INVESTOR PRESENTATION Q4 2019 - Owen Mahoney President and Chief Executive Officer - Nexon
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INVESTOR PRESENTATION Q4 2019 February 13, 2020 NEXON Co., Ltd. Owen Mahoney Shiro Uemura President and Chief Executive Officer Chief Financial Officer
CEO Highlights
© 2020 NEXON Co., Ltd. All Rights Reserved. 2
The Four Quadrants
Massive TAM1 Growth In Deeply Immersive Online Games
Deep
Offline Online
Casual
1 TAM means “Total Addressable Market”. 3 The categorization of the games shown in this material is based on our own view.
2 The letters, graphics, symbols, logos and other marks, and illustrations, characters and other works, It may not necessarily reflect the common views in the market.
© 2020 NEXON Co., Ltd. All Rights Reserved. 3
which are shown in this material are trademarks, registered trademarks, copyrighted works or other
legally protected materials owned by respective right holders.
Results Driven by Phenomenal Strength of Major Franchises
Korea MapleStory, MapleStory M and FIFA ONLINE 41 Each Achieved All-Time High Full-year
Revenues. V4 Off to a Great Start. Highest Ever Q4 Revenue in Korea
1 2
Q4 2019 Results Full-year 2019 Results
• Q4 2019 revenues exceeded our outlook. • Constant-currency2 revenues, operating income and
• Outperformance driven by exceptionally strong net income3 all grew Y/Y driven by strength in Korea.
performances of MapleStory and FIFA ONLINE 41, • As-reported revenues and operating income were
as well as good start of V4 down Y/Y due to FX headwinds
• Net income3 was up Y/Y
3 4 5
Korea MapleStory - PC Korea MapleStory M FIFA ONLINE 41
• Constant-currency2 Q4 revenue grew 88% • Constant-currency2 Q4 revenue grew 114% • Combined PC and mobile, Q4 and full-year
Y/Y. Y/Y revenues grew significantly Y/Y.
• Constant-currency2 full-year revenue grew • Constant-currency2 full-year revenue grew • Recorded the highest Q4 and full-year
39% (on top of the 67% Y/Y growth in 2018) 65% (on top of the 81% Y/Y growth in 2018) revenues, surpassing the previous peak of
• Double-digit growth for the 6th consecutive • Double-digit growth for the 3rd consecutive FIFA Online 31 achieved in 2017.
year. years
• Both Q4 and full-year revenues surpassed • Both Q4 and full-year revenues surpassed
previous peak set in 2018. previous peak set in 2018.
1 Official titles are EA SPORTS™ FIFA Online 3 (PC), EA SPORTS™ FIFA Online 3 M (mobile), EA SPORTS™ FIFA ONLINE 4 (PC) and EA SPORTS™ FIFA ONLINE 4 M (mobile)
2 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.
© 2020 NEXON Co., Ltd. All Rights Reserved. 4
3 Net income refers to net income attributable to owners of the parent, as stated in Nexon’s consolidated financial results.
FY2019 MapleStory Franchise Marks All-time High in Korea
Another True Forever Franchise
Korea MapleStory Korea MapleStory M
Revenue Revenue
Year Year
2003 2019 2016 2019
1 The letters, graphics, symbols, logos and other marks, and illustrations, characters and other works, which are shown in this material are trademarks, © 2020 NEXON Co., Ltd. All Rights Reserved. 5
registered trademarks, copyrighted works or other legally protected materials owned by respective right holders
Dungeon&Fighter
New Key Update Comes to China in March. Strong Progress on the Mobile Version
Dungeon&Fighter Dungeon&Fighter 2D Mobile2
• Expect sales from 2020 Lunar New Year update to decline substantially • Began the second closed beta test in December
from 2019’s strong performance. Expect revenue growth to remain • Observed encouraging results during the test
challenging for a few quarters • Started pre-registration in late December
• Next important event comes in March 2020 when the new key update • Over 16 million3 people have signed up for its coming launch in 1H 2020.
goes live – addresses the primary feedback received from our players; • Immersive Dungeon&Fighter experience to mobile represents a massive
Includes the level cap release and the third awakening1. increase in the total addressable market.
• In January, the update went live in Korea – historically been a good
indicator of China service. Feedback in Korea positive; improved KPIs.
Dungeon&Fighter PC
1 Third awakening allows players to gain new skills for their characters 3 Pre-registration as of February 12th, 2020
2 Mobile game based on original IPs. 4 The letters, graphics, symbols, logos and other marks, and illustrations, characters and other works, which are shown in this material
are trademarks, registered trademarks, copyrighted works or other legally protected materials owned by respective right holders
© 2020 NEXON Co., Ltd. All Rights Reserved. 6
New Mobile MMORPG V4
Early Performance Is Solid, Despite Strong Competition in Korea
Top Grossing
1 iOS : # X
APP RANKING iOS : #4 Google Play : #4
Google Play: # X
1 Ranking sourced from App Annie as of February 12th, 2020 2 The letters, graphics, symbols, logos and other marks, and illustrations, characters and other works, which are shown in this material
are trademarks, registered trademarks, copyrighted works or other legally protected materials owned by respective right holders © 2020 NEXON Co., Ltd. All Rights Reserved. 7
Enormous Value of Nexon’s IP Franchises
Launched 2003 Launched 2004 Launched 2005
More than 180 million registered users worldwide Registered users over 380 million on PC platform Life-to-date gross revenue well over $10 billion
Player registrations now equal to 45% of Korean alone Gross revenue several billion dollars more than
population Over half of all Korean population; over 45% of life-to-date box office of Star Wars series, Harry
Combined PC and mobile revenue is about equal Taiwanese population has played the game Potter series; approximately double the revenue
to global box office of the movie franchise Frozen of the entire Avengers series1
– one of Disney’s biggest1.
