W Games turned into a deficit with its poor performance in the second quarter of this year, drawing keen attention to the background. It is analyzed that the aftermath of the decline in sales of major cash cow games has affected the burden of large-scale litigation provisions.
According to the Financial Supervisory Service’s electronic disclosure system on the 29th, W Games’ sales in the second quarter of this year fell 5.7 percent year-on-year to 149.6 billion won and operating profit fell 14.7 percent to 41.8 billion won. Net loss for the current term turned into a deficit with 39.1 billion won.
The company explained that a large-scale net loss occurred, reflecting 92.5 billion won in one-time provisions related to class action of social casino games in the U.S. W Games is in the process of a class action suit for the return of unfair profits filed by some users in a Washington state court in 2017 against Double-Down Casino.
Sales of ‘Double Down Casino’ and ‘Double U Casino’, which are major cash cow games, fell 3.3 percent and 11.0 percent year-on-year, respectively, to 101.1 billion won and 101.1 billion won, respectively. Double-down Casino, a social casino game, was released in 2010, and Double U Casino has been boasting steady profitability since its launch in May 2012.
Looking at the financial statements, current provisions (debt to be repaid within a year) amounted to 0 to 96.9 billion won. The company explained, “The liquidity provision increased sharply in the second quarter as it reflected the lawsuit provision related to its subsidiary Double-Down Interactive and recorded a net loss in the quarter.”
W Games entered the social casino game market early on. Social casino games have the advantage of being able to bring stable high profits to game companies compared to other genres. This is because production costs are less burdensome and users’ loyalty is high. However, in Korea, the service is difficult due to gambling problems, so the service is only provided overseas.
The company plans to secure new growth engines through new businesses and new developments in the second half of this year. W Games is going to conduct an OBT test of ‘Spinning in Space’ in the fourth quarter of this year. Spinning In Space, which is currently undergoing a closed-door test (CBT), is a story-oriented adventure-type casual game that features various slot contents during the game process.
An official from W Games said, “To secure growth, we are currently developing new games through internal studios, planning and preparing new businesses internally,” adding, “We are considering mergers and acquisitions (M&A) for casual game developers and online casino license holders (UK).”
Meanwhile, Double U Games was established in April 2012 and changed its name from “Apu Good Soft” to “Double U Games” in August 2013.
source:카지노사이트