Nexon Q3 2016 Investor Presentation

Key insights

6 takeaways

01
Nexon reported Q3 2016 revenue of ¥44.26 billion and operating income of ¥16.29 billion, both exceeding internal projections.See it on page 8
02
While as-reported revenue declined 11% year-over-year due to foreign exchange fluctuations, the company achieved 4% growth when adjusted for currency impacts.See it on page 16
03
Flagship PC titles MapleStory and Dungeon&Fighter remain the primary revenue drivers for the company in the Korean and Chinese markets.See it on page 12
04
The company is actively diversifying its portfolio by shifting toward mobile gaming and expanding its global reach with projects like the mobile version of Dungeon&Fighter and the shooter LawBreakers.See it on page 20
05
Nexon executed a ¥5 billion share repurchase program during the third quarter, reflecting a disciplined approach to capital allocation.See it on page 19
06
Management is prioritizing the balance of monetizing established intellectual property with targeted investments in mobile segments to mitigate regional market risks.See it on page 32

Summary

Nexon’s financial performance for the third quarter of 2016 demonstrates a resilient core business model despite significant macroeconomic headwinds. The company achieved revenue of ¥44.26 billion and an operating income of ¥16.29 billion, results that surpassed internal outlooks. While as-reported revenues experienced an 11% year-over-year decline, this contraction was primarily driven by unfavorable foreign exchange fluctuations. When adjusted for these currency impacts, the company actually realized a 4% growth in revenue, underscoring the underlying stability of its primary assets.

The company’s growth remains anchored by the sustained popularity of flagship PC titles, specifically MapleStory and Dungeon&Fighter, which continue to serve as the primary revenue engines in the critical Korean and Chinese markets. To mitigate reliance on legacy PC franchises, the firm is aggressively pivoting toward a diversified mobile portfolio and expanding its global footprint. This strategic transition is supported by a robust development pipeline featuring high-profile projects such as the mobile iteration of Dungeon&Fighter and the shooter title LawBreakers.

Beyond immediate operational results, the company maintains a disciplined approach to capital allocation, evidenced by the successful completion of a ¥5 billion share repurchase program during the quarter. Looking ahead, the organization remains focused on navigating regional market risks and executing its long-term expansion strategy. By balancing the monetization of established intellectual property with targeted investments in emerging mobile segments, the company aims to sustain its competitive position within the global interactive entertainment industry throughout the remainder of the 2016 fiscal year and beyond.