1 Source: BoxOfficeMojo.com
2 The letters, graphics, symbols, logos and other marks, and illustrations, characters and other works, which are shown in this material are trademarks, © 2020 NEXON Co., Ltd. All Rights Reserved. 8
registered trademarks, copyrighted works or other legally protected materials owned by respective right holders
Focus
1 2
Fully-online multiplayer games Multiple platforms: PC, console and mobile
3 4
Leveraging Nexon’s substantial IP portfolio Selective Investment in highly unique new IPs
1 The letters, graphics, symbols, logos and other marks, and illustrations, characters and other works, which are shown in this material are trademarks, © 2020 NEXON Co., Ltd. All Rights Reserved. 9
registered trademarks, copyrighted works or other legally protected materials owned by respective right holders
Three Product Beats
in 2020
© 2020 NEXON Co., Ltd. All Rights Reserved. 10Dungeon&Fighter 2D Mobile1
2
Expect to launch in 1H 2020. Pre-registration Exceeded 16 Million
1 Mobile game based on original IPs. 2 Pre-registration as of February 12th, 2020 3 The letters, graphics, symbols, logos and other marks, and illustrations, characters and other works, which
are shown in this material are trademarks, registered trademarks, copyrighted works or other legally © 2020 NEXON Co., Ltd. All Rights Reserved. 11
protected materials owned by respective right holders.KartRider: Drift
Fully Cross-Platform Multiplayer Online Game
1 The letters, graphics, symbols, logos and other marks, and illustrations, characters and other works, which are shown in this material are trademarks,
registered trademarks, copyrighted works or other legally protected materials owned by respective right holders. © 2020 NEXON Co., Ltd. All Rights Reserved. 12First Game from Embark Studios
1 The letters, graphics, symbols, logos and other marks, and illustrations, characters and other works, which are shown in this material are trademarks,
registered trademarks, copyrighted works or other legally protected materials owned by respective right holders. © 2020 NEXON Co., Ltd. All Rights Reserved. 13Solid Foundation. Significant Opportunities for Growth
Nexon is Well-positioned to Lead the Next Wave of Online Games
Opportunity
REVENUE
Solid
Foundation
YEAR
1 The letters, graphics, symbols, logos and other marks, and illustrations, characters and other works, which are shown in this material are trademarks,
registered trademarks, copyrighted works or other legally protected materials owned by respective right holders. © 2020 NEXON Co., Ltd. All Rights Reserved. 14FY 2019 Capital Allocation
(Unit: ¥ billions)
Working Capital1
Investment
-10.3
Embark Studios
Wonder Holdings
-38.4
Shareholder Return
105.1 Share Buyback2
-30.0
26.4
Operating Cash Flow Surplus
1 Working Capital includes increase/decrease in working capital as well as other proceeds and payments that are not included in “Investment” and “Shareholder Return” such as “purchases of
property, plant and equipment” and “proceeds from exercise of stock options”.
2 Including purchases of treasury stock in January 2020, based on the share repurchase program of ¥30 billion © 2020 NEXON Co., Ltd. All Rights Reserved. 15FY 2019 Results
© 2020 NEXON Co., Ltd. All Rights Reserved. 16FY 2019 Financial Results
(Unit: ¥ billions)
Revenues Operating Income Net Income1
253.7 248.5
107.7
115.7
98.4 94.5
2018 2019 2018 2019 2018 2019
As reported: -2% As reported: -4% As reported: + 7%
Constant currency2: +4% Constant currency2: +3% Constant currency2: +16%
1 Net income refers to net income attributable to owners of the parent, as stated in Nexon’s consolidated financial results.
2 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.
© 2020 NEXON Co., Ltd. All Rights Reserved. 17FY 2019 Revenue Breakdown
FY2019 Revenue by Region1
FY2019 YoY % Change
Europe and Others2
North America 7%
(Unit: ¥ millions) Constant Constant 6%
FY2018 As-Reported As-Reported
Currency5 Currency5
Revenue by Region1 Japan
(16%) (10%) 6%
China ¥132,966 ¥112,247 ¥119,076
Korea 73,790 89,794 96,519 22% 31%
China
Japan 14,068 13,854 14,261 (2%) 1% 45%
North America 16,498 14,687 15,089 (11%) (9%) Korea
2 36%
Europe and Others 16,399 17,960 18,872 10% 15%
Nexon Total 253,721 248,542 263,817 (2%) 4%
Revenue by Platform
3
FY2019 Revenue by Platform
PC 198,871 187,965 199,823 (5%) 0%
Mobile 54,850 60,577 63,994 10% 17%
Nexon Total 253,721 248,542 263,817 (2%) 4% Mobile
24%
Operating income 98,360 94,525 101,751 (4%) 3%
4
Net income 107,672 115,664 125,006 7% 16%
PC3
76%
Earnings per share 121.03 129.34
1 Based on the regions in which 2 "Europe and Others" includes Europe 3 PC revenues include other 4 Net income refers to net income attributable to 5 Constant currency is a non-GAAP measure used to show performance unaffected
revenues originate; not a as well as other Asian countries and revenues besides PC online owners of the parent, as stated in Nexon’s by fluctuations in foreign currency exchange rates. Constant-currency basis
representation of revenues South American countries. games and mobile games. consolidated financial results. amounts are calculated using the average foreign currency exchange rates for
according to Nexon entities. 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.
© 2020 NEXON Co., Ltd. All Rights Reserved. 18Historical China Revenues
(Unit: ¥ billions)
133.0
Q1 Q2 Q3 Q4
+15% -16%
17.9
115.4
112.2
22.8 15.6
+56% 31.2
17.8
75.4 -2% 74.2 27.8
+13%
67.0 23.2
16.5 15.4 21.3
16.4
20.8
20.2 17.4
15.7
15.6
16.0 60.7 57.6
13.5
44.0
21.3 22.7 25.8
FY14 FY15 FY16 FY17 FY18 FY19
© 2020 NEXON Co., Ltd. All Rights Reserved. 19Q4 2019 Results
© 2020 NEXON Co., Ltd. All Rights Reserved. 20Q4 2019 Result Highlights
Revenue Outperformance Driven by Phenomenal Strength of Major Franchises in Korea
Revenues Operating Income Net Income2
Exceeded our outlook. Driven by the Below our outlook. The revenue Below our outlook. While recording a ¥11.0
strong performances of Korea MapleStory outperformance was more than offset by billion deferred tax asset related to the
and FIFA ONLINE 41. Revenues from the a ¥9.2 billion impairment loss primarily on foreign tax credit at Neople, this was more
new mobile MMORPG V4 as well as China assets related to Pixelberry, including than offset by the operating income
Dungeon&Fighter were slightly above our goodwill. underperformance and a ¥11.4 billion FX
expectations. loss primarily on U.S. dollar-denominated
cash deposits.
(Unit: ¥ millions, except per share data) (Unit: ¥ billions)
2
Q4 2018 Q4 2019 Outlook Q4 2019 YoY % Revenues Operating Income Net Income
Revenues ¥46,081 ¥41,397 ~ ¥44,454 ¥49,243 7%
3
PC 32,724 27,588 ~ 29,472 33,647 3% 49.2
46.1
Mobile 13,357 13,809 ~ 14,982 15,596 17%
Operating income 3,907 5,976 ~ 8,208 4,518 16%
2
Net income 6,504 7,565 ~ 9,421 3,275 (50%)
Earnings per share 7.27 8.44 ~ 10.52 3.68
Exchange rates
10.03 9.26 6.5
100 KRW/JPY 9.14 9.14 (8%) 3.9 4.5 3.3
CNY/JPY 16.30 15.31 15.31 15.46 (5%)
USD/JPY 112.90 108.70 108.70 108.76 (4%) Q4 2018 Q4 2019 Q4 2018 Q4 2019 Q4 2018 Q4 2019
1 Official titles are EA SPORTS™ FIFA ONLINE 4 (PC) 2 Net income refers to net income attributable to owners of the parent, as stated in
and EA SPORTS™ FIFA ONLINE 4 M (mobile). Nexon’s consolidated financial results.
