On August 30th (KST), Pearl Abyss held the IPO press conference at the 63 City in Yeouido, Seoul. At this conference, Kyung In Jung, the CEO of Pearl Abyss, has introduced its company, strategies for upcoming developments, and the plan for future releases.



Date: 12:00 ~ 13:00 PM, August 30th, 2017 (Wed)

Participants: Kyung In Jung, and Seok Woo Cho, the CFO of the company

Content: Introduction of the company, strategies for upcoming developments, and the plan for future releases

Kyung In Jung, “Black Desert Online is the game that shows graphics and game elements with utmost specification”





▲ Kyung In Jung, the CEO of Pearl Abyss

“Black Desert Online (BDO hereafter), developed by Pearl Abyss, is a MMORPG on the PC which took 4 years of the development process, and is now being serviced in about 100 countries in 7 different regions. The total RU is more than 7.65 million based on July 2017, and the total sales are approximately ￦340b.”



“BDO is achieving a global result with a high degree of freedom, an abundant amount of content, realistic graphics, and player-friendly ecosystem.”





▲ The trend curve showing the aggregate monthly sales of BDO

- The self-developed game engine, Black Desert Engine



“By possessing the self-developed engine, Pearl Abyss has increased the revenue per person 2 to 3 times bigger than other companies through the reduced development cost. Furthermore, we have implemented the predictable costing system instead of payments for development and engine royalty which occur at the increase in the number of players. We have also achieved increasing the PLC of the title with continuous content releases.”



“Due to the self-developed engine, we were able to develop the title with a relatively small cost of ￦12b compared to other MMORPGs.”



“Other than the engine itself, we also have high-end game development and capability. Along with the sophisticated graphic development that aims to show realistic performances, 87% of employees are all developers. There are also main facilities such as the sound room and motion capture studio. Moreover, we are maintaining retention of the title with fast and constant massive content updates performed by our self-developed engine.”



“Pearl Abyss is doing a self-publishing in Taiwan, and the process is successful so far by topping the rank for 8 months of the service. We believe that, not only the development, but we are also capable of the service. We are planning to expand the service to different countries and regions such as Southeast Asia and Turkey, and other platforms as well. We have recently acquired Nettention, and are in progress of strengthening the server management.”



Future strategies



- Prolonging the PLC



“Unlike mobile games, PC online games have an extremely long life cycle. The average service period of top 10 global online games is 10 years and 4 months. These games succeeded to prolong the period through the constant inflow of NRU, and it is expected that major games will likely continue leading the market as there isn’t any new major game recently.”



“The wall of PC online games market is high, and you are to have a solid outcome if the title overcomes it and sits in the rank. BDO has been on the market for 2 years and 8 months, and we expect it to follow the global games’ long life cycle.”



“This is evident in the sales of BDO that has risen up to 89% of the highest result within 24 months since the release in South Korea, and the sales in Japan keeps increasing for 21 months since the release.”





- Current situation of BDO global services



“All the regions where BDO has launched made a success. We believe that this is the evidence that BDO is a universally loved content. Therefore, we also believe that it will be successful in other regions.”



“We are planning for the services in Southeast and Middle East Asia, Turkey, and China. We are preparing the marketing specialized for countries such as Thailand and Indonesia in Southeast Asia, and we expect the trickle down effect from the success in Taiwan. In the Middle East, we are planning to localize UI/UX and make it perform as a bridgehead to the additional launches in Europe.”



“BDO published by Snail Games in China has completed the localization and development, and the number of pre-orders has exceeded 200k. We can expect a considerable result in China as we have succeeded in Taiwan.”



- Expanding distribution channels



We have distributed BDO to the Steam platform as of May 24th, 2017, and have sold 530k copies so far in the late July of 2017. The total amount of sales is $1.3m. In particular, the title was placed No. 2 of the total sales on Steam on June 20th. We see positive results just by having additional distribution channels. We are planning to expand the service through various distribution channels in other regions as well.”





- Expanding the platform



“Pearl Abyss has been developing PC online games. It is because we are good at making network-based high-quality games. Although we were not able to show our competitiveness in the mobile games market, the devices have improved much during a few years in the past, and the networking on the console is available. Therefore, we are preparing for the mobile and console as well.”



“In order to enter the mobile MMORPG market, we are preparing the game tentatively named BDO M. The development process has been completed to some extent, and the teaser released a couple of days ago is the in-game footage.”



"The recent mobile MMORPG are usually developed with the IPs of online games. MU Origin that used the MU IP flourished by setting the record of ￦42.5b per month, and Maple Story M exceeded the total of 2 million downloads in 2 weeks. Netmarble Games’s Lineage 2 Revolution earned the sales of ￦206b in a month after the release, and NCSOFT’s Lineage M made the sales of ￦13b per day.”



