Nexon Earnings for First Quarter 2022

Key insights

6 takeaways

01
Nexon reported Q1 2022 revenue of ¥91.0 billion, a 3% year-over-year increase, while net income reached ¥40.3 billion, heavily supported by a ¥12.7 billion foreign exchange gain.See it on page 1
02
The launch of Dungeon&Fighter Mobile in Korea drove significant growth, contributing to a 20% increase in daily active users for the existing PC version of the franchise.See it on page 2
03
Operating income fell 11% to ¥38.5 billion, primarily due to increased royalty and payment gateway costs associated with higher sales volume.See it on page 1
04
FIFA ONLINE 4 achieved record-high quarterly sales in Korea, serving as a key pillar for revenue stability alongside the company's mobile expansion.See it on page 1
05
Management projects strong momentum for Q2 2022, forecasting year-over-year revenue growth between 45% and 56%.See it on page 2
06
Future growth strategy centers on a global pipeline including the upcoming release of KartRider: Drift and new titles from the Stockholm-based Embark Studios.See it on page 2

Summary

Nexon’s financial results for the first quarter of 2022 demonstrate a period of strategic growth driven by the successful launch of new mobile titles and the sustained performance of core franchises. The company reported quarterly revenues of ¥91.0 billion, representing a 3% year-over-year increase. While operating income declined by 11% to ¥38.5 billion due to higher royalty and payment gateway costs associated with strong sales, net income reached ¥40.3 billion, bolstered significantly by a ¥12.7 billion foreign exchange gain.

The primary catalyst for this performance was the launch of Dungeon&Fighter Mobile in Korea, which achieved top-grossing status on major app stores. Notably, the mobile release did not cannibalize the existing PC franchise; instead, it contributed to a 20% increase in daily active users for the PC version. Additionally, FIFA ONLINE 4 achieved record-high quarterly sales in Korea, further stabilizing the company’s revenue streams. While regional performance varied—with growth in the "Rest of World" segment contrasting with minor declines in North America, Europe, and Japan—the company maintains a positive outlook for the remainder of the year.

Nexon’s business model remains focused on long-term stability through disciplined cost management and a robust cash position, which the company asserts provides insulation against inflation and supply chain volatility. Looking ahead, the company is prioritizing its global pipeline, including the upcoming releases of KartRider: Drift and new titles from its Stockholm-based Embark Studios. Management expects continued momentum throughout 2022, projecting second-quarter revenues to increase by 45% to 56% year-over-year as it continues to expand its portfolio of virtual worlds across global markets.