Nexon Q2 2015 Earnings Call

Key insights

6 takeaways

01
Nexon reported a 12 percent year-over-year revenue increase to JPY 94.6 billion and a 56 percent rise in net income for the first half of 2015.See it on page 3
02
The company successfully shifted its mobile revenue mix, with native mobile applications now accounting for approximately two-thirds of total mobile earnings.See it on page 4
03
Core PC franchises, specifically Dungeon&Fighter and MapleStory, remain the primary drivers of the company's financial performance.See it on page 3
04
The Japanese market experienced a 29 percent year-over-year revenue decline, contrasting with growth in North America and Europe driven by the mobile title DomiNations.See it on page 5
05
Management is prioritizing a strategy focused on live game operations, original IP development, and publishing partnerships with major entities including EA, Square Enix, and Warner Bros.See it on page 10
06
The company is actively transitioning away from browser-based content to mitigate the structural decline of that market segment.See it on page 10

Summary

Nexon achieved robust financial growth during the first half of 2015, characterized by a 12 percent year-over-year revenue increase to JPY 94.6 billion and a substantial 56 percent rise in net income. This performance stems from the enduring popularity of core PC franchises such as Dungeon&Fighter and MapleStory, complemented by a strategic pivot toward high-quality mobile gaming. By prioritizing native mobile applications over browser-based content, the company successfully transitioned its mobile revenue mix, with native titles now representing approximately two-thirds of total mobile earnings.

Geographically, the company experienced divergent results across its global operations. North American and European markets saw significant momentum fueled by the successful launch of the mobile title DomiNations. In contrast, the Japanese segment faced a 29 percent year-over-year revenue decline, highlighting regional volatility. Despite these localized challenges, the company maintains a positive outlook for the third quarter, supported by a robust pipeline of new PC and mobile releases and increased marketing expenditures intended to sustain long-term growth.

Management remains committed to a three-pronged strategy centered on the rigorous optimization of live game operations, the development of original intellectual property, and the expansion of publishing partnerships with major global entities like EA, Square Enix, and Warner Bros. By focusing on the stability and longevity of its live services, the company aims to navigate the structural decline of the browser game market. This approach emphasizes platform convergence and operational excellence as the primary drivers for maintaining a competitive advantage within the evolving global digital entertainment landscape.