Nexon Second Quarter 2013 Financial Results

Key insights

6 takeaways

01
Nexon reported a 60% year-over-year revenue increase to 36.6 billion yen for Q2 2013, with operating income rising 21% and net income growing 54%.See it on page 1
02
Mobile revenue served as a primary growth driver, surging more than 40-fold compared to the same period in the previous year.See it on page 2
03
China and Korea remained core markets, with revenues increasing by 44% and 38% respectively, fueled by titles such as Dungeon&Fighter, FIFA Online 3, and Sudden Attack.See it on page 2
04
Japan experienced a 233% revenue spike during the quarter, primarily driven by strategic mobile acquisitions.See it on page 2
05
North American revenue declined by 5% as the company pivoted toward long-term investments in U.S.-based development studios.See it on page 2
06
Management projects continued revenue growth for Q3 2013, citing a robust content pipeline and the favorable impact of a weak Japanese yen.See it on page 2

Summary

Nexon’s financial results for the second quarter of 2013 demonstrate significant growth driven by the expansion of its free-to-play portfolio across both PC and mobile platforms. The company reported a 60% year-over-year increase in total revenue, reaching 36.6 billion yen, alongside a 21% rise in operating income and a 54% increase in net income. This performance exceeded the company’s internal outlook, bolstered by strong contributions from key titles in China and Korea and a substantial surge in mobile revenue, which grew over 40-fold compared to the same period in the previous year.

Geographically, the company experienced varied performance across its primary markets. China remained a major growth engine with a 44% revenue increase, supported by the strong performance of Dungeon&Fighter. Korea returned to a growth trajectory with a 38% revenue increase, led by the success of FIFA Online 3 and Sudden Attack. Japan saw a 233% revenue spike, largely attributed to strategic mobile acquisitions, while North American revenues declined by 5% as the company shifted focus toward long-term strategic investments in U.S.-based development studios to better penetrate Western markets.

The company’s financial reporting for this period reflects its transition to International Financial Reporting Standards (IFRS). Looking ahead, the company maintains a positive outlook for the third quarter of 2013, projecting continued revenue growth supported by a robust pipeline of PC and mobile content. Management anticipates that the ongoing weakness of the Japanese yen will continue to provide a favorable tailwind for year-over-year revenue comparisons, reinforcing the company's commitment to scaling its global free-to-play operations.