Nexon, Krafton post strong Q3 results

(Nexon)

South Korea’s gaming industry, once dominated by three major players - Nexon Corp., Netmarble Corp., and NCSoft Corp. - is rapidly shifting to a dual structure led by Nexon and Krafton.

Nexon, which holds numerous successful intellectual properties (IPs) and continues to perform steadily is now leading the market alongside Krafton, which is backed by its global hit “PUBG: Battlegrounds.”

Analysts suggest that the overseas market performance of major gaming companies is driving the mixed results in third-quarter 2024 earnings.

Nexon performed well in China and Krafton in India, achieving a combined overseas revenue of 1.4 trillion won ($994.3 million). The company disclosed on the Tokyo Stock Exchange on Tuesday that its third-quarter revenue for 2024 increased by 13 percent on year to 1.2 trillion won, while operating profit during this period increased by 11 percent to 467.2 billion won.

This growth in revenue is largely attributed to the solid performance of franchise IPs including “MapleStory” and “Dungeon & Fighter,” with the company launching “Dungeon & Fighter Mobile” in China in May to continue its success.

Dungeon & Fighter has been a popular IP in the Chinese market since the launch of the PC version. For the mobile version, Nexon collaborated with Tencent to introduce localized content, leveraging the IP’s existing brand awareness.

While relatively unknown in Korea, the company has established a strong niche internationally in genre-specific markets with dedicated core users. The global release of Nexon’s new looter-shooter, “The First Descendant,” in July 2024 helped North American and European sales in the third quarter grow by 93 percent on year.

Nexon also decided to grant 100 shares of company stock as Restricted Stock Units to all 8,600 of its subsidiary employees, marking the first time it has distributed stock to all employees. Based on Nexon’s closing price of 2,572 yen ($16.6) per share on the Tokyo Stock Exchange on Tuesday, each employee will receive about 2.35 million won in company stock.

For its part, Krafton posted third-quarter revenue of 719.3 billion won and an operating profit of 324.4 billion won, breaking several records, including its first cumulative annual revenue of 2 trillion won and highest-ever quarterly revenue since it was founded.

This success is attributed to continued revenue from both the PC and mobile versions of PUBG: Battlegrounds, now in its eighth year.

Krafton has adopted a stringent localization strategy to secure overseas market revenue. In India, for example, the company collaborates with Bollywood actors and conducts joint marketing with local artists to expand its user base.

Krafton’s overseas revenue in the third quarter accounted for 89.8 percent, with overseas sales reaching 645.9 billion won. By region, the Asia region, which includes India, a key market for PUBG Mobile, accounted for 81.9 percent of the entire sales.

Netmarble also swung to a profit, reporting third quarter revenue of 647.3 billion won and an operating profit of 65.5 billion won thanks to the success of “Solo Leveling: ARISE,” which is based on a globally popular webtoon IP. NCSoft, on the other hand, posted a quarterly loss of 14.3 billion won. Overseas sales also fell by about 21 percent to 115.7 billion won.