3 PC revenues include other revenues besides PC online games and mobile games.
© 2020 NEXON Co., Ltd. All Rights Reserved. 21Q4 2019 Revenue Breakdown
Q4 2019 YoY % Change Q4 2019 Revenue by Region1
Constant Constant Europe and Others2
(Unit: ¥ millions) Q4 2018 As-Reported As-Reported North America
Currency4 Currency4 8%
6%
Revenue by Region1
China ¥17,863 ¥15,632 ¥16,447 (12%) (8%) Japan
5%
Korea 15,567 24,393 26,421 57% 70% China
32%
Japan 4,321 2,262 2,338 (48%) (46%)
North America 4,309 3,189 3,343 (26%) (22%)
2
Europe and Others 4,021 3,767 4,004 (6%) (0%)
Korea
Nexon Total 46,081 49,243 52,553 7% 14% 49%
Revenue by Platform
PC3 32,724 33,647 35,833 3% 10%
Q4 2019 Revenue by Platform
Mobile 13,357 15,596 16,720 17% 25%
Nexon Total 46,081 49,243 52,553 7% 14%
Mobile
FX Rate 32%
100 KRW/JPY 10.03 9.26 10.03 (8%)
CNY/JPY 16.30 15.46 16.30 (5%) PC3
USD/JPY 112.90 108.76 112.90 (4%) 68%
1 Based on the regions in which 2 "Europe and Others" includes Europe 3 PC revenues include other 4 Constant currency is a non-GAAP measure used to show performance unaffected 5 For the KPIs (MAU, Pay Rate and ARPPU)
revenues originate; not a as well as other Asian countries and revenues besides PC online by fluctuations in foreign currency exchange rates. Constant-currency basis of PC online games, please refer to
representation of revenues South American countries. games and mobile games. amounts are calculated using the average foreign currency exchange rates for appendix of this presentation.
according to Nexon entities. 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.
© 2020 NEXON Co., Ltd. All Rights Reserved. 22China / Korea – Highlights
China Korea
Exceeded our outlook. Dungeon&Fighter’s revenue was slightly above Q4 was our highest quarter ever. Outperformance primarily driven by
our expectation. MapleStory and FIFA ONLINE 43 as well as V4 and MapleStory M
• Dungeon&Fighter • MapleStory: Strong item sales in the latter half of the quarter supported by well-
• Continued National Day update (9/24 – 11/28); conducted multiple in-game received in-game events and Winter update. Revenue grew 73% Y/Y; surpassed
events and small-scale updates previous Q4 record achieved in 2018
3 3
• MAUs decreased both Y/Y and Q/Q primarily due to reduced bots in relation to • FIFA ONLINE 4 / FIFA ONLINE 4 M
the implementation of a stricter measure to verify player identity which was • Stronger-than-expected sales in the latter half of the quarter supported by successful
made in October. introduction of legendary players, seasonal events and sales promotions
• Paying users increased slightly Q/Q benefiting from multiple in-game events • Combined PC and mobile revenues grew significantly Y/Y compared with Q4 2018, when
and small-scale updates; remained at low level since Q3 and decreased Y/Y its revenue had reached approximately the level of FIFA ONLINE 33 in Q4 2017.
• ARPPU and revenue decreased Q/Q due to typical seasonality. Y/Y revenue • V4: Launched on November 7. Off to a good start; December revenue exceeded our
decreased; while ARPPU increased due to decreased light users compared to
expectation. Stable performance despite the intense competition
Q4 2018
• MapleStory M: Recorded the highest Q4 revenue; grew 97% Y/Y
57,550
(Unit: ¥ millions) YoY% change: YoY% change:
As Reported: -12% As Reported: +57%
Constant Currency1: -8% Constant Currency1: +70%
22,357 23,657 24,393
21,282 19,387
17,863 17,783
15,632 15,567
15,765 PC2
16,798 13,844 19,269
16,014 15,172 PC2 12,348
1,769 5,559 5,543 4,388
8,628 Mobile
460 Mobile 3,219
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
1 Constant currency is a non-GAAP measure used to show performance unaffected by fluctuations in foreign 2 PC revenues include other revenues besides PC online games and mobile games.
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, 3 Official titles are EA SPORTS™ FIFA Online 3 (PC), EA SPORTS™ FIFA Online 3 M (mobile),
we calculate royalty revenues from China Dungeon&Fighter by applying the same CNY/USD, USD/KRW and EA SPORTS™ FIFA ONLINE 4 (PC) and EA SPORTS™ FIFA ONLINE 4 M (mobile). © 2020 NEXON Co., Ltd. All Rights Reserved. 23
KRW/JPY exchange rates from last year's same fiscal quarter.Japan / North America / Europe and Others1 – Highlights
Japan North America Europe and Others1
4
Below our outlook due to lower-than-expected Outperformance primarily driven by Choices . Outperformance primarily driven by MapleStory M
performances of mobile games including Y/Y decrease primarily due to the tough and Spiritwish global service launched in October.
MapleStory M. Revenues down Y/Y comparisons with Q4 2018, as well as Y/Y decrease primarily to the tough comparisons
4 4
• Y/Y revenues benefited from MapleStory M and Choices with Q4 2018, as well as Choices
MapleStory 2 – both launched in Q2 2019. These were • Y/Y decrease primarily due to the deceleration of • Y/Y revenues benefited from Spiritwish, while these
4
more than offset by the deceleration of Dynasty Choices , Darkness Rises and MapleStory M were more than offset by the deceleration of
Warriors: Unleashed and FAITH launched in 2018 • Darkness Rises and MapleStory M decreased Y/Y MapleStory M, Darkness Rises, and Choices4.
• Disposed gloops’ browser-based mobile business on due to tough comparisons with Q4 2018 just after • MapleStory M and Darkness Rises decreased Y/Y due
December 1st. Browser revenue contributed a month their services began. to tough comparisons with Q4 2018 just after their
less versus Q4 2018 services began.
