NEXON Q3 2022 Earnings Prepared Remarks

Key insights

6 takeaways

01
Nexon achieved record-breaking Q3 2022 financial results with a 28% year-over-year revenue increase to 97.5 billion yen.See it on page 6
02
The company’s growth is driven by a portfolio strategy focused on 'Forever Franchises' like MapleStory, Mabinogi, and FIFA ONLINE 4, alongside successful mobile launches of Dungeon&Fighter Mobile and HIT2.See it on page 3
03
Nexon is actively rejecting a hits-driven model in favor of live operations and continuous content updates to ensure long-term revenue stability and player retention.See it on page 3
04
The board has authorized a 50 billion yen share repurchase program, signaling management's belief that current market valuations undervalue the company's future earnings potential.See it on page 11
05
Nexon is preparing for further expansion with its largest development pipeline to date, featuring upcoming titles such as THE FINALS, KartRider: Drift, and The First Descendant.See it on page 5
06
Despite projected increases in operating costs due to higher headcount and marketing investments, the company anticipates record-breaking revenue for Q4 and the full year of 2022.See it on page 10

Summary

Nexon’s third-quarter 2022 earnings report highlights a period of record-breaking financial performance, characterized by a 28% year-over-year revenue increase to 97.5 billion yen. The company attributes this growth to the sustained success of its "Forever Franchises"—long-standing virtual worlds such as MapleStory, Mabinogi, and FIFA ONLINE 4—alongside the strong mobile market entry of Dungeon&Fighter Mobile and HIT2. By focusing on high-retention, PC-level experiences on mobile devices, the company has successfully mitigated industry-wide challenges related to user acquisition and monetization.

The company’s strategic thesis rejects the traditional hits-driven model of the gaming industry, favoring a portfolio approach where live operations and continuous content updates drive long-term player engagement and revenue stability. This operational philosophy has resulted in significant growth for legacy titles, with MapleStory and Mabinogi achieving substantial year-over-year revenue gains. Furthermore, the company is preparing for a period of expansion, supported by its most robust development pipeline in history, including upcoming titles such as THE FINALS, KartRider: Drift, and The First Descendant.

Looking ahead, the company projects record-breaking fourth-quarter revenue and anticipates that 2022 will be its most successful year to date. While operating costs are expected to rise due to increased headcount, marketing investments, and development efforts for new properties, management remains confident in the long-term return on these expenditures. To signal this confidence, the board has authorized a 50 billion yen share repurchase program, reflecting a belief that the company’s current valuation does not fully account for the potential earnings growth expected from its upcoming product launches.