On Tuesday in South Korea, Pearl Abyss held its earnings call for the third quarter of 2024. The company experienced a quarter-over-quarter revenue decline of 2.8% down to ₩79.5 billion ($58.6 million). Year-over-year the company's revenue has declined 6.3% compared to Q3 2023's revenue of ₩84.9 billion ($64.7 million).
The operating loss translated into a net loss of ₩7.8 billion ($5.8 million). In response to a question from one of the investment analysts, a member from the Pearl Abyss C-suite explained the company had experienced a couple of one-time expenses that contributed to the losses. The first was ₩2.5 billion spent on responding to a tax audit from the South Korean government. The other was ₩500 million in increased electrical costs for air conditioning during the summer's abnormally warm summer.
While the second net loss over the last four quarters, Pearl Abyss has shown a profit of ₩9.2 billion ($7.2 million) over the period.
In another piece of news, ₩5.0 billion, or 6.3% of Pearl Abyss' revenue did not come from game revenue associated with its two main intellectual properties. In the past Pearl Abyss has posted significant revenue from its financial division. Apparently the same happened again in the third quarter, although none of the investment analysts on the call asked about the subject.
In a look at the Black Desert IP revenue fell from the previous quarter by 10%, down to ₩54.0 billion ($39.8 million). The year-over-year decline was steeper, with the quarter's revenue down 21% from the ₩68.4 billion ($52.1 million) posted in the third quarter of 2023. The financial picture in the fourth quarter looks rosier as Tencent began Black Desert Online service in the People's Republic of China on 24 October. Additional sales are possible as the company plans special events to celebrate the 10th anniversary in December.
The picture was brighter for the games set in the EVE universe. Quarter-over-quarter sales fell 5.1% down to ₩20.5 billion ($15.1 million) in the third quarter. But year-over-year sales rose 28.1% compared to Q3 2023's mark of ₩16.0 billion ($12.2 million), meeting the revenue expectations set on the Q2 earnings call.
Revenue should rise for the EVE IP in the upcoming quarter. In addition to the bi-annual EVE Online expansion launching today, the new mobile game, EVE Galaxy Conquest, launched globally on 29 October. In addition, two games under development, EVE Vanguard and EVE Frontier were mentioned on the call. In response to token sales concerning CCP's blockchain-based MMORPG, the Pearl Abyss CEO referred all such queries to CCP.
The most questions, however, were asked about Crimson Desert. The Pearl Abyss leadership spent a lot of time deflecting questions about the game, probably to not overshadow any upcoming announcement coming up at G-STAR this weekend starting on Thursday in Busan. After a question about the demo at G-STAR, the analyst was told to go to the convention floor and play it himself. I think the question might have struck a nerve as those on the call had already been told the playable demo at G-STAR would basically be the same one presented at Gamescom except with one additional boss.
Some questions about Crimson Desert were answered on the call. For example, the 22% increase in advertising expenditures up to ₩8.9 billion ($6.6 million) was mostly due to increased costs associated with attending game shows and other events to introduce the game to the public. Also, the studio is still considering multi-player modes as well as downloadable content to keep revenue up after the game's first year on the market. When Crimson Desert was first introduced a multi-player mode was included as a feature.
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