Nexon Reports Q2, 2021 Earnings - Revenues Down a Bit While New Games Highlighted

August 11, 2021 Omer Altay Comments

The South Korean gaming giant Nexon released their Q2, 2021 earnings report today and the financial highlights were as follows:

Quarterly Revenue: 56B JPY (approx. $510M USD), down from 64.5B JPY in Q2 2020.
Quarterly Operating Income: 15.4B JPY (approx. $140m USD), down from 26.7B JPY in Q2 2020.

Revenues declines in all regions except for South Korea which was flat year over year (though they declined 10% adjusting for changes in currency exchange rates). While profits missed analyst expectations, guidance for next quarter was relatively flat quarter over quarter, which suggests the decline in revenues are largely over. Dungeon Fighter Online in particular has taken a big hit lately with revenues down 30% year over year and the company specifically citing weakness in the franchise in their earnings report.

Revenue breakdown by platform was similar to previous quarters with PC games still making up a bulk of Nexon's revenues (32% mobile vs 68% PC). This is in contrast to other South Korean game studios like NCSoft and Pearl Abyss making more and more money from mobile. Mobile is gaining revenue share at Nexon though, as last year mobile games were 30% of revenues.

Nexon reiterated their commitment to developing new titles and highlighted the 12 new games the company is working on. We revealed and discussed these games in more detail in this post. Nexon's current pipeline of games include the following titles highlighted in their earnings presentation:

Average revenue per paying user (ARPPU) for the company's PC titles for the quarter came in at 7,103 Yen (approx. $64.12), meaning the average player who spent money on a Nexon PC game spent $64.12 over the last 3 months with just 19.3% of monthly active users spending any amount of money during the quarter. Given that every major PC game Nexon operates is free to play, $21.37/month in revenue per paying user is impressive. Free to play is often more lucrative than subscription based MMORPGs like World of Warcraft and Final Fantasy XIV.

MapleStory and Dungeon Fighter Online continue to be Nexon's two most successful franchises. Interestingly, the Korean version of MapleStory is generating more in revenue now than ever before despite the game being over 17 years old. Life to date revenues for MapleStory are a whopping $3 billion.

Dungeon Fighter Online (known as Dungeon&Fighter in Asia) is even bigger with a whopping $15 billion in life to date franchise revenue since its launch in 2003. Dungeon Fighter Online is easily the most successful MMORPG in the world and likely the best selling video game in the world by total USD sales.