NCsoft releases fiscal year 2004 results

NCsoft Announces Fiscal 2004

Record amount of revenues
reported; new titles scheduled for release in 2005

Seoul, South Korea, February 28,
2005—NCsoft® Corporation (KSE: 036570.KS) , the world’s leading developer and
publisher of online computer games announced financial results from the fiscal
year ended December 31, 2004. The Seoul-based game developer recorded total
revenues of KRW (Korean Won) 246 billion (US$246 million), an increase of 48
percent over FY2003. It marked the first time that NCsoft has reached more than
KRW 200 billion in revenues and marks the greatest annual revenue ever recorded
in the Internet games industry in South Korea.

NCsoft also reported operating
profit of KRW 108 billion (US$108 million) and net profit of KRW 77 billion
(US$77 million), an increase of 97% in operating profit and 145% in net profit
respectively over FY 2003. Profits from royalty earnings also topped KRW 37
billion (US$37 million).

For the fiscal quarter that ended
December 31, 2004, revenues were KRW 62 billion (US$62 million), down two
percent as compared to the third quarter of 2004. Operating profit was KRW 21
billion (US$21 million), down 25 percent from the previous quarter and net
profit was KRW 13 billion (US$13 million), down 39 percent from the third
quarter of 2004. Due to the Korean won’s strength against the US dollar, profits
from royalty earnings also declined by 6 percent to KRW 10 billion (US$10
million). The company attributes the losses to increasing labor costs and
marketing costs. This is somewhat different from views held by some industry
experts who expected the release of World of Warcraft, a competitive product, to
have a negative impact on NCsoft’s business. Those expectations proved untrue as
total company revenues in Korea fell just one percent from the third quarter of
2004, even though the fourth quarter is typically a low-demand season.

NCsoft today also revealed its goals
for the current fiscal year. The company plans to reach total revenues of KRW
305 billion, operating profit of KRW 110 billion and profits from royalty
earnings of KRW 52 billion.

In Korea, NCsoft will be
commercially launching new products Guild Wars® in the first half of 2005 and
City of Heroes® in the second half of the year. Overseas, NCsoft has a more
diversified plan. Guild Wars, which will be released as a retail product with no
monthly subscription fee, launches in North America and Europe on April 28. City
of Villains™, the much anticipated sequel to the highly successful City of
Heroes is expected to release later in the year as is the post-apocalyptic car
combat game, Auto Assault™.

NCsoft also highlighted its
long-term business strategy, including these goals:

Continue to be competitive in the
existing massively multiplayer sector and gradually broaden its market.

Develop an online games
multi-platform strategy.

Promote NCsoft’s overseas business
and establish a wider global publishing presence. That will lead to new online
experiences for gamers worldwide.

These goals will have NCsoft
focusing this fiscal year on developing competitive products, efficient business
operations and exploring business expansion.

More information about NCsoft can be
found at

NCsoft, the interlocking NC logo,
Lineage, Guild Wars and Auto Assault and all associated NCsoft logos and designs
are trademarks or registered trademarks of NCsoft Corporation. City of Heroes
and City of Villains are trademarks or registered trademarks of Cryptic Studios,
Inc. and NCsoft Corporation. All other trademarks are the property of their
respective owners.