On Tuesday in South Korea, Pearl Abyss held its earnings call for the first quarter of 2025. The company experienced a quarter-over-quarter decrease in revenue of 20.4%, from ₩95.7 billion ($68.5 million) in Q4 2024 to ₩83.7.7 billion ($57.7 million) in the first quarter. Year-over-year the company's first quarter revenue decreased by 2%.
For the third time out of the last four fiscal quarters Pearl Abyss ran at an operating loss. The ₩5.2 billion ($3.6 million) loss in the first quarter of the year puts the operating losses at ₩18 billion (-$12.9 million) over the last 12 months. Pearl Abyss did manage to pull off a net profit of ₩500 million ($300,000) in the first quarter.
In non-gaming revenue Pearl Abyss saw a drop of revenue from Pearl Abyss Capital of ₩4.4 billion ($3 million) due to lack of activity. The large net profit in Q4 2024 was a one-time event due to FX (foreign exchange) gains plus a revaulation of some of the company's assets. The drop in net profits in the first quarter were the numbers retreating back to the norm.
But the biggest decline in revenue was due to
the ending of the Black Desert Mobile service in China. The contract with TenCent to operate
Black Desert Mobile in China was supposed to run until 26 April but due to poor performance TenCent and Pearl Abyss ended service for the game on 27 January.
While the company removed platform data this quarter, the earnings call PowerPoint presentation still had revenue breakouts by region. While North American/EU (+2.2%) and Korea (+1.8%) experienced small gains, the rest of Asia region experienced a quarter-over-quarter decline of 32.8%, a drop of ₩8.9 billion ($6.9 million). Pearl Abyss no longer breaks down revenue by game franchise but one can assume most if not all the revenue decline is due to the ending of BDM service in China.
Finally on the subject of profits, the company's CFO did point towards CCP Games' development of two games, EVE Frontier and EVE Vanguard, as another reason for the quarter's operating loss.
The analysts on the call were told of various initiatives designed to increase revenue. Black Desert Console is expected to finish work on porting the game to the current generation of consoles (PS5 & XBox XIS) and release the updated game on 26 June.
For EVE, while the presentation did tout the upcoming Legion expansion, Pearl Abyss chose to make EVE Frontier a bigger focus than normal for a game from CCP. I think progress on a blockchain game is supposed to make investors forget some of the pain surrounding Crimson Desert.
According to the C-Suite members on the call, development of the long-delayed game is in the last stages of preparing to launch. These steps include final voiceover work and certification for consoles. Expect full scale marketing efforts to begin in June to include a new demo build to use at game shows.
Note: The conversion of the QoQ revenue loss in the rest of Asia has been corrected from $11.5 million to $6.9 million.
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