The First Descendant: Earnings Letter Q2 2024

Nexon’s Q2 2024 performance reflects a successful execution of its IP Growth Initiative, a strategy focused on expanding established franchises into new platforms and markets while simultaneously developing new intellectual properties. The company achieved record-high quarterly results, with revenue reaching ¥122.5 billion, a 30% year-over-year increase, and operating income rising 64% to ¥45.2 billion. These results were primarily driven by the launch of Dungeon&Fighter Mobile in China, which sustained a top-grossing position for over 11 weeks, and the successful debut of the new IP, The First Descendant.

The company’s methodology relies on leveraging its live operations capabilities to re-engage dormant fan bases and attract new players. The Dungeon&Fighter franchise, which has generated over $22 billion in lifetime revenue, saw its franchise-wide revenue more than double year-over-year. Similarly, the MapleStory franchise achieved 9% growth, bolstered by a 30% increase in PC revenue outside of Korea and a 43% increase in mobile revenue worldwide. These efforts are supported by a global operational footprint, with production hubs in Korea and localized development teams in Western markets.

Looking toward Q3, the company anticipates continued growth, projecting revenues between ¥137.8 billion and ¥152.0 billion. While management expects some year-over-year declines in specific legacy titles due to challenging comparisons with record-breaking 2023 performance, the pipeline remains robust. Upcoming initiatives include the 2025 release of The First Berserker: Khazan, the continued expansion of the MapleStory Universe, and new publishing agreements with Tencent to bring titles like THE FINALS and ARC Raiders to the Chinese market. Capital allocation remains disciplined, with a share repurchase program of ¥100 billion currently underway.