#Japan #Minato #NEXON #MapleStory #ARK Raiders

Nexon Unveils Solid Q2 Earnings for 2025

Nexon Co., Ltd. (headquartered in Minato, Tokyo, President: Lee Jeong-hon, Tokyo Stock Exchange: 3659) has announced its consolidated earnings for the second quarter of fiscal year 2025, covering the period from April 1 to June 30, 2025. CEO Lee Jeong-hon commented on the results, stating, "The second quarter has exceeded our expectations, allowing us to achieve commendable performance. We have reignited growth in major titles, newly launched games are performing well, and we are enhancing our global market presence through new service offerings. Notably, our upcoming title 'ARC Raiders,' scheduled for release on October 30, is currently ranked 6th globally on Steam’s wishlist, attracting significant attention in the lead-up to launch."

Q2 Highlights

• - Sales Revenue: Reached ¥118.9 billion, reflecting a 3% decline year-on-year based on accounting standards, yet a 6% increase when adjusted for constant currency exchange rates. This was higher than the company’s sales forecast, buoyed by strong performances from 'MapleStory,' 'FC ONLINE,' and the PC version of 'Arad Senki,' alongside the expansion of service areas for 'MapleStory Worlds' and the success of 'Mabinogi Mobile.'

• - Operating Income: Strong revenues led to an operating income of ¥37.7 billion, exceeding forecasts. Year-on-year, this represented a 17% decrease based on accounting standards, while constant currency rates showed a 10% decrease.

• - Quarterly Profit: Declined by 58% year-on-year to ¥16.8 billion, attributed to recognizing a loss of ¥17.5 billion from foreign exchange, compared to the ¥8.2 billion gain recognized in Q2 2024.

• - Franchise Performance: The combined sales revenue for the three main franchises—'Arad Senki,' 'MapleStory,' and 'FC'—decreased by 13% year-on-year, largely due to a revenue drop from 'Arad Senki Mobile,' which launched in Q2 2024.

• - Mabinogi Mobile: Since its launch in March, 'Mabinogi Mobile' has maintained its strong performance contributing significantly to the second-quarter results.

• - New Developments: Nexon also announced the early stages of developing a new AAA action-adventure game 'Woochi the Wayfarer,' which is set for global distribution on PC and consoles. Additionally, 'ARC Raiders' from Embark Studios is anticipated to be released globally on October 30, while 'THE FINALS' has secured an ISBN license in China and is currently undergoing closed alpha testing that started on August 8.

Franchise-Specific Insights

• - ### Arad Senki Franchise:

During Q2, the PC version saw a 67% increase in revenues year-on-year due to a recent content update that resonated well with players. However, this was overshadowed by a 40% decrease across the franchise compared to the same period last year, when 'Arad Senki Mobile' was launched. For Q3, continued growth in the PC version is anticipated, but an overall revenue decline of around 45% for the franchises is expected due to similar factors.
- PC Version: In South Korea, the momentum has picked up post-Q1, showing a 132% increase year-on-year, achieving record quarterly sales. In China, strong performance due to the Labor Day update pushed revenues beyond expectations, with solid double-digit growth year-on-year. The recent anniversary update contributed significantly to a rise in monthly active users and engagers in June.
- Arad Senki Mobile: Following the anniversary update in Q2, retention of returning users didn’t meet expectations, leading to below-forecast revenues. The company anticipates slight growth compared to Q2 in Q3 thanks to multiple upcoming updates including a level cap increase.

• - ### MapleStory Franchise:

The franchise revenue soared by 60% year-on-year, driven by strong performance in the Korean version and the geographic expansion of 'MapleStory Worlds.' Q3 is expected to maintain robust growth, with projections of a 70% increase year-on-year.
- Global MapleStory: Revenue growth was recorded for the global version, especially in the EU and US regions, which saw a 36% increase due to several successful promotional strategies.
- MapleStory Worlds: The segment saw a staggering growth of over 700% year-on-year, with rapid revenue generation post-European and Asian expansion.
- MapleStory Universe: Launched a blockchain-based MMORPG; insights gained are expected to provide essential understanding of overcoming challenges faced in traditional gaming ecosystems.

• - ### FC Franchise:

Achieved better than expected results during the 7th-anniversary updates, despite traditional seasonal weaknesses; both year-on-year and quarterly revenues increased. Active engagement is expected to continue into Q3, supported by various marketing initiatives.

• - ### Mabinogi Franchise:

The launch of 'Mabinogi Mobile' and the alpha testing of 'Vindictus: Defying Fate' highlighted the potential of the Mabinogi IP to serve as a stable revenue source within Nexon’s portfolio.

Shareholder Returns

As part of a policy to repurchase up to ¥100 billion in stock within one year, the company has completed the acquisition of ¥50 billion in shares by June 25. A further acquisition of ¥25 billion will be undertaken from August 14 to October 31, with decisions on the remaining amount to be made by assessing various economic factors.

Q3 2025 Forecast

• - Sales Revenue: Estimated between ¥116.6 billion and ¥127.1 billion, reflecting a year-on-year decrease of 14% to 6% based on accounting standards (12% to 4% in constant currency).
• - Operating Income: Projected between ¥32.7 billion and ¥41.2 billion, denoting a year-on-year decline of 36% to 20% based on accounting standards.
• - Quarterly Profit: Expected to range from ¥26.4 billion to ¥32.8 billion, implying varied results from a 2% decrease to a 21% increase compared to last year.

Conclusion

Nexon continues to demonstrate resilience and growth potential, capitalizing on its strong franchises and innovative releases. As they prepare for a global audience with titles like 'ARC Raiders,' the company’s strategic maneuvers promise exciting prospects for future quarters. This information serves as an overview for investors and those interested in Nexon’s evolving portfolio and financial health. For more detailed insights, interested parties are invited to visit the company’s IR website for the latest updates and reports.