Nexon Q3 2020 Earnings Prepared Remarks

Key insights

6 takeaways

01
Nexon achieved record-breaking Q3 2020 performance with a 52 percent year-over-year revenue increase.See it on page 2
02
Mobile revenue grew to 42 percent of total group earnings, up from 26 percent in the previous year, driven by the successful transition of franchises like MapleStory, Dungeon&Fighter, and KartRider.See it on page 2
03
Operating income rose 13 percent year-over-year, despite the postponement of the Mobile Dungeon&Fighter launch in China.See it on page 5
04
Performance in Korea was a primary growth driver, bolstered by the release of The Kingdom of the Winds: Yeon and sustained strength in core PC titles.See it on page 6
05
The company maintains a strong financial position with over $1 billion in annual operating cash, enabling a newly authorized 100 billion yen stock repurchase program.See it on page 11
06
Revenue declines in China, caused by the mobile launch delay and PC user metric stabilization, were offset by strong growth in North America, Europe, and other global regions.See it on page 8

Summary

Nexon’s third quarter of 2020 marked a record-breaking performance, characterized by a 52 percent year-over-year revenue increase. The company’s primary thesis centers on its leadership in the Virtual Worlds segment—deeply immersive, multiplayer online games—and the successful execution of a strategy to transition these long-standing franchises onto mobile platforms. By leveraging established intellectual property such as MapleStory, Dungeon&Fighter, and KartRider, the company has significantly expanded its total addressable market, with mobile revenue now accounting for 42 percent of total group earnings, up from 26 percent the previous year.

Key financial findings for the quarter include record-high operating income, which grew 13 percent year-over-year despite the postponement of the highly anticipated Mobile Dungeon&Fighter launch in China. Performance in Korea was particularly robust, driven by the successful release of The Kingdom of the Winds: Yeon and sustained growth in core PC titles. While China’s revenue declined due to the delayed mobile launch and ongoing efforts to stabilize user metrics for the PC version of Dungeon&Fighter, strong results in North America, Europe, and the rest of the world helped offset these regional challenges.

The company maintains a long-term operational philosophy that prioritizes multi-year franchise durability over short-term launch success. This approach is supported by a diversified portfolio that generates over $1 billion in annual operating cash, providing the financial flexibility to invest in new titles and global entertainment companies. Looking ahead, the company remains committed to its strategy of platform expansion and content innovation, supported by a newly authorized 100 billion yen stock repurchase program, as it seeks to solidify its position as a global entertainment powerhouse.