Nexon aims to "snowball" its IP growth and enter new markets as DnF Mobile sends China's Q2 revenue up 200%

Nexon has released its financial report for the second quarter ended June 30, 2024. The company introduced a new business strategy, while posting strong revenue and profit growth driven by the success of DnF Mobile in China.

The First Berserker: Khazan

Financial highlights

• According to its investor presentation, Nexon’s Q2 revenue reached ¥122.4 billion ($785.6 million at Nexon’s USD/JPY exchange rate of 155.88), up 30% compared to the same period last year.
• Operating income grew 64% year-over-year to ¥45.2 billion ($290 million). Net profit reached ¥39.8 billion ($250 million), up 63% from Q2 2023.

• Mobile revenue was ¥65.6 billion ($420.8 million), up 125% year-over-year, while PC revenue fell 13% to ¥56.8 billion ($364.8 million).
• China took over as the top region by revenue, with ¥56.3 billion ($361.4 million) — up 209% year-over-year, or up 183% in constant currency (performance unaffected by fluctuations in exchange rates).
• Revenue from South Korea fell 21% year-over-year (-28% in constant currency) to ¥44.8 billion ($288 million), followed by North America & Europe (¥7 billion | $45.1 million, +29%) and Japan (¥4.5 billion | $29.2 million, +97%).

Nexon’s revenue breakdown by region and platform

Game metrics and main revenue drivers

• Dungeon & Fighter was the main revenue driver in Q2, with the franchise’s revenue more than doubling year-over-year thanks to the successful launch of DnF Mobile in China. Nexon noted that “Q3 revenues are also expected to more than double Y/Y.”
• MapleStory delivered a double-digit revenue growth in Japan, North America, and Europe, but its earnings in South Korea decreased significantly due to the impact of the record Q2 2023.
• Contributions from EA Sports FC Online and FC Mobile were down year-over-year, with Nexon expecting further decline in the third quarter due to a tough comparison with the record Q3 2023.
• The First Descendant launched in Q3, so Nexon didn’t share specific details about the game’s performance, other than to call it a “breakaway success.”
• In South Korea, PC and mobile revenues fell 14% and 36% year-over-year, respectively. The main reason was the decrease in performance of Wars of Prasia, FC Online (due to “tough competition with Q2 2023”), and MapleStory.

• In China, DnF Mobile, which was co-developed by Tencent, exceeded Nexon’s expectations. Last month, Niko Partners estimated the game’s revenue on iOS and Android in the country at over $500 million. The PC version of Dungeon & Fighter experienced YoY decreases in revenue, MAU, and ARPPU (average revenue per paying user), with a “little cannibalization” with DnF Mobile.

• In Japan, MapleStory’s revenue grew 79% year-over-year, with overall growth in the region also driven by HIT: The World and Blue Archive (“record-breaking Q2 revenue”).
• In North America & Europe, year-over-year growth was driven by Maple Story (+49%) and The Finals. The latter has already surpassed 20 million downloads since its launch in December 2023.

New growth strategy and pipeline

In its quarterly report, Nexon detailed its new business strategy called “IP Growth Initiative” aimed at “snowballing” the growth of its franchises by making games in various genres and reaching new markets.

This strategy is based on two pillars:

• Leverage existing IPs by bringing them to new platforms and audiences, as is the case with DnF Mobile in China (it applies to Dungeon & Fighter and MapleStory franchises, with other brands to follow);
• Create new IP with the potential to become new core franchises (e.g. The First Descendant): Nexon also partnered with Tencent to develop new games based on The Finals and ARC Raiders IPs that specifically appeal to Chinese players.

Right now, Nexon is working on:

• The First Berserker: Khazan — action RPG based on the Dungeon & Fighter IP, expected to launch in 2025;
• MapleStory N — MMORPG for PC with blockchain technology;
• ARC Raiders — free-to-play extraction shooter from The Finals developer Embark Studios;
• Mabinogi Mobile;
• Supervive — action sandbox game developed by Theorycraft Games, Nexon serves as a publisher in Japan and South Korea;
• Nakwon: Last Paradise — zombie extraction survival game based on a new IP;
• Project Overkill — action RPG based on the Dungeon & Fighter IP;
• Vindictus: Defying Fate — action RPG based on the Vindictus IP.