- Wemade reported widening operating and net losses for Q4 2022 despite a 28% increase in sales revenue due to higher costs.
- The company aims to transition from traditional gaming to blockchain-based Web3 gaming, launching the WEMIX token and blockchain subsidiary in 2020.
- Wemade formed a $100 million Web3 gaming fund partnership in December 2022 but disclosed a $41 million tax liability for WEMIX tokens to South Korean authorities.
South Korean game developer Wemade has reported significant increases in operating and net losses for Q4 2022. The company attributes the losses to rising costs despite sales growth. Wemade aims to transition from traditional gaming to blockchain-based Web3 gaming.
Financial Performance in Q4 2022
In Q4 2022, Wemade’s net loss surged to KRW 1.9 trillion compared to KRW 744 billion in Q4 2021. Operating losses also widened to KRW 708 billion, up from KRW 287 billion in the same quarter last year.
However, Wemade generated KRW 1.18 trillion in sales for Q4 2022, a 28% increase year-on-year. The sales growth is attributed to new game launches and licensing deals. But increased operating costs for sales, labor and investments led to the widening losses.
Transition to Web3 Gaming
Wemade is moving from traditional online gaming to blockchain-based Web3 gaming. It launched its WEMIX token and blockchain subsidiary Wemade Tree in 2020.
WEMIX tokens have returned 635% since launch. Wemade aims to use blockchain technology to power a network of Web3 games.
Partnerships and Controversies
In December 2022, Wemade partnered with Whampoa Group to launch a $100 million fund for Web3 gaming initiatives in the Middle East. However, Wemade disclosed an outstanding $41 million tax liability to South Korean authorities for WEMIX tokens.
Wemade plans to provide more insights into its 2023 strategy during its upcoming earnings call. The South Korean government has imposed restrictions on blockchain gaming, but Wemade is developing blockchain games for international markets.