[KH Explains] Why Nexon shines alone in Q2

Strong intellectual property, success of new titles drive Nexon’s increased earnings

Nexon headquarters in Gyeonggi Province (Nexon)

Nexon has come out on top in second quarter earnings among major Korean game developers, becoming the only company to post on-year growth in both sales and operating profits during the period.

Nexon on Wednesday reported 902.8 billion won ($685.3 million) in sales and 264 billion won in operating profit in the April-to-June period, up 12 percent and 22 percent on year, respectively. The game maker thrived in the second quarter thanks to the success of strong intellectual properties and new titles.

Nexon’s signature football game FIFA Online 4, which has continued to post record sales for the sixth consecutive month now, led computer game sales. The company added that its mobile football game FIFA Mobile logged more revenues than expected as the game built on the growing trend in the wake of the 2022 World Cup held in Qatar at the end of last year.

Dungeon & Fighter, a fast-paced 2D anime-style side-scrolling action game, saw the number of monthly active users improve as Nexon focused on user satisfaction by offering live service management.

Wars of Prasia, Nexon’s highly-anticipated massively multiplayer online role-playing game, or MMORPG, that could be played on both computer and mobile as a cross-platform game, was officially launched at the end of March. According to the game maker, Wars of Prasia is poised to have long-term success as its active user numbers and sales figures went up in May, about a month after the release. Nexon also pointed out that the new game has a higher proportion of players in their 20s and 30s, unlike other traditional MMORPGs that have older players.

“In the second quarter this year, we were able to achieve balanced growth with the harmonious performance of new IP and live services,” said Owen Mahoney, CEO of Nexon. “We will continue to make efforts to provide differentiated games to users through new cross-platform titles in various genres.”

Meanwhile, Korea’s other major game developers -- Com2uS, DoubleU Games, Kakao Games, Krafton, Neowiz, NCSoft, Netmarble, PearlAbyss and Wemade -- failed to log improved on-year figures in both categories during the same period.

NCSoft and Netmarble -- two of the country’s three biggest game makers along with Nexon -- saw weak numbers from their mobile-heavy portfolios.

NCSoft, best known for the popular MMORPG series Lineage, posted 440.2 billion won in sales and 35.3 billion won in operating profit, down 30 percent and 71 percent on year, respectively. In particular, mobile MMORPG Lineage W, which has served as the company’s cash cow since its launch in 2021, saw its sales cut in half. The game maker pointed to various Lineage-like games that have flooded the market as a reason behind the ailing numbers.

Netmarble logged 603.3 billion won in sales, down 8.7 percent on year, and an operating loss of 37.2 billion won, a further drop from the operating loss of 34.7 billion won from the same period a year ago. Netmarble said it recorded poor performances in the first half of this year due to the lack of new titles and decreased sales from existing games. The company added that it expects to turn around the ongoing operating losses with new titles scheduled to be released in the second half of this year.

By Kan Hyeong-woo(hwkan@heraldcorp.com)