Nexon Q4 2020 Investor Presentation

Key insights

6 takeaways

01
Nexon achieved record annual revenue of ¥293 billion in 2020, representing an 18% year-over-year increase driven by core franchises like MapleStory, Dungeon&Fighter, KartRider, and Sudden Attack.See it on page 16
02
Mobile platforms became a significant growth engine, accounting for 33% of total annual revenue and experiencing a 60% surge compared to the previous year.See it on page 17
03
Despite a 35% year-over-year revenue increase in Q4 2020, the company reported a net loss of ¥29.78 billion due to deferred tax liabilities and foreign exchange costs rather than operational issues.See it on page 10
04
Korea remains the company's primary market, contributing 56% of total annual revenue.See it on page 29
05
The company maintains a strong financial foundation with ¥137.6 billion in annual operating cash flow, supporting continued investment in new intellectual property and multi-platform expansion.See it on page 32
06
Management anticipates potential Q1 2021 headwinds, specifically citing declining performance in the Chinese market and rising operational costs.See it on page 20

Summary

Nexon achieved record-breaking financial performance throughout 2020, generating ¥293 billion in annual revenue, an 18% increase over the previous year. This growth was underpinned by a strategic focus on cultivating massive, long-term virtual worlds, with core franchises such as MapleStory, Dungeon&Fighter, KartRider, and Sudden Attack serving as the primary engines for sustained profitability. These titles have collectively generated over $1.9 billion in lifetime revenue, demonstrating the enduring appeal of the company’s established intellectual property.

The company’s operational strategy successfully transitioned these core franchises onto mobile platforms, which accounted for 33% of total annual revenue and experienced a 60% surge compared to the prior year. Geographically, Korea remains the dominant market, contributing 56% of total revenue. While the fourth quarter saw a 35% year-over-year revenue increase, the company reported a net loss of ¥29.78 billion for the period. This quarterly deficit was primarily attributed to significant deferred tax liabilities and foreign exchange-related finance costs rather than operational underperformance.

Looking toward the future, the company remains committed to its strategy of prioritizing fewer, larger virtual worlds to drive multi-platform expansion. While management anticipates continued strength in the Korean market for the first quarter of 2021, they remain cautious regarding potential revenue offsets stemming from declining performance in the Chinese market and rising operational costs. Despite these short-term headwinds, the company maintains a robust financial position, evidenced by annual operating cash flow reaching ¥137.6 billion, providing a stable foundation for ongoing investments in new intellectual property and continued growth across global markets.