Nexon Releases Earnings for Fourth Quarter and Full-Year 2023

On February 2, Nexon was informed that authorities in China have approved an ISBN license for Dungeon&Fighter Mobile to operate in that market. Nexon is working with our local publishing partner Tencent to launch the game as soon as possible in 2024.

In Q4, Nexon achieved record-breaking fourth-quarter revenue of ¥84.6 billion, up 4% year over year on an as-reported basis and down 2% year over year on a constant-currency basis, but fell short of our outlook.

The Q4 shortfall was due to a marketing challenge in MapleStory in Korea, and in China, an unexpected imbalance with the in-game economy in Dungeon&Fighter. FC ONLINE also performed lower than expected.

Year-over-year revenue growth from MapleStory, and contributions from Wars of Prasia, MapleStory: The Legends of Maple, and THE FINALS were offset by decreases in Dungeon&Fighter, FC ONLINE2, and HIT2.

Q4 operating income was down 59% year over year and below our outlook at ¥4.5 billion. In addition to the revenue shortfall, this was due to multiple one-time expenses including an updated retention-incentive plan, an impairment loss, and a penalty imposed by the Korean Fair Trade Commission. 

Net loss of ¥41.9 billion was below our outlook due to operating income underperformance, FX loss of ¥9.3 billion on U.S. dollar-denominated cash deposits, and an impairment loss of ¥44.4 billion on the AGBO investment booked as equity-method company.

In Korea, revenue was up 3% year over year at ¥52.5 billion, but was below our outlook due to the lower-than-expected performances of MapleStory and FC ONLINE2. The year-over-year growth of MapleStory, FC MOBILE, Blue Archive, and a contribution from Wars of Prasia were offset by decreases in FC ONLINE2, HIT2 and Dungeon&Fighter Mobile. 

In China, revenue was down 14% year over year and below our outlook at ¥15.1 billion due to lower-than-expected performance of Dungeon&Fighter which experienced an unexpected imbalance in the in-game economy. Year over year, the contribution from MapleStory: The Legends of Maple3 was offset by the decrease in Dungeon&Fighter revenue.

Revenue in Japan increased 3% year over year and was within our expectations at ¥2.9 billion. Growth in MapleStory, Blue Archive, and a contribution from DAVE THE DIVER were offset by decreased revenue from other mobile games.

In North America and Europe, revenue increased 78% year over year, driven by contributions from THE FINALS and DAVE THE DIVER, as well as growth in MapleStory and MapleStory M. However, Q4 revenue was below our expectations at ¥8.2 billion due to THE FINALS which had higher-than-expected bookings but greater-than-expected deferred revenue.

Rest-of-World revenue came in within our outlook at ¥5.9 billion and increased 17% year over year driven by a contribution from HIT2 and growth in Blue Archive which were partially offset by revenue decreases in MapleStory and other mobile games.

THE FINALS – the first game from Nexon’s Embark Studios – debuted on December 8. Despite intense competition, THE FINALS quickly rose to a top-five game on Steam and outperformed internal expectations for higher-than-anticipated quarterly bookings. The launch bodes well for Nexon’s growth initiatives in Western market. Season 2 of THE FINALS is scheduled for March and expected to stimulate engagement among new and existing players.

Looking ahead, Nexon will introduce deep and powerful new content in our existing games,　and launch highly anticipated new games for global audiences including The First Berserker: Khazan, MABINOGI MOBILE, The First Descendant, the second game from Embark Studios, ARC Raiders, and Dungeon&Fighter Mobile in China.

In January 2024, Nexon completed previous share repurchase plan totaling approximately ¥100 billion. On February 8, Nexon’s Board of Directors has approved a new share repurchase policy to buy back up ¥100 billion worth of stock in the period of three years ending February 2027 by considering factors including investment opportunities, financial and market conditions.