NEXON Consolidated Financial Results: Three Months Ended March 31, 2020

Key insights

7 takeaways

01
Nexon reported a Q1 2020 revenue of 82,762 million yen, an 11.1% year-over-year decline, and an operating income of 41,543 million yen, a 21.0% decrease.See it on page 6
02
The revenue downturn was primarily driven by the COVID-19 pandemic, which caused significant operational disruptions to PC cafés in the critical Chinese market.See it on page 5
03
Despite regional headwinds, the company maintained a strong cash position of 275,144 million yen and nearly doubled net cash provided by operating activities to 29,548 million yen.See it on page 15
04
Strategic capital allocation during the quarter included the retirement of over 20 million shares of treasury stock and the issuance of dividend payments.See it on page 16
05
Core titles MapleStory and Dungeon&Fighter provided operational stability, particularly within the Korean market.See it on page 8
06
Nexon projects revenue between 141,806 million and 146,770 million yen for the first half of 2020, supported by established franchises and new mobile title launches.See it on page 7
07
The company implemented new administrative protocols for stock acquisition rights to protect shareholder value against market volatility and potential corporate restructuring.See it on page 21

Summary

Nexon experienced a challenging first quarter in 2020, characterized by a year-over-year revenue decline of 11.1 percent to 82,762 million yen and a 21.0 percent reduction in operating income to 41,543 million yen. This downturn was largely attributed to the global COVID-19 pandemic, which severely disrupted PC café operations in China, a critical market for the company. Despite these regional headwinds, the firm maintained operational resilience through the sustained popularity of core titles such as MapleStory and Dungeon&Fighter, particularly within the Korean market.

Financial management remained a priority during this period, as evidenced by a significant improvement in net cash provided by operating activities, which rose to 29,548 million yen from 15,241 million yen in the previous year. While the company recorded a net cash outflow of 4,177 million yen, this was a deliberate result of strategic capital allocation, including dividend payments and the retirement of over 20 million shares of treasury stock. With a robust cash position of 275,144 million yen, the company remains well-capitalized despite broader economic uncertainties.

Looking ahead, the company maintains a cautious but optimistic outlook for the first half of 2020, projecting revenue between 141,806 million and 146,770 million yen. Growth strategies center on the continued performance of established franchises and the introduction of new mobile titles. Furthermore, the company has reinforced its administrative framework for stock acquisition rights, establishing clear protocols for equity adjustments to protect shareholder value against market volatility, corporate restructuring, or future share issuances. These measures reflect a commitment to maintaining long-term equity stability while navigating the immediate impacts of the global health crisis on the gaming industry.