(Unit: ¥ millions) YoY% change: YoY% change: YoY% change:
As Reported: -48% As Reported: -26% As Reported: -6%
Constant Currency2: -46% Constant Currency2: -22% Constant Currency2: -0%
5,171
4,608 4,588 4,434
4,321 4,309 4,021
3,833 4,166 4,000 1,580 3,767
866 1,290
839 3,151 752 740 3,332 3,189 1,511
889 964
1,015 1,132 PC3
965 2,262 795 882 PC3
3,482 3,742 696 PC3 3,557 3,426 3,591 3,298
2,818 3,111 3,057 2,923 2,635
2,186 2,537 2,307 Mobile
Mobile
1,566 Mobile
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
1 "Europe and Others" includes Europe as well as other Asian countries and South American countries. 3 PC revenues include other revenues besides PC online games and mobile games.
2 Constant currency is a non-GAAP measure used to show performance unaffected by fluctuations in foreign currency exchange 4 Official title is Choices: Stories You Play.
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. © 2020 NEXON Co., Ltd. All Rights Reserved. 24Q1 2020 Outlook
© 2020 NEXON Co., Ltd. All Rights Reserved. 25Q1 2020 Financial Outlook
Expect Continued Strength in Korea; Revenues Expected to Decrease Y/Y Primarily in China
Revenues Operating Income Net Income4
• Constant currency1 down 18% to 10% • Expect a Y/Y decrease primarily due • Expect a Y/Y decrease primarily due
• Y/Y growth in Korea, driven by V4 and to the revenue decline to the operating income decline
strength in MapleStory and FIFA ONLINE 42. • Expect lower Other Expense. • Expect lower Finance Income.
These are expected to be more than offset Recorded a ¥2.9 billion impairment Recorded a ¥6.3 billion FX gain in Q1
by Y/Y decrease in China Dungeon&Fighter. loss3 in Q1 2019 2019
(Unit: ¥ millions, except per share data) (Unit: ¥ billions) Q1 2020 (High-end)
Q1 2019 Q1 2020 Outlook YoY %
Revenues ¥93,077 ¥74,038 ~ ¥80,689 (20%) ~ (13%)
Revenues Operating Income Net Income4
5 (24%) (18%)
PC 77,639 58,730 ~ 63,979 ~
Mobile 15,438 15,308 ~ 16,711 (1%) ~ 8%
Operating income 52,601 35,982 ~ 42,098 (32%) ~ (20%)
Net income 4 53,400 31,731 ~ 36,638 (41%) ~ (31%) 93.1
80.7
Earnings per share 59.67 36.00 ~ 41.57
FX Rate Assumptions 52.6 53.4
100 KRW/JPY 9.80 9.39 9.39 (4%) 42.1
CNY/JPY 16.33 15.80 15.80 (3%) 36.6
USD/JPY 110.20 109.89 109.89 (0%)
Q1
Forex sensitivity6: Every one Japanese yen move against the U.S. dollar would have the following
impact on our financials for Q1 2020
Revenues 0.70 billion yen
Operation Income 0.37 billion yen 2019 2020 2019 2020 2019 2020
1 Constant currency is a non-GAAP measure used to show performance unaffected by 2 Official titles are EA SPORTS™ FIFA ONLINE 4 (PC) and EA SPORTS™ FIFA ONLINE 6 In most situations, the exchange rates of both the South Korean Won and the
fluctuations in foreign currency exchange rates. Constant-currency basis amounts are 4 M (mobile). Chinese Yuan are linked to the U.S. dollar. For simplicity, forex sensitivity is
calculated using the average foreign currency exchange rates for the comparable period in 3 In Q1 2019, we recorded a ¥2.9 billion impairment loss primarily on prepaid royalties calculated based on the assumption that Korean Won and Chinese Yuan move
the prior year and applied to the current period. As an example, we calculate royalty 4 Net income refers to net income attributable to owners of the parent, as stated similarly against Japanese yen when there is an exchange rate movement in
revenues from China Dungeon&Fighter by applying the same CNY/USD, USD/KRW and in Nexon’s consolidated financial results. U.S. dollar and Japanese yen.
KRW/JPY exchange rates from last year's same fiscal quarter. © 2020 NEXON Co., Ltd. All Rights Reserved. 26
5 PC revenues include other revenues besides PC online games and mobile games.Q1 2020 China / Korea Outlook
China Korea
Expect Y/Y decrease of Dungeon&Fighter’s revenue to be larger than Expect revenues to increase Y/Y driven by MapleStory, FIFA ONLINE 43,
the contribution from KartRider Rush Plus V4 and the new mobile RPG Counterside, which launched on February 4th
Dungeon&Fighter : • MapleStory : Expect Y/Y growth on top of the 69% Y/Y growth in Q1 2019
• Expect revenue to decline Y/Y. In Q1 2019, sales from the Lunar New Year driven by the successful Winter update and Lunar New Year sales promotions
package offering were exceptionally strong; paying users were at a high • FIFA ONLINE 43 : Good momentum continues. Expect Y/Y growth driven by the
level. strong sales from the Lunar New Year package offerings
• Introduced Lunar New Year update (1/14); in March, slated to launch the • Mobile : Expect Y/Y growth, benefiting from V4 and Counterside, as well as
new key update which addresses the primary feedback received from our growth in MapleStory M and FIFA ONLINE 4 M3
players, including the Level Cap release and the third awakening1.
• No notable lift expected in the performance before the new key update.
(Unit: ¥ millions)
Q1 2019 Q1 2020 Outlook YoY % Change Q1 2019 Q1 2020 Outlook YoY % Change
Constant Constant
Actual Low-end High-end As-Reported 2 Actual Low-end High-end As-Reported 2
Currency Currency
57,550 33,455 ~ 37,600 (42%) ~ (35%) (40%) ~ (32%) 22,357 32,258 ~ 33,995 44% ~ 52% 51% ~ 59%
57,550
37,600 Q1 33,995 Q1
22,357
2019 2020 2019 2020
(High-end) (High-end)
1 Third awakening allows players to gain new skills for their characters
2 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. © 2020 NEXON Co., Ltd. All Rights Reserved. 27
3 Official titles are EA SPORTS™ FIFA ONLINE 4 (PC) and EA SPORTS™ FIFA ONLINE 4 M (mobile).Q1 2020 Japan / North America /
Europe and Others1 Outlook
Japan North America Europe and Others1
Expect revenues to decrease Y/Y Expect revenues to decrease Y/Y Expect revenues to decrease Y/Y
• Expect to benefit from MapleStory M, which primarily due to the deceleration of • Y/Y revenue decrease primarily due to the
launched in Q2 2019 Choices3, Darkness Rises and AxE deceleration of AxE, Choices3, Darkness Rises
• Expect this to be more than offset by: and MapleStory M
• Y/Y decrease in revenues from browser-based • Launched the new mobile game World of
mobile business due to the disposition of gloops Dragon Nest in South East Asia on January 8th
• Deceleration of FAITH, Dynasty Warriors:
Unleashed and OVERHIT
(Unit: ¥ millions)
Q1 2019 Q1 2020 Outlook YoY % Change Q1 2019 Q1 2020 Outlook YoY % Change Q1 2019 Q1 2020 Outlook YoY % Change
As- Constant As- Constant As- Constant
Actual Low-end High-end 2 Actual Low-end High-end 2 Actual Low-end High-end 2
Reported Currency Reported Currency Reported Currency
3,833 1,596 ~ 1,742 (58%) ~ (55%) (57%) ~ (54%) 4,166 2,481 ~ 2,692 (40%) ~ (35%) (40%) ~ (35%) 5,171 4,247 ~ 4,660 (18%) ~ (10%) (16%) ~ (8%)
5,171 4,660 Q1
3,833 4,166
2,692 Q1
1,742 Q1
2019 2020 2019 2020 2019 2020
(High-end) (High-end) (High-end)
1 "Europe and Others" includes Europe as well as other 2 Constant currency is a non-GAAP measure used to show performance unaffected by fluctuations in foreign currency exchange rates.