"Unlike the sales of existing titles is focused in South Korea and China, we expect our title to make a solid result in the global market with our existing PC IP.”







Black Desert Online M teaser

“We developed the partnership with Microsoft and introduced the console release at E3 2017, the biggest game show in the NA, for the first time. There was no prior example as to the introduction of the MMORPG in the NA market where package games are mainly focused.”



“The console market in the NA, the region where we have already launched our PC version, is 5 to 10 times bigger than that of PC online. We expect to make bigger results compared to the PC market.”



- Sales, and profit & loss by year





“Pearl Abyss is showing an extremely rapid growth. The company has grown 3 times better in 2016 compared to the last year. We expect the financial results to be much bigger when the mobile and console versions are released.”



- The lineup of Pearl Abyss’s new games



“We are internally preparing 4 projects right now. Two games are in development in which aim to be released in the second half of 2018. The other two aim to be released in 2019 and 2021. All of them are in progress to be network-based games with high-quality graphics by using the self-developed engine.”



The outline of an IPO



Face value: ￦500

The number of offered shares: 1,800,000



Expected value: ￦80,000 - ￦103,000

The total amount of expected value: ￦144b - ￦185.4b

The number of expected shares from listing: 12,066,300



The total amount of expected market value: ￦965.3b - ￦1.24t

Issue date: expected to be on September 14th, 2017



Q&A





▲ Seok Woo Cho, CFO (left), and Kyung In Jung, CEO (right)

Q. Would you switch to the self-publishing in South Korea, NA, and EU when the publishing contract of BDO is expired?



Mr. Jung: There are not many things we can tell in regards to the re-contract. We will renew the contract if the terms benefit each other, or consider other options otherwise. It is difficult to talk about it with some sort of solid plans right now.



Q. Has the publication right for the service in China been issued?



Mr. Jung: I believe that the evaluation has not gone through yet because of the issue between South Korea and China. I think it will be done when the evaluation takes place.



Q. Will you self-publish the mobile version of BDO?



Mr. Jung: We are still considering whether to self-publish or not. It’s hard to tell right now.



Q. The information regarding new games is not revealed, would you give a hint about what kind of games they are?



Q. Mr. Jung: All four games will be able to show our competitiveness. Although I can’t tell you about the genre in detail, they might have the keyword ‘MMO’.



Q. Do you have a plan to make sales of the self-developed engine?



Mr. Jung: Of course, we considered it as we believe that our engine can surely compete with other major engines. However, this will cause us to reduce a load of game content if we proceed with this business. Our current objective is to become a global top-tier only with content, so we are considering to do the sales for now.



Q. It seems as though you have a rather optimistic point of view.



Mr. Jung: We are growing at an extremely rapid speed. Unlike mobile games, it’s hard to have a wrong prediction in the PC online games market. It’s making steady sales in the servicing regions, and it shows a gradual increment whenever we launch the title in the new region. We can foresee the result to some extent based on these.



Q. How will you spend the fund from the IPO?



Mr. Jung: We are considering a number of ways to grow faster. We are interested in acquiring companies that can make games just like how we do with our IP. The partial amount will be used for developing upcoming titles, and the rest will be spent for the M&A.



Q. There’s an issue of the size of the mobile version as the quality is high-end.



Mr. Jung: I don’t think that the size and specification are extremely burdensome compared to existing mobile MMORPGs.



Q. How will BDO change on the console?



Mr. Jung: There will not be any major changes in relation to the game elements. We are optimizing the game to be suitable with the console UI. Though many people believe that the console and PC markets are different to each other, there are successful cases of the concurrent or simultaneous launch on the PC and console during the past few years. Therefore, we thought that the console gamers can also enjoy the network-based title, and decided to create the console version.



Q. What will you do in order to increase the shareholder value?



Mr. Jung: The ultimate solution for that is to keep growing. We will do our best to create upcoming titles while maintaining our competitiveness.



Q. Do you also have other consoles such as PS or Switch in mind?



Mr. Jung: Generally, we are considering various platforms for upcoming titles. We are also modifying the engine to support other console platforms. Although we plan to make it on the platform that can draw as much attention of gamers as possible, it is hard to tell right now.



Q. What are your upcoming plans for the self-publishing?



Mr. Jung: We have established the 100% owned branch for the service in Taiwan. We are currently establishing a branch in Singapore for the service in Southeast Asia. We are also establishing another branch and setting up personnel in Middle East Asia and Turkey.