Date: November 10, 2026 (Tue)
Subject: Shift Up Q3 2026 Financial Results and Future Strategy
■ Summary of Shift Up's Q3 2026 Financial Results & Current Status
▣ Q3 2026 Financial Overview
- Q3 2026 Revenue: 46.2 billion won (-38.8% YoY, -17.1% QoQ)
ㄴ GODDESS OF VICTORY: NIKKE focused on solidifying live services ahead of 4th-anniversary event
ㄴ Stellar Blade saw natural decline in sales on existing platforms, preparing expansion to new platforms
ㄴ Growth in other revenue driven by expansion of IP business domains
- Operating profit of 20.7 billion won (-58.2% YoY, -26.4% QoQ), quarterly net loss of 25.5 billion won (turned to loss)
ㄴ Recorded a 53.7 billion won non-operating loss due to foreign currency evaluation and translation losses
▣ Q3 2026 Cost Overview
- Q3 2026 Operating Expenses: 25.5 billion won (-1.7% YoY, -7.6% QoQ)
- Labor costs: 14.7 billion won (+5.3% YoY, -5.5% QoQ)
ㄴ Decrease in allocated incentive costs tied to operating profit
- Variable costs: 5.1 billion won (-47.6% YoY, -16.1% QoQ)
ㄴ Decrease in revenue-linked platform commission fees for Stellar Blade
- Fixed costs: 5.7 billion won (+145.5% YoY, -4.5% QoQ)
▣ Business Status
- GODDESS OF VICTORY: NIKKE
ㄴ Q3 revenue decreased 18.4% QoQ compared to the previous quarter, which featured the 3.5-anniversary event
ㄴ Communicated story and content development plans ahead of the 4th anniversary
- Stellar Blade
ㄴ Hosted hands-on demo event for the Switch 2 version at Tokyo Game Show 2026
ㄴ Initial performance of the Switch 2 version released on Nov 6 met internal expectations
- IP Business & Other
ㄴ Steadily expanding IP business operations centered around GODDESS OF VICTORY: NIKKE
ㄴ Reflected performance from Stellar Blade IP business initiatives
■ Q&A
What were GODDESS OF VICTORY: NIKKE's Q3 2026 performance results?
= Q3 revenue recorded approximately 35.3 billion won, down 18.4% QoQ and 20.6% YoY. Revenue declined across all service regions compared to the previous quarter, and the decline was further widened in KRW terms due to a weaker US dollar. During Q3, we conducted the summer season event, a collaboration with the Persona series, and the bunny girl event. We are also concentrating on solidifying live operations, including strengthening our collaboration framework with our publisher.
Along with this, we hosted various offline events across major global service regions, including Anime Expo 2026 in North America, Bilibili World in China, the NIKKE Band Live Concert 'Full Burst Live' in Korea, a summer pop-up store at The Hyundai Seoul, as well as the 'NIKKE in Kyoto' collaboration and Lawson convenience store campaign in Japan. We will continue working to expand the IP experience both inside and outside the game to ensure it remains a beloved IP over the long term.
What are the performance results of GODDESS OF VICTORY: NIKKE's 4th-anniversary update and future outlook?
= We revealed the main 4th-anniversary content through a special livestream on October 24 and rolled out the 4th-anniversary update on October 29. We prepared this 4th-anniversary event as our largest anniversary update to date, introducing diverse content including key narrative beats that serve as a major turning point for the story built so far, event cutscenes, and new music tracks. Right after the update, it reached #1 in revenue rankings in South Korea and Japan.
Leading up to the 5th anniversary in 2027, we plan to gradually introduce features that enhance player immersion, such as narrative-focused cutscene enhancements and utilization of SD characters. We will also pursue operational efficiency in collaborations. While flexibly continuing collaborations with popular external IPs, we will focus more heavily on expanding NIKKE's original content. Moving forward, we will do our best to refine content based on player feedback and gain player trust through stable service management.
What were Stellar Blade's Q3 results, and what is the sales outlook for the Nintendo Switch 2 version?
= Stellar Blade has maintained a steady sales trajectory since launch, solidifying its position as a long-seller IP in the PC and console markets. Q3 revenue decreased 32.9% QoQ. Sales volume on existing platforms has naturally tapered off, stabilizing at a steady baseline.
In last September's Nintendo Direct, we revealed the release schedule for the Switch 2 version alongside a Bayonetta collaboration, opening pre-orders. From September 17 to 21 at Tokyo Game Show 2026, we also held hands-on demos for the Switch 2 version. Then, on November 6, we globally self-published the Switch 2 version simultaneously. Along with the launch on the new platform, we provided the Bayonetta collaboration outfit free of charge to players on existing platforms, sustaining sales momentum.
