Nexon Announces Biggest Third Quarter Ever In Earnings Release

Nexon has released its third quarter revenue results and the times are looking pretty good for the developer/publisher. Driven by strong performance of its top titles including Dungeon & Fighter, Fifa Online 3, and the Maplestory 2 test in China, Nexon enjoyed a 36% increase in revenue over last year with net income up 157% over the same period.

Q3 was a great quarter for Nexon, with revenues, operating income and net income well above our expectations. It was also the biggest Q3 ever. These strong results reflect continued growth in our key existing titles in China and Korea, as well as strong starts in new games both PC and mobile.

Over in North America, Nexon placed blame for lower than expected revenues squarely on the shoulders of Lawbreakers, which launched in August and never managed to develop a following. The earnings call indicates that Nexon is writing off Lawbreakers as a loss, as its impairment made up a majority of the losses for North America for this quarter, meaning that development will either be ceasing or there are plans to divest Nexon from Boss Key Productions.

Our results in North America in the third quarter were below our outlook, mainly due to the sales from LawBreakers being below our expectations. LawBreakers is a unique FPS developed for core users. We had very high expectations for its launch; however, the timing of its launch turned out to be unfortunate, specifically the blockbuster PC online game PlayerUnknown’s Battlegrounds came out right about the same time, making the market environment very tough for first-person shooters in general and for LawBreakers.

Nexon expects these fortunes to turn around in Q4 with the acquisition of Pixelberry Studios.

Nexon’s good fortunes are expected to continue into the fourth quarter and beyond with a strong schedule of games launching worldwide.

(Source: Report, Earnings Call)

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