Nexon Q3 2018 Financial Results: Record Results and Strategic Investment

Key insights

6 takeaways

01
Nexon achieved record Q3 2018 revenues of 69.3 billion yen, marking a 15% year-over-year increase, with an operating income of 23.7 billion yen.See it on page 2
02
Growth was primarily driven by the National Day update for Dungeon&Fighter in China and the strong performance of MapleStory in Korea.See it on page 1
03
Revenues in North America, Europe, and other regions more than doubled year-over-year, bolstered by the global launches of MapleStory M and Darkness Rises, alongside contributions from Pixelberry Studios.See it on page 1
04
Nexon invested in Embark Studios AB, securing an equity stake and worldwide publishing rights to focus on next-generation gaming technologies like AI and cloud computing, with Patrick Söderlund joining the Board of Directors.See it on page 1
05
Operating income was negatively impacted by a 7.3 billion yen impairment loss related to the goodwill and intellectual property of NAT Games.See it on page 2
06
The company projects Q4 2018 revenues to range between 45.9 and 50.0 billion yen, maintaining a cautious outlook for the remainder of the year.See it on page 2

Summary

Nexon’s third quarter 2018 financial results demonstrate strong global growth, characterized by record revenues and a strategic pivot toward future interactive technologies. The company reported revenues of 69.3 billion yen, representing a 15% year-over-year increase, alongside an operating income of 23.7 billion yen. This performance was primarily fueled by the sustained success of core franchises, specifically the National Day update for Dungeon&Fighter in China and the robust performance of MapleStory in Korea. Additionally, the company saw significant expansion in North America, Europe, and other regions, where revenues more than doubled compared to the previous year, supported by the global launches of MapleStory M, Darkness Rises, and the contributions of Pixelberry Studios.

Beyond financial performance, the quarter marked a significant strategic expansion through an investment in Embark Studios AB. This partnership includes an equity stake and a worldwide publishing agreement, signaling a long-term commitment to developing next-generation gaming experiences utilizing artificial intelligence and cloud computing. As part of this integration, industry veteran Patrick Söderlund has been nominated to join the Board of Directors.

While the company achieved record results, the operating income was impacted by a 7.3 billion yen impairment loss related to NAT Games’ goodwill and intellectual property. Looking ahead to the fourth quarter of 2018, the company maintains a cautious outlook, projecting revenues between 45.9 and 50.0 billion yen. These results reflect a global operation spanning over 190 countries, with the company continuing to leverage its portfolio of more than 80 live games to maintain its position as a leader in the online gaming industry.