Nexon Second Quarter 2016 Financial Results

Key insights

6 takeaways

01
Nexon reported Q2 2016 revenue of 38.1 billion yen, marking an 11% decline as-reported but a 4% increase on a constant currency basis.See it on page 1
02
Operating income reached 13.4 billion yen, hitting the high end of internal projections despite significant headwinds from the appreciation of the Japanese yen.See it on page 1
03
Net income fell to 7.6 billion yen, missing expectations due to foreign exchange losses on U.S. dollar-denominated cash holdings.See it on page 1
04
The company expanded its development pipeline by acquiring mobile developer wellgames and forming a partnership with Sansho Studios.See it on page 1
05
Nexon is prioritizing growth through upcoming titles including MapleStoryM, LawBreakers, and Moonlight Blade.See it on page 1
06
Q3 2016 revenue is projected to be between 38.4 and 41.3 billion yen, supported by a mix of established PC online games and an expanding mobile portfolio.See it on page 1

Summary

Nexon’s financial results for the second quarter of 2016 demonstrate resilient operational performance despite significant headwinds from the appreciation of the Japanese yen. The company reported quarterly revenues of 38.1 billion yen, representing an 11% decline on an as-reported basis but a 4% increase when adjusted for constant currency. Operating income reached 13.4 billion yen, landing at the high end of the company’s internal projections. However, net income attributable to owners of the parent fell short of expectations at 7.6 billion yen, a result primarily attributed to foreign exchange losses on U.S. dollar-denominated cash holdings.

The company’s strategic focus remains centered on expanding its global footprint through high-quality partnerships and targeted acquisitions. Key developments during the period included a new partnership with Sansho Studios and the acquisition of wellgames, the developer behind the mobile first-person shooter Special Soldier. These moves are designed to bolster a robust pipeline of upcoming PC and mobile titles, including MapleStoryM, LawBreakers, and Moonlight Blade, which are intended to drive growth throughout the remainder of 2016 and beyond.

Looking ahead to the third quarter of 2016, the company maintains a positive outlook, projecting revenues between 38.4 and 41.3 billion yen. This forecast anticipates a continued split between established PC online gaming revenue and an expanding mobile portfolio. By leveraging its expertise in the free-to-play business model across more than 190 countries, the company aims to sustain its market position while navigating global currency volatility and evolving player demands in the competitive online and mobile gaming sectors.