Nexon Consolidated Financial Results for the Third Quarter Ended September 30, 2012

Key insights

7 takeaways

01
Nexon reported strong nine-month growth with net sales of ¥77,510 million (up 18.5% year-over-year) and an operating income of ¥38,096 million (up 31.8%).See it on page 3
02
The company finalized the acquisition of mobile developer gloops, Inc. for ¥36,516 million in cash to accelerate its expansion into the Japanese mobile gaming market.See it on page 11
03
The Korea segment acted as the primary financial engine, generating ¥60,260 million in net sales and ¥35,862 million in segment income, supported by titles like Sudden Attack, Cyphers, and Dungeon&Fighter royalties.See it on page 3
04
Nexon revised its full-year net sales outlook to a range of ¥104,973 million to ¥108,210 million to account for global market dynamics and the integration of gloops, Inc.See it on page 3
05
The North American segment recorded a net loss of ¥397 million, primarily due to the lingering effects of a security breach involving the MapleStory title.See it on page 3
06
Total assets increased significantly to ¥292,408 million as of September 30, 2012, compared to ¥235,765 million at the end of 2011, driven largely by an increase in investment securities.See it on page 3
07
The Japan segment experienced a slight decline in net sales to ¥9,142 million, a result attributed to higher marketing expenditures during the period.See it on page 3

Summary

Nexon’s consolidated financial results for the nine-month period ending September 30, 2012, demonstrate strong growth in the company’s online and mobile gaming operations. The primary objective of the report is to detail the company’s financial performance and strategic expansion, specifically highlighting the acquisition of the mobile game developer gloops, Inc. to bolster its presence in the Japanese mobile market. The company reported net sales of ¥77,510 million, representing an 18.5% year-over-year increase, alongside an operating income of ¥38,096 million, a 31.8% increase compared to the same period in 2011.

Performance varied significantly across geographic segments. The Korea segment served as a primary growth engine, contributing ¥60,260 million in net sales and ¥35,862 million in segment income, driven by the success of titles like Sudden Attack and Cyphers, as well as increased royalty income from Dungeon&Fighter in China. Conversely, the North American segment faced challenges, recording a net loss of ¥397 million, largely attributed to the lingering impact of a hacking incident involving MapleStory. The Japan segment saw a slight decline in net sales to ¥9,142 million, impacted by increased marketing expenditures.

The company’s financial position remains robust, with total assets rising to ¥292,408 million from ¥235,765 million at the end of 2011, bolstered by an increase in investment securities. Following the close of the third quarter, Nexon finalized the acquisition of gloops, Inc. for ¥36,516 million in cash, a strategic move intended to leverage Nexon’s operational capacity and user base to capture growth in the mobile gaming sector. Due to the dynamic nature of the global market and the integration of this new acquisition, the company revised its full-year outlook, projecting net sales between ¥104,973 million and ¥108,210 million.