Asian online game publisher Nexon reported strong financial results for the first quarter ended March 31. The Tokyo-based company, which makes free-to-play games like MapleStory, continues to prosper as demand for games shifts from packaged goods to online digital distribution. The results show that international game companies are faring better than some of their North American rivals in the transition from retail games to digital games.
Revenues grew 46 percent in the quarter (26 percent using constant currency) while net income grew 17 percent. Revenues were particularly strong in South Korea, where Nexon was started and has most of its operations, and in China. The launch of FIFA Online 3, in partnership with Electronic Arts, is going strong. The Lunar New Year update for Dungeon&Fighter was well received in China.
“We are pleased that our first quarter results exceeded the high end of the outlook we provided last quarter, primarily due to better-than-expected performance in China and strong results in Korea, as well as a favorable currency environment. Additionally, the acquisitions of gloops and inBlue have positioned us as a major player in mobile, adding significant revenue to our business,” said Seungwoo Choi, President and Chief Executive Officer of Nexon. “Content updates to our major PC games were well-received by players around the world, particularly a tier 1 update for Dungeon&Fighter in China. We also successfully launched FIFA Online 3 in Korea during the quarter, and the game is showing strong performance in terms of both user metrics and revenues.”
The company said it expects to gain momentum in the mobile business. In the second quarter, Nexon plans to release Dragon Girls on Kakao in Korea, where players have wholeheartedly embraced Kakao as a mobile social chat platform. In North America, Nexon plans to release Guardian Break (Royal Tactics) in the second quarter. In the coming year, Nexon plans to launch Crytek’s Warface and Take-Two’s Pro Baseball 2K in the Korean market.
China is the biggest source of revenues for Nexon, accounting for 50 percent of overall sales. China sales are almost double the amount in Korea. The region is generating more than ten times the revenue that North America is producing for Nexon.