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Nexon's Record-Breaking Third Quarter 2017 Results Demonstrate Global Growth
[November 10, 2017]

Nexon's Record-Breaking Third Quarter 2017 Results Demonstrate Global Growth


NEXON Co., Ltd. ("Nexon") (3659.TO), a global leader in online games, today announced financial results for its third quarter ended September 30, 2017. Today, Nexon also announced the acquisition of Pixelberry Studios, a California-based mobile game developer and the industry leader in interactive narrative games. In addition, Nexon has extended its publishing relationship with Electronic Arts ("EA") to bring EA SPORTS™ FIFA ONLINE 4 ("FIFA Online 4") to Korea, marking the fourth partnership between the companies following EA SPORTS™ FIFA Online 3 ("FIFA Online 3") / EA SPORTS™ FIFA Online 3 M ("FIFA Online 3 M"), Need for Speed™ Edge and Titanfall™ Online.

"Nexon had another very strong quarter with consistently strong performances in our core markets," said Owen Mahoney, President and Chief Executive Officer, Nexon. "Long-running successes like MapleStory and Dungeon&Fighter, along with sustained engagement on FIFA Online 3 and FIFA Online 3 M, validate our model of making games that last for years and decades.

"Looking forward, we're pleased to work with EA on FIFA Online 4, the sequel to FIFA Online 3, which has continued its growth and success since it launched in 2013," Mahoney added. "Our western mobile studios continue to grow with our strategic acquisition of Pixelberry Studios - a developer which leads the interactive fiction category and expands our reach with the deeply underserved female audience. Our continued goal is to build and launch new experiences that are not just highly engaging to keep players coming back for years, but also creative and unique, separating our games from a saturated marketplace. We are also very excited as we look ahead to our robust pipeline for the fourth quarter, which will see the full launch of MapleStory2 in China, where we already have strong early indicators, as well as launches of OVERHIT and others."

In China, Dungeon&Fighter's longevity continues while MapleStory2's strong results from Early Access and Open Beta pre-test helped push revenue above expectations. In Korea, FIFA Online 3 and FIFA Online 3 M, in their fifth year of service, have continued to grow and drive strong sales through live game operations. More than two years since its initial worldwide launch, DomiNations from Big Huge Games in Maryland saw revenue increase year-over-year in the third quarter. Big Huge Games has also added two new leadership positions with a Chief Operating Officer and Creative Director to continue to expand and build exciting new games.

In the fourth quarter Nexon will be releasing a series of highly anticipated games, including MapleStory2 in China through our partner Tencent as well as OVERHIT, the sequel to the critically acclaimed game HIT. Durango: Wild Lands, the open world massively multiplayer online role playing game (MMORPG) for mobile devices which has started pre-registration in Korea during the third quarter, and Moonlight Blade will be released in 2018.

Third Quarter 2017 Highlights:

  • Revenues 60.4 billion yen, up 36% year-over-year as-reported, up 27% constant currency1
  • Exceeded outlook, primarily driven by Dungeon&Fighter China's successful National Day Update, strength of FIFA Online 3 / FIFA Online 3 M, AxE, and contribution from MapleStory2 limited access / open beta pre-test in China
  • Operating income 22.7 billion yen - exceeded outlook, primarily due to the outperformance in high-margin China business as well as FIFA Online 3 / FIFA Online 3 M and AxE
  • Net income 2 19.6 billion yen - exceeded outlook, primarily due to operating income result and finance income

Fourth Quarter 2017 Outlook:

  • Expect fourth quarter 2017 revenues in the range of 48.7 to 52.8 billion yen, up 13% to 22% year-over-year on as-reported, up 7% to 16% year-over-year on constant currency1
    • Expect PC online game revenues in the range of 34.5 to 37.1 billion yen
    • Expect mobile game revenues in the range of 14.2 to 15.7 billion yen
  • Expect operating income in the range of 12.2 to 15.4 billion yen
  • Expect net income2 in the range of 11.3 to 13.9 billion yen

Conference Call and Replay:

Nexon management will host a conference call for investors, analysts and the media to discuss the company's financial results and outlook. The conference call will be held at 6:00 p.m. Japan Standard Time (JST) / 4:00 a.m. Eastern Standard Time (EST), and will be simultaneously conducted in Japanese and English. It will consist of brief remarks made by the management team followed by a Q&A session.



   

Conference Call (Japanese & English)

         
Time: November 10, 2017, at 6:00 p.m. JST / 4:00 a.m. EST
 

For English Speakers

Telephone Number: +81-3-4570-1816 (Japan), +1-646-502-5131 (USA), +44-20-7660-2114 (UK), +852-306-00227 (Hong Kong), +65-642-98366 (Singapore), +82-234-831-910 (South Korea)
Pass Code: 619567#
 

For Japanese Speakers

Telephone Number: +81-3-4570-1817 (Japan)
Pass Code: 952366#
 

Conference Call Replay

A replay of the call will be available about 30 minutes after the conclusion of the conference call and can be accessed until November 17, 2017. Webcast replay and a transcript of the call will be available within several days on Nexon's Investor Relations website.
 

Conference Call Replay (English)

Replay Telephone Number: +81-3-4570-2856 (Japan)
Reference Number: 222892#
 

Conference Call Replay (Japanese)

Replay Telephone Number: +81-3-4570-4130 (Japan)
Reference Number: 222891#
 

For additional information regarding Nexon's third quarter 2017 financial results, please visit the Investor Relations section of Nexon's website at http://ir.nexon.co.jp/en/.

This press release is prepared to offer reference information about Nexon to investors and is intended to generally provide investors and analysts with financial and operational information about Nexon, but not to solicit or recommend any sale or purchase of stock or other securities of Nexon.

About NEXON Co., Ltd. http://company.nexon.co.jp/en/

NEXON Co., Ltd. ("Nexon") (3659.TO) is a global leader in online games, with more than 100 live games operated across more than 190 countries. Nexon pioneered micro-transactions and the free-to-play business model, and is widely credited with unmatched global expertise in sophisticated live game operations, nurturing player communities, and for sustaining games for years, even decades. Founded in Korea in 1994, the Company is now headquartered in Japan and listed on the Tokyo Stock Exchange. In 2017, Nexon was placed on the Nikkei Stock Index 300.

1     Constant currency is a non-GAAP measure used to show performance unaffected by fluctuations in foreign currency exchange rates. Constant currency basis amounts are calculated using the average foreign currency exchange rates for the comparable period in the prior year and applied to the current period. As an example, we calculate royalty revenues from China Dungeon&Fighter by applying the same CNY/USD, USD/KRW and KRW/JPY exchange rates from last year's same fiscal quarter.
2 Net income refers to net income attributable to owners of the parent, as stated in Nexon's consolidated financial results.
                   


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