Asian countries and South American countries. 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.
© 2020 NEXON Co., Ltd. All Rights Reserved. 28
3 Official title is Choices: Stories You Play.Q1 2020 Operating Income Outlook
(Unit: ¥ billions)
- Decreased revenues
Y/Y Operating Income Comparison
- Increased HR costs1, primarily due to annual
salary hike
12.4
2.2 - Increased variable costs including:
1.0 1.0 1.7
• PG fees associated with revenue growth in Korea
• Royalty costs in relation to increased contributions
from publishing titles
52.6
42.1 + Decreased marketing costs. Expect a decrease
in promotion costs for Choices2 and decreased
new title launches compared with Q1 2019
+ Others include:
1
Operating Income Revenue HR Costs Variable Costs Marketing Costs Others Operating Income • Decreased impairment loss3 of ¥2.9 billion
2019 Q1 decrease 2020 Q1
(High-end)
recorded in Q1 2019
• Increased amortization costs on intangible
assets associated with the launch of V4
• Decreased “Other Income” recorded in Q1 2019
1 HR costs includes HR cost (COGS), HR cost (SG&A) and R&D (SG&A).
2 Official title is Choices: Stories You Play.
3 In Q1 2019, we recorded a ¥2.9 billion impairment loss primarily on prepaid royalties. © 2020 NEXON Co., Ltd. All Rights Reserved. 29Shareholder Return
• Completed the share repurchase program of ¥30 billion initiated in
September 2019 on January 29th, 2020
• On February 13th, 2020, the board of directors approved the plan to:
• Cancel the entire shares bought back on February 28, 2020.
• Reinitiate a shareholder dividend of ¥2.5 per share to shareholders
registered on our shareholder register as of December 31, 2019
• Pay the same dividend per share at the interim and year-end of FY 2020
© 2020 NEXON Co., Ltd. All Rights Reserved. 302020 China Dungeon&Fighter Update Schedule
Period Tier 1 Content Update 2019 2020
Lunar New Year Update January 21st January 14th
Q1
Level Cap Release January 21st March
Labor Day Update April 23rd TBD
Q2
Anniversary Update June 18th TBD
Summer Update July 4th TBD
Q3
National Day Update September 24th TBD
Q4 Winter Update N/A TBD
Indicates financially important updates
* 2020 update schedule is subject to change depending on various operational factors
© 2020 NEXON Co., Ltd. All Rights Reserved. 31Pipeline1
CHINA KOREA NORTH AMERICA & REST OF THE WORLD
The kingdom of
SINoALICE the winds: Yeon2 KartRider: Drift2 SINoALICE KartRider: Drift2
Arcane Citadel: Dynasty Warriors 9
MABINOGI MOBILE2 TALESWEAVERM2 KurtzPel Duel of Mages Final Fantasy XI R2 Mobile
Dungeon&Fighter 2D Mobile2
Final Fantasy XI R2
JAPAN
Dynasty Warriors 9 Dungeon&Fighter Dynasty Warriors 9
Mobile 2D Mobile2 Mobile Project BBQ3 Embark Studios
Final Fantasy XI R2
PC ONLINE MOBILE CONSOLE
1 Chart is illustrative excerpt of pipeline. 2 Games based on original IPs. 3 PC 3D action RPG based on Dungeon&Fighter universe.
4 The letters, graphics, symbols, logos and other marks, and illustrations, characters and other works, which are shown in this material are trademarks,
registered trademarks, copyrighted works or other legally protected materials owned by respective right holders.
© 2020 NEXON Co., Ltd. All Rights Reserved. 32Appendix
© 2020 NEXON Co., Ltd. All Rights Reserved. 33Summary of Results and Key Operational Metrics
(Unit: ¥ millions, except per share data)
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 YoY%
(By Region)
China ¥60,704 ¥23,183 ¥31,216 ¥17,863 ¥57,550 ¥21,282 ¥17,783 ¥15,632 (12%)
Korea 19,596 15,459 23,168 15,567 22,357 19,387 23,657 24,393 57%
Japan 2,925 3,281 3,541 4,321 3,833 4,608 3,151 2,262 (48%)
North America 4,074 3,224 4,891 4,309 4,166 4,000 3,332 3,189 (26%)
1
Europe and Others 3,215 2,647 6,516 4,021 5,171 4,588 4,434 3,767 (6%)
(By Platform)
2
PC 76,074 37,037 53,036 32,724 77,639 38,125 38,554 33,647 3%
Mobile 14,440 10,757 16,296 13,357 15,438 15,740 13,803 15,596 17%
Revenue 90,514 47,794 69,332 46,081 93,077 53,865 52,357 49,243 7%
Operating income 54,729 16,012 23,712 3,907 52,601 12,987 24,419 4,518 16%
Net income 3 46,615 32,248 22,305 6,504 53,400 19,145 39,844 3,275 (50%)
Earnings per share 52.80 36.24 24.98 7.27 59.67 21.37 44.42 3.68
FX rate
100 KRW/JPY 10.11 10.12 9.96 10.03 9.80 9.43 9.00 9.26 (8%)
CNY/JPY 17.07 17.10 16.39 16.30 16.33 16.10 15.32 15.46 (5%)
USD/JPY 108.30 109.07 111.46 112.90 110.20 109.90 107.35 108.76 (4%)
KPI (Excluding Mobile)
MAU (millions) 35.3 33.3 37.5 32.7 35.0 34.6 35.4 27.4 (16%)
Pay Rate 19.3% 20.5% 16.3% 16.5% 16.5% 16.4% 11.5% 14.8%
ARPPU (as-reported) 8,028 3,313 5,260 3,392 9,265 3,885 4,837 4,223 24%
1 "Europe and Others" includes Europe as well as other 2 PC revenues include other revenues besides PC 3 Net income refers to net income attributable to
Asian countries and South American countries. online games and mobile games. owners of the parent, as stated in Nexon’s
consolidated financial results.
