NEXON Investor Presentation: FY2011

Key insights

6 takeaways

01
NEXON reported FY2011 consolidated revenue of JPY 87.6 billion, a 26% year-over-year increase, with an operating margin of 44% and a net income margin of 29%.See it on page 18
02
The company’s revenue is heavily concentrated in China and Korea, which accounted for 37.4% and 32.7% of total revenue, respectively.See it on page 18
03
Core franchises remain highly lucrative, with MapleStory and Dungeon & Fighter achieving cumulative gross revenues of over $1.5 billion and $1.8 billion.See it on page 14
04
NEXON operates a massive global footprint with 1.3 billion registered accounts and 80 million monthly active users across more than 100 countries.See it on page 5
05
Portfolio performance was strong in 2011, with eight key titles showing revenue growth and seven of those reaching record-high annual performance.See it on page 16
06
The company projects continued growth for 2012, forecasting a 17% revenue increase to JPY 102.1 billion while expanding into mobile and social network platforms.See it on page 28

Summary

NEXON’s 2011 fiscal year investor presentation outlines the company’s position as a global leader in the free-to-play (F2P) online gaming sector. The primary thesis centers on the company’s ability to leverage a high-growth, immersive game portfolio to drive consistent revenue through a model characterized by long-term user retention and monetization of virtual items. By focusing on internal development, strategic localization, and geographic expansion, the company maintains a scalable business model that contrasts with the shorter life cycles of traditional packaged goods.

Financial performance for fiscal year 2011 was robust, with consolidated revenue reaching JPY 87.6 billion, representing a 26% year-over-year increase. The company achieved record-high profitability, reporting an operating margin of 44% and a net income margin of 29%. Growth was broad-based, with revenue increases recorded across all geographic regions, including significant contributions from China (37.4% of total revenue) and Korea (32.7%). The company’s portfolio strategy proved effective, as eight key titles saw revenue growth, with seven of those achieving record-high annual performance. Key titles such as MapleStory and Dungeon & Fighter remain central to this success, with cumulative gross revenues for these franchises reaching over $1.5 billion and $1.8 billion, respectively.

The scope of operations spans over 100 countries, supported by a massive user base of 1.3 billion registered accounts and 80 million monthly active users. Moving forward, the company’s strategy emphasizes the continued expansion of its platform reach, including mobile and social network integration, alongside the launch of new titles like Cyphers and Mabinogi Heroes. The 2012 forecast projects continued growth, with an anticipated revenue increase of 17% to JPY 102.1 billion, underscoring a commitment to sustaining its competitive advantage in the global online games market.