) 30,000 25,000 20,000 15,000 10,000 27,451 1,328 (KRM in Mn) 20,723 2,926 1,051 17,413 2,000 6,521 Advertising 962 3,423 Avatars 4,610 Publishing Web Boards 16,676 14,249 11,841 3Q 04 3Q 05 2Q 05

  14. 3Q Key Cost Analysis 22,347 18,843 17,264 4,313 3,841 3,512 8,975 8,156 6,808 Others Salary Commission 6,270 3,251 2,570 Marketing Depreciation 2,114 1,867 1,230 2,507 1,481 1,559 3Q 04 3Q 05 2Q 05

  15. Quarterly Sales Breakdown 27.5 27 (KRW billion) 22.5 24 21.5 20.7 21.4 22 20 18 16 14 12 10 20.4 19.1 18.4 18.5 17.4 Others Publishing 8 6 4 2 Advertising Avatars Web Board Game 2Q05 2Q03 3Q03 4Q03 2Q04 3Q04 1Q05 1Q04 4Q04 3Q05

  16. Neowiz Online Gaming

  17. Neowiz Online Games Neowiz Online Gaming The Neowiz team brings significant experience in the full execution of in-house game development & publishing Special Force Card Games • No1. Game Rooms M/S • Commercialize 1Q05 • Revenue Growth (USD 2 million / month) • No1. Traffic • No1. Customer Satisfaction Index • No2. Market Share No1. Casual GameOperator.No2. Card GameOperator Strong Partnerships with major online game developers & publishers. Overseas Up & Coming • R2Beat starts open beta in China by Tencent (4Q) • Yogurting in Japan • Additional overseas contracts to be signed • Publish XL Race (from producer of Lineage series) • 10+ more casual games to be launched in 2006

  18. Segmentation of Korean Online Games Neowiz Online Gaming Hardcore/Violent Hardcore MMORPG Lineage Casual Games Lineage2 MU SpecialForce By NEOWIZ RFOnline WoW RTS Star Craft Kart Rider Casual Serious Web Games YeolhulKangho Web Board Game By NEOWIZ Free Style Ragnarok Neowiz has a strong market presence in all genre of online game market MapleStory Pangya YogurtingBy NEOWIZ Get Amped System Casual MMORPG Cute

  19. Neowiz in Online Game Market Neowiz Online Gaming Top Online Games in Korea(Source: Gametrics) • Among the top 50 Korean online games, 6 titles are provided by Neowiz including the no1. title in Korea. • Special Force has become No1. game in Korea since June 2005. • Variety of Pmang’s web board game offerings make Neowiz No 2. player in the board game market & generates an annual revenue over USD 60 million. • Neowiz is the only game publisher that offers every genre of online games in Korea (Casual, Board, RPG…) (†) Market share is based on each title’s usage time at Internet cafes, as of August 2005

  20. Pmang.com Key Metrics Monthly Unique Visitors: 5.8 millionFee Paying Users: 537,149 Monthly ARPU: KRW 14,395 Monthly Unique Visitors & Paying Conversion Unique Visitors in 000 Conversion Rate Monthly Paying Users & ARPU

  21. Special Force Neowiz Online Gaming • An online FPS game with peak concurrent user base exceeding 110,000. • The No.1 most popular online game in Korean Internet game rooms. • Developed a unique way to monetize its massive concurrent user base. • History • July 2004 Open Beta • August 2004 No. of Concurrent User exceed 20k • January 2004 No. of Concurrent User exceed 50k • February 2005 Selected as an official E-Sports game • February 2005 Achieving FPS Market share of 90% • March 2005 No. of Concurrent User exceed 80k • June 2005 No1. market share in Korean PC Cafes • June 2005 Monthly item sales exceeds USD 2 million • August 2005 No. of Concurrent Users exceed 100,000 Market Share of Online Games

  22. Card Games Neowiz Online Gaming Card Game Sales Trend (KRW bn) 20 16.7 Revenue generated by: Game Avatars:Pay W 950W ~ W 6,500 to Buy Game Avatars that Grant Varying Amounts of Virtual Cash that Can Be Used for Betting. Monthly Subscription:Pay W12,000 Monthly Subscription Fee that Grants Larger Amount of Cash for Betting & Daily Cash Refill. This Service was Launched on Feb 15, 2004. Game Items: Can Purchase Variety of Special Skills & ‘Hire’ Virtual Tutors to Enhance Win Ratio. 16.1 14.2 13.7 11.8 10 3Q04 3Q05 4Q04 1Q05 2Q05 Pmang’s Porker Game

  23. Coming Soon… Neowiz Online Gaming New publishing partnership with XL Games Corp. XL Games is a company led by one of the star developer in Korea, Mr Jake Song, the lead developer behind Lineage series. Neowiz will publish the most advanced online racing game called XL Race. The game will start its beta service from 4Q and planed to be commercialized before the end of the year . Project GG: New game development Mr. Sang Won Chung, ex-CEO & lead developer of Nexon and his core Nexon development team has joined Neowiz. (Nexon is a company behind Kart Rider: No2. most popular game in Korea and generating USD 7 million/ month) “More & more top developers are joining Neowiz Publishing network”

  24. 3Q new games beta testing XL1 Sep 27 Closed Beta Test GoGo Treasure Sept 21 Close Beta Test R2Beat Open Beta Export contact with Tecent(China’s biggest game portal)

  25. More Online Game Publishing Partners Enhanced publishing capability attracts more quality developers. Over 10 new titles are scheduled to be launched in 2006. • Dragon Fly • Special Force Sales Expansion • New Publishing Line ups • Penta Vision • WiseCat • NeoAct • EverPlant • XL GamesJake Song’s company(Original developer of Lineage series) • XL1 Racing Game • XL1 Overseas Service • Thing SoftSangwon Jeong • (Ex Nexon CEO, • Original • Developer of the • Legend of Winds) • Project GG • Ntix Soft • Yogurting Overseas Service

  26. Publishing & In house development Y2005 Y2005 Y2006~ Y2006~ Publishing vs In-house Development FPS Web board Games MMORPGRTSCasual Over 10 different online games of various genres in its pipeline • Thing soft • Ntix soft • Pmang • DragonFly • PentaVision • WiseCat • NeoAct • EverPlant In house Development Securing a solid publishing line-ups for 2006 Strengthen in-house development capabilities

  27. Margin Improvement Op Margin Trends ContinuingMarginImprovement Y2006TargetOP Margin25% Sales Operating Profit (KRW billion) OP Margin 27.5 22.5 20.7 20.4 19.1 18.5 17.4 25% 19% 5.7 14% 5.1 12% 9% 1% 2.6 -6% 2.5 1.9 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 2006 • Streamline Sayclub’s cost structure • Target Op Margin for Y2006: 25%

  28. Real Turnaround Growth& Profit Net ProfitTurnaroundManaging Equity Method Loss SalesTurnaroundPmang & Special Force OP MarginImprovement StreamlineCost StructureTarget 25% + 2005 3Q 2005 4Q 2006~

  29. Appendix: 3Q Earning Summary 1) Revenues: KRM 27.5 bn, up 32% Q-Q 2) Operating Profit: KRM 5.1 bn 3) Profit Before Tax: (-) KRM 3.7 bn 4) Net Profit: (-) 4.3 bn (KRM in million )

  30. Appendix: 3Q Earning Summary 3Q05 Sales (KRM in Million) 3Q05 Operating Costs (KRM in Million)

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