Press release

Nexon Releases Earnings For Third Quarter 2021

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NEXON Co., Ltd. (Nexon) (3659.TO), a global leader in Virtual Worlds, today announced the financial results for its third quarter ended September 30, 2021.

“Nexon delivered a strong Q3, exceeding the high end of our outlook based on revenue growth in our key franchises, including MapleStory in Korea, Dungeon&Fighter in China, FIFA ONLINE 41 and The Kingdom of the Winds: Yeon,” said Owen Mahoney, President and CEO of Nexon. “Nexon is delivering on its promises. We are building momentum, strengthening our core business and preparing to launch several catalysts in 2022, including KartRider: Drift, a new game from our Embark Studios and, in the first quarter, Mobile Dungeon&Fighter in Korea.”

Third Quarter 2021 Highlights:

  • Following exceptionally strong growth in Q3 2020, group revenues were ¥75.9 billion, down 4% year-over-year on an as-reported basis and down 11% year-over-year on a constant currency basis2.
  • All regions performed above the expected range except Japan, which delivered revenue within the expected range.
  • On a platform basis, PC3 revenues exceeded the expected range and mobile revenues came within the expected range.
  • Operating income was ¥29.8 billion, up 8% year-over-year, exceeding our outlook primarily driven by revenue outperformance.
  • Net income4 was ¥37.9 billion, up 132% year-over-year, exceeding our outlook.
  • In Korea, MapleStory showed a second quarter of sequential improvement in Net Promoter Score – a key indicator of player satisfaction. MapleStory’s Q3 revenue exceeded the company’s outlook based on a well-received event in August and successful promotions conducted in time for the Korean Chuseok holiday.
  • Major PC titles including Dungeon&Fighter in Korea grew year-over-year, including Sudden Attack which grew by more than 200% year-over-year.
  • In Japan, revenues decreased by 5% year-over-year due to revenue decreases from TRAHA and MapleStory M, which offset MapleStory’s growth and contributions from Blue Archive and FIFA MOBILE5.
  • In China, revenues exceeded the outlook. A change in the Dungeon&Fighter creative team contributed to improved player engagement and stronger-than-expected sales from a National Day package. On a year-over-year basis, revenues increased by 45% on an as-reported basis and by 33% on a constant currency basis2.

Other Highlights:

  • On November 1, Nexon announced plans to launch Mobile Dungeon&Fighter in Korea during the first quarter of 2022. Nexon continues to coordinate with its Chinese publishing partner, Tencent Games, on the game’s release in China, although Nexon presently has no information with respect to the timing of the release. The new game, optimized for mobile, is based on Nexon’s blockbuster Dungeon&Fighter IP, which has been played by more than 700 million people worldwide and generated more than US$15 billion in lifetime revenue.
  • In September, Nexon announced global publishing support for HIT2, a game developed by its subsidiary NAT GAMES Co., Ltd. for the PC and mobile platforms.
  • Nexon’s Embark Studios in Stockholm, Sweden has revealed information on three projects – two new Virtual Worlds and a groundbreaking creative platform. The first Virtual World – codenamed Pioneer – is scheduled to launch in 2022. All three projects are built with unique technology developed by Embark, including procedural tools and machine learning for content creation unlike anything else in the market.
  • On October 28, Nexon announced KartRider: Drift will conduct closed beta testing from December 9-15. The new game is based on Nexon’s highly successful KartRider franchise, which has generated more than 380 million registered players worldwide. KartRider: Drift is scheduled for its launch in 2022 on multiple platforms including PC and consoles – Xbox One®6 and PlayStation 4®6. For the first time, KartRider: Drift will also be available on the world’s fastest growing game platform, mobile.

Fourth Quarter 2021 Outlook:

  • Expect group revenues to be in the range of ¥51.2 to ¥57.0 billion, representing a 23% to 14% decrease year-over-year on an as-reported basis and a 26% to 18% decrease year-over-year on a constant currency basis2
  • Expect operating income to be in the range of ¥2.5 to ¥6.9 billion
  • Expect net income4 to be in the range of ¥0.3 to ¥3.6 billion
  • Forex sensitivity7: Every one Japanese yen move against the U.S. dollar would have the following impact on our financials for Q4 2021

    • Revenues: ¥0.46 billion
    • Operating Income: ¥0.07 billion

Conference Call (Japanese & English)

Nexon management will host a conference call for investors, analysts and the media to discuss the company’s financial results and outlook. The conference call will be held at 5:30 p.m. JST / 3:30 a.m. EST, and will be simultaneously conducted in Japanese and English. It will consist of brief remarks made by the management team followed by a Q&A session. Q&A session will be conducted with consecutive translations.

Time: November 9, 2021 at 5:30 p.m. JST / 3:30 a.m. EST (planned)

Pre-registration Required

Please register in advance from the link below. Participant PIN and Security Code will be provided upon registration. Please click here to reach the registration page.

Audio Archive and Transcript

An audio archive and a transcript will be available on Nexon’s Investor Relations website at https://ir.nexon.co.jp/en/ after the earnings conference call.

This press release is prepared to offer reference information about Nexon to investors and is intended to generally provide investors and analysts with financial and operational information about Nexon, but not to solicit or recommend any sale or purchase of stock or other securities of Nexon.

About NEXON Co., Ltd. https://company.nexon.co.jp/en/

Founded in 1994, NEXON Co., Ltd. (Nexon) (3659.TO) is a company engaged in the production, development and operation of online games and Virtual Worlds. First listed on the Tokyo Stock Exchange in December 2011, Nexon was placed on JPX400 in 2015 and added to the Nikkei Stock Index 300 in 2017. In 2020, Nexon was added to the Nikkei 225. Nexon currently has more than 50 live games on multiple platforms including mobile and available in more than 190 countries. Major game franchises include MapleStory, KartRider and Dungeon&Fighter.

 

1 Official title is EA SPORTS™ FIFA ONLINE 4 (PC).

2 Constant currency is a non-GAAP measure used to show performance unaffected by fluctuations in foreign currency exchange rates. Constant-currency basis amounts are calculated using the average foreign currency exchange rates for the comparable period in the prior year and applied to the current period.

3 PC revenues include other revenues besides PC online games and mobile games.

4 Net income refers to net income attributable to owners of the parent.

5 Official title is EA SPORTS™ FIFA MOBILE.

6 All other product names mentioned here are trademarks or registered trademarks of their respective companies.

7 In most situations, the exchange rates of both the South Korean Won and the Chinese Yuan are linked to the U.S. dollar. For simplicity, forex sensitivity is calculated based on the assumption that Korean Won and Chinese Yuan move similarly against Japanese yen when there is an exchange rate movement in US. dollar and Japanese yen.