NEXON Annual Securities Report: 22nd Fiscal Year

Key insights

6 takeaways

01
NEXON achieved record-breaking consolidated revenue of 423,356 million yen in 2023, marking a 19.7% year-over-year increase.See it on page 36
02
Net income attributable to owners of the parent company fell by 29.6% to 70,609 million yen, primarily driven by a 44,425 million yen impairment loss on equity method investments related to Brothers International, LLC.See it on page 37
03
The company maintains a strong balance sheet with an equity ratio of 81.6%, supporting its strategy of reinvesting cash flows from core IPs like MapleStory, Dungeon&Fighter, and FC ONLINE into new development and acquisitions.See it on page 21
04
Governance structures include a Compensation Committee and an Audit and Supervisory Committee that tie executive incentives to long-term performance metrics such as consolidated operating income and relative Total Shareholder Return.See it on page 92
05
Operational risks identified by the company include intense market competition, the inherent volatility of the global gaming sector, and regulatory scrutiny regarding loot boxes and juvenile protection.See it on page 28
06
NEXON continues to prioritize shareholder value through a combination of share repurchases, treasury stock retirements, and a consistent dividend policy.See it on page 74

Summary

The NEXON Annual Securities Report for the 22nd fiscal year, ending December 31, 2023, details the financial and operational performance of the Tokyo-based global gaming holding company. Operating across Japan, Korea, China, North America, and other regions, the company focuses on the development and service of PC and mobile games through a free-to-play, microtransaction-based model. The primary thesis of the report centers on the company’s ambition to become a global leader in virtual worlds by leveraging its core intellectual properties—such as MapleStory, Dungeon&Fighter, and FC ONLINE—while reinvesting stable cash flows into new game development, studio acquisitions, and talent recruitment.

Financially, the company achieved record-breaking consolidated revenue of 423,356 million yen in 2023, representing a 19.7% year-over-year increase. However, net income attributable to owners of the parent company declined by 29.6% to 70,609 million yen, largely due to a significant 44,425 million yen impairment loss on equity method investments, specifically related to Brothers International, LLC, alongside rising operating costs. Despite this, the company maintains a robust financial position with an equity ratio of 81.6% and continues to prioritize shareholder value through share repurchases, treasury stock retirements, and a consistent dividend policy.

Governance and risk management remain central to the company’s strategy. The board utilizes a Compensation Committee and an Audit and Supervisory Committee to ensure transparency and align executive incentives with long-term performance metrics, such as consolidated operating income and relative Total Shareholder Return. Operationally, the company faces significant risks, including intense market competition, regulatory scrutiny regarding loot boxes and juvenile protection, and the inherent volatility of the global gaming market. To mitigate these challenges, the company employs a rigorous internal control framework and maintains a diversified portfolio of financial assets, ensuring it remains well-positioned to navigate future economic uncertainties while pursuing sustainable growth across multiple platforms.