Nexon FY2016 Q3 Earnings Conference Call: Summary of Q&As

Key insights

7 takeaways

01
Nexon is prioritizing long-term quality over immediate monetization, resulting in the deferral of key titles like Dungeon & Fighter: Spirit and the delay of the Chinese mobile Dungeon&Fighter closed beta to the following year.See it on page 4
02
Performance in the Korean PC market was mixed, with significant year-over-year declines for Sudden Attack and FIFA Online 3 offset by the sustained stability of legacy titles MapleStory and Dungeon&Fighter.See it on page 2
03
The Chinese market outlook for Q4 2016 remains positive on a constant currency basis, supported by a strategic focus on content updates rather than aggressive monetization tactics.See it on page 1
04
FIFA Online 3 Mobile saw a performance recovery in September 2016, driven primarily by engine updates and seasonal in-game events.See it on page 2
05
Nexon is actively calibrating marketing strategies for new Japanese releases like HIDE AND FIRE based on specific market preferences and key performance indicators.See it on page 4
06
The company’s future development pipeline includes the upcoming titles DARK AVENGER 3, Project Dynasty Warriors, and HYPER UNIVERSE.See it on page 3
07
As of the end of Q3 2016, Nexon reported no immediate indicators of impairment losses, though the company noted these assessments remain subject to change in the final quarter.See it on page 3

Summary

Nexon’s fiscal year 2016 third-quarter earnings discussion focuses on the performance of its core PC and mobile titles across Korea, China, and Japan, while outlining strategic adjustments for its development pipeline. The company emphasizes a long-term commitment to high-quality game development over immediate monetization, noting that current pipeline strength is the result of over two years of internal and external development efforts.

Performance in the Korean PC market saw significant year-over-year declines for Sudden Attack and FIFA Online 3, though these were offset by the continued strength of legacy titles like MapleStory and Dungeon&Fighter. In the mobile sector, FIFA Online 3 Mobile experienced a recovery in September following engine updates and seasonal events. Meanwhile, the Chinese market outlook for the fourth quarter remains positive on a constant currency basis, despite a strategic shift toward content updates rather than aggressive monetization.

The company’s mobile pipeline faces minor delays as it prioritizes quality control. Specifically, the closed beta test for the 2D mobile version of Dungeon&Fighter in China has been pushed to the following year, potentially impacting the official launch timeline. Similarly, the release of Dungeon & Fighter: Spirit may be deferred to ensure game quality meets internal standards following feedback from recent testing.

Looking ahead, Nexon maintains a robust development schedule, with upcoming titles such as DARK AVENGER 3, Project Dynasty Warriors, and HYPER UNIVERSE. While the company reports no immediate indicators of impairment losses as of the third quarter, it acknowledges that such assessments remain subject to change during the final quarter. The firm continues to evaluate the performance of new releases like HIDE AND FIRE in Japan, where marketing efforts are being calibrated based on key performance indicators and specific market preferences.