1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:The Hongkong and Shanghai Banking Corporation Limited,Seoul Securities Branch View HSBC Global Research at:h

2、ttps:/ Thank you for your supportSee resultsHSBC in Extel Survey 2025 Challenging environment that lowers hit ratio continues due to intensifying competition and rising user acquisition cost Earnings growth is more likely for companies with regular new releases in diversified genres and room for cos

3、t control We like Netmarble(Buy,TP KRW84k);but still cautious on NCSoft(Hold,TP KRW175k),implying c16%downside Stay selective:We have had a cautious view on the Korea gaming sector due to the challenging business environment,that lowers the hit ratio,due to:1)intensifying competition;2)increasing us

4、er acquisition costs;and 3)increasing new game development costs(although AI tech is being incorporated into the development process for Korea gaming companies,it still appears to require more time before leading to meaningful reductions in development time or cost efficiency).As a result,many compa

5、nies have restructured their development teams into independent studios(as subsidiaries),shifting their strategy from focusing every asset on a single blockbuster title to releasing multi new games across a broader range of genres.Interestingly,this is a strategy Netmarble has been pursuing for year

6、s.We highlight that Netmarble,thanks to its already well-established system,continues to demonstrate faster development cycles and a consistently strong pipeline of new releases each year compared to its peers.So,we like Netmarble the most in the sector given its highest visibility of earnings growt