© 2020 NEXON Co., Ltd. All Rights Reserved. 34COGS and SG&A
(Unit: ¥ millions)
FY2018 FY2019
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
1
Total Cost of Revenue ¥14,337 ¥13,135 ¥14,980 ¥15,101 ¥15,899 ¥15,055 ¥14,180 ¥14,451
2
Royalty 3,979 2,980 3,868 3,626 4,510 4,119 4,344 3,694
3
HR cost (COGS) 6,277 6,394 6,833 7,076 7,163 6,685 6,010 7,367
4
Other (COGS) 4,081 3,761 4,279 4,399 4,226 4,251 3,826 3,390
Total SG&A 1 21,474 20,562 23,725 24,039 22,055 22,178 19,189 21,695
HR cost 5,434 5,265 5,305 5,500 4,770 4,756 3,964 4,475
5
PG fee 5,553 4,433 6,492 5,458 6,108 5,829 4,952 5,661
R&D 2,124 2,412 2,674 3,252 3,266 3,499 3,950 4,180
Marketing/advertising expenses 5,631 5,610 6,279 6,846 5,194 5,500 3,767 4,260
Depreciation and amortization 656 605 1,297 831 866 792 820 1,490
Other 2,076 2,237 1,678 2,152 1,851 1,802 1,736 1,629
6
Other Income 359 3,006 382 116 429 181 7,708 741
7
Other Expense 333 1,091 7,297 3,150 2,950 3,826 2,277 9,320
Includes: impairment loss 319 805 7,266 2,985 2,890 3,648 2,228 9,240
1 Breakdown of COGS and SG&As are unaudited. 4 Other (COGS) primarily consists of depreciation and 5 PG fee in SG&A includes commissions made to 6 Other Income includes other non-operating income, reversal of
amortization of assets related to existing games, external payment gateway companies when users deferred revenue, gain on sale of properties, gain on change in
2 Royalty includes royalties paid to third-party connection fees (mainly comprised of co-location and purchase in-game items in PC Online games that we equity and gain on step acquisition.
developers in order for us to obtain the right to datacenter fees, internet bandwidth and access fees), service. It also includes mobile carrier-related
publish their games. and the costs of purchasing and maintaining our commissions we pay regarding our Japanese mobile 7 Other Expense includes other non-operating expenses, loss on
servers and computer equipment. browser games, commissions we pay to Apple/Google sale/disposal of properties, loss on impairment of tangible
3 HR cost includes salaries, bonuses and benefits for regarding our mobile native games globally, and fixed assets, loss on impairment of intangible assets, loss on
our live game developers, who support post launch platform commission fees related to mobile browser impairment of other fixed assets and loss on change in equity.
servicing, updating and support for our games. games. It also includes impairment loss of game IPs and goodwill.
© 2020 NEXON Co., Ltd. All Rights Reserved. 35P&L Below Operating Income
(Unit: ¥ millions)
FY2018 FY2019
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Operating Income ¥54,729 ¥16,012 ¥23,712 ¥3,907 ¥52,601 ¥12,987 ¥24,419 ¥4,518
1
Finance Income 1,869 18,026 2,849 3,406 9,810 9,663 18,910 3,051
2
Finance Costs 3,225 222 1,856 926 265 466 723 12,212
Equity profit / (loss) of affiliates,
(23) (187) (97) (530) (334) (101) 14 96
equity method companies
Income / (Loss) before Income Tax 53,350 33,629 24,608 5,857 61,812 22,083 42,620 (4,547)
Tax expense 6,845 1,613 4,982 1,027 9,005 3,588 3,596 (7,457)
Non-controlling interests (110) (232) (2,679) (1,674) (593) (650) (820) (365)
Net income 3 46,615 32,248 22,305 6,504 53,400 19,145 39,844 3,275
1 Finance Income includes interest income primarily on cash deposits. 2018 2 2018 Q1, Q3 and 2019 Q4 Finance Costs are primarily caused by FX 3 Net income refers to net income attributable to owners of the parent, as
Q2, Q4 and 2019 Q1, Q2, Q3 Finance Income includes FX conversion gains conversion loss related to foreign currency deposits and accounts stated in Nexon’s consolidated financial results.
related to foreign currency deposits and accounts receivable. receivable.
© 2020 NEXON Co., Ltd. All Rights Reserved. 36Cash Flow Statement
(Unit: ¥ millions)
12 months ended 12 months ended
December 31, December 31,
2018 2019
Cash flows from operating activities ¥118,018 ¥105,073
Cash flows from investing activities (68,183) (28,625)
Cash flows from financing activities 8,260 (27,742)
Net increase / (decrease) in cash and cash equivalents 58,095 48,706
Cash and cash equivalents at beginning of fiscal year 153,242 205,292
Effect of exchange rate change on cash and cash equivalents (6,045) (362)
Cash and cash equivalents at end of fiscal year 205,292 253,636
© 2020 NEXON Co., Ltd. All Rights Reserved. 37Balance Sheet
(Unit: ¥ millions)
December 31, December 31, December 31, December 31,
2018 2019 2018 2019
Asset Liability
Current Assets Current liabilities
Cash and cash equivalents ¥205,292 ¥253,636 Current tax liabilities 9,352 7,403
Other deposits 276,550 257,331 Current borrowings 4,324 2,223
Other current assets 52,818 42,529 Others 28,833 31,542
Total current assets 534,660 553,496 Total current liabilities 42,509 41,168
Noncurrent assets Noncurrent liabilities
Tangible assets 25,166 23,481 Non-current borrowings - -
Goodwill 26,529 42,480 Others 42,012 46,789
Intangible assets 26,021 21,519 Total noncurrent liabilities 42,012 46,789
Others 37,622 78,112 Total liabilities 84,521 87,957
Total noncurrent assets 115,338 165,592
Total assets 649,998 719,088 Shareholders' equity
Capital stock 14,402 17,967
Capital surplus 34,814 35,688
Treasury shares (1) (27,219)
Other equity interest 64,068 38,511
Retained earnings 441,985 555,038
Non-controlling interests 10,209 11,146
Total equity 565,477 631,131
Total liabilities and total equity 649,998 719,088
© 2020 NEXON Co., Ltd. All Rights Reserved. 38Notice of correction to P&L by Reporting Segment
P&L by Reporting Segment1
Corrections has been made to Q1 2019 Investor Presentation, disclosed on May 10,
2019. Corrected “Revenue from external customers” of each reporting segment in
Q1 2019 are underlined.