The initial sales performance of the Switch 2 version is meeting our internal expectations, and it is contributing to expanding overall cumulative sales.
What is the current development status of Stellar Blade: Blood Rain?
= Last June at Summer Game Fest 2026, we unveiled the official title and in-game trailer for Stellar Blade: Blood Rain. The trailer recorded 1.78 million views on IGN's official channel as of late October 2026, reflecting ongoing interest from global players. Under the principle of securing sufficient development time to deliver top-tier polish, development for Stellar Blade: Blood Rain is progressing according to target goals. Further information about the game will be revealed in stages.
Recently, global pop star The Weeknd visited the Shift Up headquarters during his trip to Korea, touring the development facilities, hands-on testing a build currently in development, and expressing his love for Stellar Blade. This serves as an example showing that Stellar Blade is establishing itself as a global IP gaining attention beyond games into cultural spheres. We will do our utmost in developing Blood Rain to meet these expectations.
What is the development status and reveal timing for Project Spirit?
= Project Spirit is Shift Up's next flagship title. Aiming for an unrivaled level of quality to compete on equal footing with major global subculture titles, development is progressing smoothly in close collaboration with our partner. We recently completed a positive build evaluation tied to development milestones, and we are elevating game development quality on the back of a solid partnership.
However, while we originally targeted revealing the new title within 2026, we have adjusted the timing considering the launch schedules of major upcoming titles from other companies slated from late this year into early next year. This decision was made to present Project Spirit's unique worldview and gameplay in full detail at an optimal moment that maximizes global player interest and buzz. Specific schedules will be announced as soon as they are finalized. We will do our utmost to present Project Spirit with top-tier quality that repays your anticipation and support. In addition, we plan to sequentially reveal information on multiple new project pipelines being prepared by our subsidiary Unbound, based on each title's readiness.
What is the status of the IP business and the background behind the increase in Q3 other revenue?
= Q3 other revenue reached approximately 5.0 billion won, up 37.1% QoQ and 48.7% YoY. Currently, most of other revenue is recognized as royalty income from IP licensing, and actual gross sales generated in the global market are yielding performance on par with top-tier global IPs.
The NIKKE IP business started out small around launch focused on printed merchandise and select figure licensing, but has expanded its domain year by year to include original soundtracks, pop-up stores, TCGs, orchestra and band concerts, as well as events across Korea, Japan, and North America. Stellar Blade is also showing tangible IP business results centered on TCG releases, music streaming, and collaborations. Although the proportion of other revenue to total revenue is not yet large, we plan to gradually enhance our business by expanding IP business domains and diversifying revenue streams.
What is the outlook for future operating expenses, including labor costs?
= Q3 operating expenses recorded approximately 25.5 billion won, down 7.6% QoQ. As quarterly incentives linked to operating profit decreased alongside the fall in operating profit, consolidated labor costs dropped 5.5% QoQ. Commission fees tied to Stellar Blade sales, as well as advisory fees and outsourced development expenses incurred in the previous quarter, also decreased. At the end of Q3, consolidated headcount stood at 460 employees, up by 18 from 442 at the end of the previous quarter.
In Q4, labor costs are expected to increase due to headcount expansion and higher performance incentive recognition tied to operating profit. Fixed costs are also projected to rise due to increased outsourced development expenses for new talent and NIKKE live content development. Variable costs are also expected to increase as marketing expenses related to the launch of Stellar Blade's Switch 2 version are added. Consequently, Q4 operating expenses are expected to increase compared to Q3. As this represents proactive investment for developing new IPs and internalizing PC and console publishing capabilities, we plan to manage the balance with profitability under a tone of efficient cost execution.
What is the background behind the treasury stock cancellation decision and future shareholder return direction?
= To enhance shareholder value, we retired 330,000 shares in March this year out of the 957,955 treasury shares (worth approx. 50 billion won) acquired last year. Subsequently, we decided to cancel an additional 320,000 shares out of the 620,836 treasury shares (worth approx. 20 billion won) newly acquired this year. As a result, total share cancellations this year will reach 650,000 shares, representing approximately 1.1% of total issued shares. Remaining treasury shares after cancellation will be utilized as resources for employee compensation. We plan to obtain approval for treasury share holding plans at the annual general meeting of shareholders each year. Moving forward, we will continue executing shareholder return policies while balancing shareholder value enhancement with investments for future growth.
