NEXON Q1 2013 Investor Presentation

Key insights

6 takeaways

01
Nexon reported Q1 2013 revenue of ¥44.4 billion, a 46% year-over-year increase that exceeded the company's initial outlook.See it on page 4
02
Operating income rose 24% to ¥20.7 billion, though the operating margin adjusted to 47% due to increased mobile segment revenue, higher development costs, and royalty payments.See it on page 18
03
China remained the primary revenue driver at 46% of the total, supported by content updates for Dungeon&Fighter, followed by Korea at 24% and Japan at 22%.See it on page 12
04
Mobile revenue experienced explosive growth, increasing 33.1 times year-over-year as the company expanded its presence in the mobile gaming sector.See it on page 14
05
The company maintained a monthly active user base of 71.5 million with an average revenue per paying user (ARPPU) of ¥2,532.See it on page 6
06
Financial performance was bolstered by the successful launch of FIFA Online 3 in Korea and favorable currency trends resulting from the weakening Japanese yen.See it on page 3

Summary

Nexon’s first-quarter 2013 performance demonstrated significant growth, exceeding the high end of the company’s initial outlook. Total revenue reached ¥44.4 billion, representing a 46% year-over-year increase, while operating income rose 24% to ¥20.7 billion. This growth was supported by strong user engagement in China, particularly through content updates for Dungeon&Fighter, and a successful launch of FIFA Online 3 in Korea. Additionally, the company benefited from favorable currency trends, specifically the weakening of the Japanese yen against the U.S. dollar, South Korean won, and Chinese yuan.

The company transitioned to International Financial Reporting Standards (IFRS) during this period to enhance global financial comparability. While revenue grew across both PC and mobile platforms, the operating margin shifted to 47%, influenced by a higher proportion of revenue coming from the lower-margin mobile segment, increased development and support costs for new titles, and higher royalty payments associated with licensed games. Mobile revenue specifically saw a substantial increase, growing 33.1 times year-over-year.

Geographically, China remained the largest revenue contributor, accounting for 46% of total revenue, followed by Korea at 24% and Japan at 22%. The company’s operational metrics showed a monthly active user base of 71.5 million, with an average revenue per paying user (ARPPU) of ¥2,532. Looking ahead, Nexon maintains a focus on sustaining momentum through key title updates and strategic investments in mobile and PC gaming, while navigating the complexities of currency fluctuations and the competitive landscape of the global online games industry.