Nexon Q4 2021 Investor Presentation

Key insights

6 takeaways

01
Nexon reported an 18% year-over-year revenue decline in Q4 2021, primarily due to difficult comparisons against record-breaking performance in the prior year.See it on page 9
02
The company holds a strong liquidity position with ¥365.2 billion in cash and cash equivalents to fund proprietary technology, IP partnerships, and new titles like Mobile Dungeon&Fighter and ARC Raiders.See it on page 21
03
Q1 2022 revenue is projected to remain flat year-over-year, as growth in the Chinese market is expected to be offset by volatility in Korea.See it on page 16
04
Operating and net income for Q1 2022 face downward pressure from increased marketing and human resources spending, as well as the absence of previous foreign exchange gains.See it on page 19
05
Nexon is pivoting its long-term strategy to focus on developing immersive virtual worlds rather than traditional gaming products to drive user engagement and insulate against market volatility.See it on page 4
06
Core revenue continues to be sustained by long-running franchises including MapleStory and Dungeon&Fighter, which provide the capital necessary for global operations.See it on page 39

Summary

Nexon is currently navigating a transitional period characterized by a strategic pivot toward the development of immersive virtual worlds. While the company experienced an 18 percent year-over-year revenue decline in the fourth quarter of 2021, this contraction is largely attributed to difficult comparisons against record-breaking performance in the prior year. The overarching corporate thesis centers on achieving a step-function growth phase by leveraging a robust liquidity position—evidenced by ¥365.2 billion in cash and cash equivalents—to fund proprietary technology, global IP partnerships, and a pipeline of high-potential titles such as Mobile Dungeon&Fighter and ARC Raiders.

Financial projections for the first quarter of 2022 anticipate flat year-over-year group revenues, as growth within the Chinese market is expected to be neutralized by ongoing volatility in Korea. Operating and net income are forecasted to face downward pressure due to increased human resources and marketing expenditures, alongside the absence of favorable foreign exchange gains that bolstered previous results. Despite these short-term headwinds, the company maintains a stable foundation built upon long-running franchises like MapleStory and Dungeon&Fighter, which continue to provide the necessary capital to sustain operations across global markets.

The long-term strategic vision distinguishes Nexon’s portfolio as a collection of virtual worlds rather than traditional gaming products, emphasizing platform expansion and sustained user engagement. By prioritizing the evolution of these digital ecosystems, the company aims to insulate itself from market volatility and secure long-term revenue growth. This approach reflects a commitment to scaling proprietary intellectual property and technological infrastructure, positioning the firm to capitalize on shifting consumer behaviors within the global interactive entertainment industry throughout 2022 and beyond.