Nexon reports 39% year-over-year increase in revenues to $331.4M

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By Scott Reyburn Comment

Nexon today reported revenues of 30.9 billion yen ($331.4 million) for Q4 2012, up 39 percent year-over-year from 22.2 billion yen ($236.6 million) and up 9 percent from $304 million in Q3 2012.Nexon logo

Despite the increase in revenues, the free-to-play gaming giant saw a net loss of 94 million yen ($1 million), due to a write-down for its investment in JC Entertainment and the new interpretation of South Korean tax regulation, according to the company.

The South Korean company, which moved its headquarters to Tokyo and raised $1.3 billion before its IPO in 2011, is most known in the U.S. for its free-to-play massively multiplayer online role-playing game MapleStory.

Operating income was 9.8 million yen, an increase of 5 percent year-over-year. Both total revenues and operating income exceeded the company’s expectations. Operating income margins fell from 41.4 percent in Q3 to 31.6 percent in Q4 in which the company cited its larger mobile games portfolio had lower profit margins compared to its higher-margin downloadable game business in China.

Looking forward to Q1 2013, Nexon expects its mobile business to generate between 7.4 billion yen ($79.4 million) and 8.1 billion yen ($87.4 million), a more than thirty-fold increase from 225 million yen in Q1 2012.

Nexon had a couple key acquisitions of mobile-social developers in 2012, and announced a partnership with DeNA last month. The company believes it will benefit from its lineup of marketing initiatives on DeNA’s social gaming platform Mobage. Nexon first acquired Tokyo-based mobile-social game maker inBlue for an undisclosed amount in late June 2012, and later acquired Japanese mobile-social game developer Gloops for $469 million in October 2012. Gloops is well-known for its games on DeNA’s Mobage platform.

The company’s stock closed today after its earnings report, down 3.4 percent to 857 yen ($9.20).Nexon Q4 2012 earnings reportNexon stock February 13 2013

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