1. What Happened? Q1 2025 Earnings Breakdown

Kakao Games reported Q1 2025 revenue of KRW 115.8 billion, a 5.8% decrease year-over-year but slightly above expectations. Operating loss improved to KRW -8.6 billion, while net loss widened to KRW -26.1 billion, significantly missing estimates.

2. Why These Results? Analyzing the Factors Behind the Performance

The revenue decline is primarily attributed to lower revenue from existing games and delays in new game releases. Improved operating loss is likely due to cost control efforts. The significant net loss is likely due to non-operating losses or increased tax expenses.

3. What’s Next? Outlook and Investment Strategies

In the short term, the success of new game releases will be crucial for the stock’s performance. Long-term prospects hinge on R&D investment outcomes, macroeconomic conditions, and intensifying competition.

4. Investor Action Plan: Navigating the Current Landscape

Short-term investors should closely monitor the initial performance of new game releases and adjust their strategies accordingly. Long-term investors should continue to monitor the company’s R&D investments and efforts to enhance competitiveness.