According to Datamonitor, the global online game industry generated US$1,995 million of subscription revenues in 2003 with Asia contributing approximately US$1,400 million or 70% of the total subscription revenues.

According to IDC, the Korean online game market is the largest online game market in the Asia/Pacific region based on online game subscription revenues. According to IDC, the Korean online game market grew by 37.2% in 2003 with aggregate subscription revenues of US$397.1 million. According to IDC, from 2003 to 2008, subscription revenues in Korea are expected to grow by a CAGR of 8.1% to reach US$586.0 million in 2008.

According to IDC, the Taiwan online game market grew by 23.2% in 2003 with aggregate subscription revenues of US$170.4 million. According to IDC, from 2003 to 2008, subscription revenues in Taiwan are expected to grow by a CAGR of 13.8% to reach US$324.9 million in 2008.

According to IDC, the China online game market is the third largest online game market in the Asia/Pacific region based on online game subscription revenues and one of the fastest growing markets regionally. According to IDC, the China online game market grew by 45.7% in 2003 with aggregate subscription revenues of US$159.7 million.

According to Datamonitor, the Japan online game market grew by 167% in 2003 with aggregate subscription revenues of US$82 million. According to Datamonitor, from 2003 to 2006, online game subscription revenues in Japan are expected to grow by a CAGR of 25% to reach US$160 million in 2006.

According to IDC, the Thailand online game market is a fast growing online game market. According to IDC, the Thailand online game market grew by over 1,700% in 2003 with online game subscription revenues of US$6.9 million. According to IDC, from 2003 to 2008, subscription revenues in Thailand is expected to grow by a CAGR of 22.8% to reach US$19.2 million in 2008.

Currently, the Company commercially offers one massively multiplayer online role playing game, Ragnarok Online. In the first quarter of 2005, the Company expects to commercially launch another massively multiplayer online role playing game, R.O.S.E. Online. In addition, the Company is internally developing two other massively multiplayer online role playing games, Requiem and Ragnarok Online 2.

Ragnarok Online is an action adventure-based massively multiplayer online role playing game that combines cartoon-like characters, community-oriented themes and combat features in a virtual world within which thousands of players can interact with one another. Ragnarok Online features cute, fantasy-based characters and is not centered around sexual and violent content.

The Company commenced open beta testing of its second massively multiplayer online role playing game, R.O.S.E. Online, in September 2004 and expect to commercially launch it in the first quarter of 2005. R.O.S.E. Online, a three-dimensional game, is the first online game developed by a third party that the Company published pursuant to an exclusive publishing license agreement. R.O.S.E. Of the seven episodes to be introduced for R.O.S.E. Online, the Company anticipates that two episodes will be ready for immediate access by the time of commercial launch and the remaining five episodes are expected to be added over time.

Cost of revenues increased by 55.8% to W7,480 million (US$6,493 thousand) in the first nine months of 2004 from W4,800 million in the first nine months of 2003.

Gross profit increased by 75.5% to W40,498 million (US$35,154 thousand) in the first nine months of 2004 from W23,077 million in the first nine months of 2003.

Selling, general and administrative expenses increased by 37.5% to W10,157 million (US$8,817 thousand) in the first nine months of 2004 from W7,387 million in the first nine months of 2003.