Nexon logs $306.6M operating profit in Q3

Nexon saw a 47% increase in operating profit for Q3 while competitors like NCsoft suffered losses.

Poster for mobile game Blue Archive [NEXON]

Nexon was among the few major gaming outlets enjoying double-digit growth in operating profit for the third quarter while local competitors suffered declining profits or even losses.

Among the “Big 3Ns”— Nexon, NCSoft and Netmarble — Tokyo-listed Nexon showed robust growth for its steady sellers such as mobile games Blue Archive, FC Mobile and Wars of Prasia.

Nexon’s operating profit jumped 47 percent on year to 46.3 billion yen ($306.6 million) for the July-September period, outperforming the market outlook between 36.3 billion yen and 44.5 billion yen.

Revenue was also above the analyst forecast, which rose 23 percent on year to 120.3 billion yen, or 1.9 trillion won.

Net profit lost 15 percent to 35.2 billion yen, but was still higher than market expectations.

By region, Korea, China, Japan, North America and Europe all saw double-digit growth due to its mobile games. Nexon said its PC and console role-playing game (RPG), Dave the Diver, largely contributed to the growth in North America and Europe, which grew 78 percent on year to 8.92 billion yen.

Nexon said that its upcoming online first-person shooter game, The Finals, accumulated 7.5 million players in its open beta test conducted earlier this month. It was developed by the company’s Stockholm-based subsidiary Embark Studios. The online game is garnering high expectations from the game industry, once having reached 270,000 simultaneous streams on game platform Steam.

NCSoft posted a lower-than-expected operating profit of 16.5 billion won, nose-diving 89 percent on year. Revenue lost 30 percent to 423.1 billion won, lower than the market consensus of 433.4 billion won by market tracker FnGuide.

Net profit tumbled 75.83 percent to 44 billion won, below the analysts’ expectations of 36.8 billion won.

Lack of profit derives from the lack of new releases and poorer performances from its iconic franchise Lineage.

Poster for Throne and Liberty [NCSOFT]

However, the company hopes to generate new revenue streams with new game releases, such as the highly-anticipated massively mobile multiplayer role-playing game (MMORPG) Throne and Liberty, which will be released on Dec. 7. Other game lineups include RPG Project BSS, Battle Crush and MMO shooting game LLL for next year.

Netmarble continued to post operating losses for the seventh quarter, but the loss was reduced to 21.9 billion won compared to the year before. The figure missed market expectations of 15.2 billion won.

Revenue shrunk 9.2 percent to 630.6 billion won and dropped lower than the market consensus of 659.1 billion won.

Net loss logged 28.4 billion own, missing the analysts’ expectations of 31.9 billion won.

Netmarble says it is confident of a turnaround in the next quarter as revenue from its latest releases, such as Tower of God: New World and Seven Knights Idle Adventure, will get fully reflected for the October-December period.

The company also recently sold off its 6 percent stake in K-pop agency HYBE to improve its financial structure earlier this month. The stake is estimated at a value over 568.7 billion won.

Netmarble’s new lineup includes Paragon: The Overprime, Arthdal Chronicles: Three Factions and Sole Leveling: ARISE to be released by the first half of next year.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]