(Unit: ¥ millions)
FY2018 FY2019
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Japan
Revenue from external customers ¥2,469 ¥2,112 ¥2,593 ¥2,980 ¥2,469 ¥1,884 ¥1,952 ¥1,344
Segment profit/(loss) (1,756) (2,018) (1,806) (1,649) (958) (1,165) (455) (912)
Korea
Revenue from external customers 81,826 40,857 60,883 36,851 84,572 47,079 45,521 43,261
Segment profit/(loss) 57,739 17,962 33,661 11,275 56,865 19,038 20,849 15,513
China
Revenue from external customers 646 597 878 1,206 870 669 695 587
Segment profit/(loss) 353 242 523 848 596 324 381 256
North America
Revenue from external customers 5,440 4,187 4,943 4,723 4,716 3,862 3,730 3,648
Segment profit/(loss) (1,460) (1,951) (1,704) (3,375) (1,385) (1,613) (1,233) (1,296)
Others
Revenue from external customers 133 41 35 321 450 371 459 403
Segment profit/(loss) (177) (135) (55) (158) 2 36 (560) (435)
Adjustments
Revenue from external customers - - - - - - - -
Segment profit/(loss) 4 (3) 8 0 2 12 6 (29)
Total
Revenue from external customers 90,514 47,794 69,332 46,081 93,077 53,865 52,357 49,243
Segment profit/(loss) 54,703 14,097 30,627 6,941 55,122 16,632 18,988 13,097
1 Representation based on location of Nexon’s entities; not based on regions in which revenues originate.
© 2020 NEXON Co., Ltd. All Rights Reserved. 39Number of Employees by Reporting Segment
March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31,
Full-time employees 2018 2018 2018 2018 2019 2019 2019 2019
Japan 545 551 557 535 535 516 503 422
Korea 4,439 4,878 4,988 5,125 5,168 5,232 5,225 5,149
China 227 218 219 223 223 204 207 207
North America 424 428 465 479 487 485 422 418
Others 81 74 78 79 86 131 212 232
Total 5,716 6,149 6,307 6,441 6,499 6,568 6,569 6,428
© 2020 NEXON Co., Ltd. All Rights Reserved. 40NJ Corporate Entity Financial Statement1 (1)
(Unit: ¥ millions)
Condensed Income Statement FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Revenue ¥11,236 ¥7,987 ¥5,815 ¥5,208 ¥5,927 ¥7,024
Cost of revenue 4,829 3,679 3,117 3,134 3,438 3,510
Gross profit 6,407 4,308 2,698 2,074 2,489 3,514
SG&A 7,275 7,585 6,470 6,736 6,941 9,447
Operating profit / (loss) (868) (3,277) (3,772) (4,662) (4,452) (5,933)
Non-operating income 14,186 28,335 19,163 636 5,049 15,646
Includes: dividend income 12,926 24,613 18,869 22 4,612 15,025
Non-operating expenses 603 526 1,246 1,826 1,969 9,352
Ordinary income / (loss) 12,715 24,532 14,145 (5,852) (1,372) 361
Extraordinary income - 244 6,443 852 58 109
Extraordinary losses 4,451 18,717 6,897 39,573 9,643 138
Income / (loss) before income taxes 8,264 6,059 13,691 (44,573) (10,957) 332
Tax expense 725 4,656 5,519 (201) 234 755
Net income / (loss) 7,539 1,403 8,172 (44,372) (11,191) (423)
1 Excerpt of NEXON Co., Ltd.'s standalone financial statements included in Annual Securities Report (Yuuka Shouken
Houkokusho). Annual Securities Report for FY2019 will be released in late March 2020. Please note NEXON Co., Ltd.'s
standalone financial statements are based on J-GAAP (Nexon Group's consolidated financial statements are based on IFRS).
© 2020 NEXON Co., Ltd. All Rights Reserved. 41NJ Corporate Entity Financial Statement1 (2)
(Unit: ¥ millions)
December 31, December 31, December 31, December 31, December 31, December 31,
Condensed Balance Sheet
2013 2014 2015 2016 2017 2018
Current assets ¥45,632 ¥46,760 ¥70,444 ¥52,632 ¥42,946 ¥55,209
Includes: cash and cash equivalents 32,367 30,711 68,997 49,531 41,868 53,096
Non-current assets 135,011 101,337 38,190 6,438 5,494 4,836
Property, plant and equipment 183 222 200 74 7 3
Intangeble assets 56 60 66 - - -
Investments and other assets 134,772 101,055 37,924 6,364 5,487 4,833
Total assets 180,643 148,097 108,634 59,070 48,440 60,045
Current liabilities 13,103 16,345 3,506 2,341 1,796 2,303
Non-current liabilities 39,644 23,154 498 448 457 415
Total liabilities 52,747 39,499 4,004 2,789 2,253 2,718
Shareholder's equity 110,163 98,122 99,779 50,669 41,230 50,838
Capital stock 51,868 52,332 56,227 3,307 9,183 14,199
Capital surplus 51,728 42,192 36,087 88,621 43,021 36,846
Includes: other capital surplus 50,000 40,000 30,000 86,064 34,588 23,397
Retained earnings 6,567 3,598 7,465 (41,259) (10,974) (206)
Includes: other retained earnings 6,130 2,724 6,160 (41,476) (11,191) (423)
Treasury shares (0) - - (0) - (0)
Valuation and translation adjustments 15,844 6,536 246 77 (10) (21)
Subscription rights to shares 1,889 3,940 4,605 5,535 4,967 6,510
Total net assets 127,896 108,598 104,630 56,281 46,187 57,327
December 31, December 31, December 31, December 31, December 31, December 31,
Statement of changes in equity (excerpt)
2013 2014 2015 2016 2017 2018
Payment of dividends (4,807) (4,372) (4,305) (4,352) - -
Acquisition of treasury shares (0) (10,000) (10,000) (5,000) (10,000) (1)
Cancellation of treasury shares - 10,000 10,000 5,000 10,000 -
1 Excerpt of NEXON Co., Ltd.'s standalone financial statements included in Annual Securities Report (Yuuka Shouken
Houkokusho). Annual Securities Report for FY2019 will be released in late March 2020. Please note NEXON Co., Ltd.'s
standalone financial statements are based on J-GAAP (Nexon Group's consolidated financial statements are based on IFRS).
