NEXON Q3 2013 Investor Presentation

Key insights

6 takeaways

01
Nexon reported Q3 2013 consolidated revenues of ¥39.9 billion, a 64% year-over-year increase, and an operating income of ¥16.2 billion with a 40.7% margin.See it on page 4
02
Revenue in Japan grew by 171% year-over-year, driven primarily by mobile acquisitions and new co-developed titles.See it on page 11
03
In China, Dungeon&Fighter maintained stable revenue despite a decline in monthly active users by increasing the average revenue per paying user.See it on page 9
04
Growth in Korea was accelerated by the strong performance of key titles FIFA Online 3 and Sudden Attack.See it on page 10
05
Due to modest performance in North America and Europe, the company is shifting its strategy toward equity investments in Western studios, such as Shiver Entertainment, to secure content.See it on page 12
06
The company projects a Q4 2013 operating margin between 21% and 24%, reflecting increased marketing and royalty costs for new game launches.See it on page 16

Summary

Nexon’s third-quarter 2013 investor presentation outlines a period of significant financial expansion, characterized by strong revenue growth and a strategic pivot toward global market diversification. The company reported consolidated revenues of ¥39.9 billion, representing a 64% year-over-year increase, or 36% on a constant currency basis. Operating income reached ¥16.2 billion, reflecting a 53% year-over-year improvement and a robust operating margin of 40.7%. These results exceeded the high end of the company’s previous guidance, bolstered in part by favorable foreign exchange tailwinds.

Performance was driven by stable operations in China, where titles like Dungeon&Fighter maintained consistent revenue despite a decline in monthly active users, offset by higher average revenue per paying user. In Korea, the company experienced an accelerated growth trajectory fueled by the success of FIFA Online 3 and Sudden Attack. Japan’s performance was marked by a 171% revenue increase, largely attributed to mobile acquisitions and the release of new co-developed titles. Conversely, the company’s efforts in North America and Europe remained modest, prompting a strategic shift toward equity investments in Western development studios, such as Shiver Entertainment, to secure high-quality content for global audiences.

The company’s methodology relies on IFRS-compliant consolidated financial data, supplemented by key performance indicators including monthly active users, pay rates, and average revenue per paying user. Looking ahead, Nexon maintains a focus on expanding its mobile footprint and leveraging its free-to-play expertise to integrate Western-developed content into its global platform. The outlook for the fourth quarter of 2013 anticipates continued investment in new titles and infrastructure, with an expected operating margin between 21% and 24% as the company balances marketing costs and royalty obligations for new game launches.