NEXON Co., Ltd. Quarterly Securities Report: The Third Quarter of the 21st Fiscal Year

Key insights

7 takeaways

01
Nexon achieved record-breaking quarterly revenue of ¥97,463 million in Q3 2022, marking a 28.4% year-over-year increase driven by strong performance in Korea.See it on page 7
02
Net income for the first nine months of the fiscal year reached ¥108,271 million, a 16.6% increase supported by finance income and the divestment of Six Waves Inc.See it on page 7
03
Growth was primarily fueled by core titles including MapleStory and EA SPORTS FIFA ONLINE 4, alongside successful new launches such as Dungeon&Fighter Mobile and HIT2.See it on page 6
04
The company’s board approved a share buyback program of up to ¥50 billion, reflecting a strategic focus on capital management despite rising operating costs and ¥3,776 million in impairment losses on game copyrights.See it on page 45
05
While the Korean market served as the primary revenue engine, the company faced a revenue decline in China due to the softening performance of the Dungeon&Fighter franchise.See it on page 6
06
Nexon strengthened its long-term development capabilities by transitioning Embark Studios AB into a wholly-owned subsidiary.See it on page 41
07
As of September 30, 2022, the company maintained a strong financial position with total assets valued at ¥1,058,964 million.See it on page 8

Summary

Nexon Co., Ltd. demonstrated robust financial expansion during the third quarter of the 2022 fiscal year, characterized by record-breaking quarterly revenue of ¥97,463 million. This 28.4% year-over-year increase was primarily fueled by the strong performance of core PC and mobile titles, including MapleStory and EA SPORTS FIFA ONLINE 4, alongside successful new launches such as Dungeon&Fighter Mobile and HIT2. While the company experienced a revenue decline in China due to the softening performance of the Dungeon&Fighter franchise, these losses were offset by significant growth in the Korean market and favorable foreign exchange gains.

The company’s financial position remains strong, with total assets reaching ¥1,058,964 million as of September 30, 2022. For the first nine months of the fiscal year, net income rose to ¥108,271 million, representing a 16.6% increase over the previous year. This growth was supported by substantial finance income and the divestment of Six Waves Inc., which helped mitigate the impact of rising operating costs and impairment losses on game copyrights totaling ¥3,776 million. Capital management remains a strategic priority, evidenced by a board-approved share buyback program of up to ¥50 billion and a significant cash outflow related to treasury stock purchases.

Operationally, the company continues to leverage its five geographical segments, with Korea serving as the primary engine for both PC and mobile revenue. Strategic consolidation efforts, such as the transition of Embark Studios AB into a wholly-owned subsidiary, underscore a commitment to long-term development. Despite shifting valuation inputs for financial instruments and increased discount rates for Level 3 assets, the company maintains a stable outlook, supported by strong earnings per share and a disciplined approach to managing its global portfolio of game assets and equity investments.