TOKYO–(BUSINESS WIRE)–NEXON Co.,Ltd. (Nexon) (3659.TO), a global leader in virtual worlds, today announced financial results for its first quarter ended March 31, 2022.
“We couldn’t be more excited about the recent results and what they mean for our full-year performance,” said Owen Mahoney, president and CEO of Nexon. “Nexon is a loaded spring. Continued enhancements to our existing portfolio, combined with new revenue generated from major launches in 2022 and 2023, will dramatically shift our trajectory and drive growth in 2022 and beyond.
“Nexon’s business is designed to thrive in any economic climate, with disciplined cost control, substantial cash reserves, zero debt and approximately $1 billion in new cash generated each year. We are insulated against Forex, inflation and supply chain issues that affect many other businesses. Our free-to-play model provides consistent revenue, strong cash flow, and tremendous value for consumers, especially during turbulent economic times. »
Recent highlights include:
Nexon Group’s first-quarter revenue was 91.0 billion yen, up 3% year-on-year on a reported basis and down 1% year-on-year at constant exchange rates1– as part of our outlook.
Operating profit was 38.5 billion yen, down 11% year-on-year, in line with our guidance. Marketing expenses and HR costs were lower than expected, while royalty costs and PG fees2 exceeded our plan due to stronger than expected sales of FIFA ONLINE 43 and Dungeon and Mobile Fighter.
Net revenue4 was 40.3 billion yen, exceeding our forecast. Driven by a foreign exchange gain of 12.7 billion yen mainly on cash deposits denominated in US dollars.
First quarter revenue was driven by the launch of a new virtual world, Dungeon and Mobile Fighter in Korea and by FIFA ONLINE 43 which achieved record quarterly sales in Korea.
- Dungeon and combat mobile, a new virtual world launched in Korea on March 24, has become one of the top-grossing games, reaching No. 1 on the App Store and Google Play. Concerns about the cannibalization of the franchise were allayed with the launch of the mobile game which contributed to a 20% increase in the number of daily active users in the PC game.
In China, Dungeon and Fighter increased year-on-year on the back of well-received Lunar New Year package sales and is expected to maintain steady growth in the coming months.
In Korea, despite a year-over-year decline from a tough comparison in 2021, maple story rebounded from the previous quarter with a successful winter update and is expected to show strong growth over the remainder of the year. The game’s promoter net scores return to the high levels of the first quarter of 2021. maple storyThe performance of is expected to show continued improvement in the second quarter and beyond.
Despite strong contributions from Blue Archives and MapleStory MNorth America and Europe revenue decreased 2% year-over-year due to lower Choices5 and maple story.
In Japan, income from Counterside was more than offset by declines in TRAHA, V4 and Blue Archives.
Rest of the world revenue6 increased by 42% year-on-year thanks to the growth of maple story and MapleStory M as well as a contribution from Blue Archives.
Nexon’s Embark studio in Stockholm, Sweden is working on several new virtual worlds for worldwide release. The first one, ARC Raiders, is slated for later this year and later this month it will perform its biggest community test with external players. A second virtual world of Embark, code name Discovery, is expected to launch within the next 12 months and received strong scores from gamers in a recent closed external gaming test.
Other new titles in development include DNF Dueling – a new action fighting game based on the Dungeon and Fighter IP on PC and console, and KartRider: Drift.
Outlook for the second quarter of 2022:
Expect revenue in the range of 81.3 to 87.3 billion yen, up 45% to 56% year-on-year on a reported basis, up 36% to 45 %: year-on-year at constant exchange rates1
Expect an operating profit of 22.7-27.3 billion yen
Expect net income of 16.1-19.7 billion yen
Foreign exchange sensitivity7: Each movement of the Japanese yen against the US dollar would have the following impact on our finances for the second quarter of 2022
Turnover: 0.66 billion yen
Operating income: 0.22 billion yen
Conference call (Japanese and 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 take place at 5:00 p.m. JST / 4:00 a.m. EDT and will be conducted simultaneously in Japanese and English. It will consist of brief remarks by the leadership team followed by a question and answer session. The Q&A session will take place with consecutive translations.
Time: May 12, 2022 at 5:00 p.m. JST / 4:00 a.m. EDT (scheduled)
Please register in advance from the link below. Participant’s PIN and security code will be provided upon registration. Please click here to access the registration page.
(Please note that the link is accessible on Google Chrome, Mozilla Firefox, Microsoft Edge (Chromium) only.)
+44-20-3364-5380(UK), +852-302-77009(Hong Kong),
* The participant’s PIN and security code will be required to join the call
Audio archive and transcription
An audio archive and 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 provide investors with background information about Nexon and is intended to provide investors and analysts with financial and operating information about Nexon, but not to solicit or recommend a sale or purchase of any stock or other Nexon titles.
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 over 45 games live on multiple platforms, including mobile and available in over 190 countries. Major game franchises include maple story, Kart Rider and Dungeon and Fighter. In 2021, Nexon completed the acquisition of Embark Studios AB, a company based in Stockholm, Sweden, developing several projects for global release
1 Constant currency is a non-GAAP measure used to show performance unaffected by fluctuations in exchange rates. Amounts in constant currencies are calculated using the average exchange rates for the comparable period of the previous year and applied to the current period.
2 PG fees include commissions paid to external payment gateway companies when users purchase items in the PC Online games we serve. This also includes mobile operator related commissions we pay for our Japanese mobile browser games, commissions we pay to Apple/Google for our native mobile games globally, and platform commission fees related to games on mobile browser.
3 The official titles are EA SPORTS™ FIFA ONLINE 4 (CP) and EA SPORTS™ FIFA ONLINE 4M (portable).
4 Net income refers to net income attributable to owners of the parent company.
5 The official title is Choice: Stories you play.
6 “Rest of the World” includes other Asian countries as well as Central and South American countries.
7 In most situations, the South Korean won and Chinese yuan exchange rates are tied to the US dollar. For simplicity, the forex sensitivity is calculated based on the assumption that the Korean Won and the Chinese Yuan move the same against the Japanese Yen when there is a movement in the exchange rate in the United States. United. dollar and Japanese yen.