© 2020 NEXON Co., Ltd. All Rights Reserved. 42Historical Financials
(Unit: ¥ billions)
Revenue by Region1 Revenue by Platform
253.7
248.5 253.7
248.5
234.9 16.4
18.0 234.9
12.6 16.5
14.7 54.9
9.3 14.1
13.9 60.6
17.1 51.4
190.3
183.1 190.3
172.9 7.9 183.1
9.0 9.7 172.9
5.1 8.1 73.8
155.3 5.5 21.0 155.3 42.0
16.9 80.5 89.8 43.3
6.6 34.2
5.4 29.9
28.4
36.4
108.4 77.0 108.4
74.2
6.7 8.2
5.4 65.4 198.9
183.5 188.0
19.2 43.0
148.3
133.0 138.7 139.8
28.7 127.0
115.4 112.2
100.2
75.4 74.2
63.9 67.0
48.4
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
2
China Korea Japan North America Europe and Others PC 3 Mobile
1 Based on the regions in which revenues originate; not a 2 "Europe and Others" includes Europe as well as other 3 PC revenues include other revenues besides PC online
representation of revenues according to Nexon entities. Asian countries and South American countries. games and mobile games.
© 2020 NEXON Co., Ltd. All Rights Reserved. 43Key Titles by Region1
China Korea Japan N. America and Rest of the World
Dungeon&Fighter MapleStory Dungeon&Fighter KartRider MapleStory M MapleStory DomiNations
EA SPORTSTM EA SPORTSTM
MapleStory FIFA ONLINE 4 FIFA ONLINE 4 M MapleStory M MapleStory MapleStory M Darkness Rises
PC ONLINE
KartRider Choices:
Rush Plus Sudden Attack Mabinogi V4 Mabinogi Stories You Play Moonlight Blade MOBILE
1
FY2019 Revenue by Region FY2019 Revenue by Platform
(Unit: ¥ billions)
Europe and Others2
112.2 7%
North America
6%
89.8
Japan
Mobile
6%
24%
China
45%
14.7 18.0 Korea
13.9 PC3
36% 76%
China Korea Japan North Europe
2
America and Others
1 Based on the regions in which revenues originate; not a 2 "Europe and Others" includes Europe as well as other 3 PC revenues include other revenues besides PC online
representation of revenues according to Nexon entities. Asian countries and South American countries. games and mobile games.
© 2020 NEXON Co., Ltd. All Rights Reserved. 44Long-term Growth Vision1
REVENUE
M&A New Games
Live Games
2019
YEAR
1 Above graph is illustrative and not to scale.
© 2020 NEXON Co., Ltd. All Rights Reserved. 45Glossary of Terms
Term / Abbreviation Meaning
AOS is a sub-genre of the real-time strategy genre, in which two teams of players compete with each other in
AOS
discrete games, with each player controlling a single character through an RTS-style interface.
FPS (first person shooter) A game in which the player plays from the point of view of the game character in three-dimensional graphics
A game that is usually played from a third-person on perspective, in which the player controls vast numbers of in-
RTS (real-time strategy)
game characters in a tactical scenario
MMORPG An online role-playing game that has a “massive” number (usually several hundred or more) of players who play
(massively multiplayer online role playing game) concurrently
Monthly total number of users who logged in and played Nexon’s PC online games.
MAU MAU in this presentation is the quarterly average of such numbers. Nexon’s PC online games include game
(monthly active user) developed and serviced by Nexon group, games developed by Nexon group and serviced by non-Nexon group
publishers, and game developed by non Nexon group acquired publishing rights.
The amount obtained by dividing monthly PC online game gross revenues by the number of monthly paying users.
ARPPU
ARPPU in this presentation is the quarterly average of such numbers. Gross revenues used in the calculation are in-
(average revenue per paying user) game sales, and exclude other revenues included in PC revenues such as sales from PC café time charge.
Pay Rate The percentage rate obtained by dividing the number of monthly paying users by the number of monthly active users.
Pay rate in this presentation is calculated using the quarterly average of such numbers.
The maximum number of users concurrently accessing a game at a particular moment. MCCU is generally used to
MCCU (maximum concurrent users) measure the popularity of a game
A trial version (beta version) of a game offered for a certain period of time to a limited number of users or groups.
Closed Beta Test (CBT) A Limited Beta Test in an even smaller-scale trial mode of a game with fewer numbers of users or group
A trial version (beta version) of a game a certain period of time without restrictions on participation.
Open Beta Test (OBT) OBT is usually conducted after CBT.
Tier One Update Large scale update to existing PC games typically launched in Q1 or Q3 around peak season
Tier Two Update Smaller update to existing PC games released throughout the year
Games that are designed to be played continuously for hours and enable thousands of concurrent users to interact
Immersive Games with each other in real time. Our games are architected to evolve over years., in contrast to packaged goods games,
which often have finite story lines and comparatively less open-ended player engagement.
© 2020 NEXON Co., Ltd. All Rights Reserved. 46Disclaimer
This presentation is prepared to offer reference information about NEXON group to the 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. NEXON Co., Ltd. (“Nexon”) has not verified and
would assume no responsibility for the accuracy, appropriation, or completeness thereof. This presentation does not
contain all relevant information relating to Nexon or the sale of its shares, including, without limitation, the information
that would be stated under the captions “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and “Business” in an annual report. Any investment decision with respect to any shares of
Nexon should be made solely upon the basis of the information contained in the disclosure documents and is qualified
in its entirety by reference to the detailed information appearing in the disclosure documents.
This presentation includes non-GAAP and non-IFRS financial measures, including but not limited to key performance
indicators, as well as ratios calculated on the basis thereof. These non-GAAP and non-IFRS financial measures should
not be considered in isolation or as a substitute for the most directly comparable financial measures included in our
consolidated financial statements and presented in accordance with IFRS.
This presentation includes forward-looking statements. In some cases, you can identify forward-looking statements by
terms such as “anticipate”, “assume”, “believe”, “estimate”, “expect”, “forecast”, “may”, “plan”, “potential”, “predict”,
“seek”, “should”, or “will”, or by other similar terminology. These statements discuss expectations, identify strategies,
contain projections of Nexon’s financial condition or results of operations or state other forward-looking information.
The forward-looking statements in this presentation are subject to various risks, uncertainties and assumptions about
Nexon’s business and results of operations. The expectations expressed in these forward-looking statements may not
be achieved, and actual results could differ materially from and be worse than expectations. Potential risks and
uncertainties that could cause actual results to differ materially from expectations include, without limitation:
© 2020 NEXON Co., Ltd. All Rights Reserved. 47Disclaimer
• Continued growth and popularity of Nexon’s key titles;
• Nexon’s ability to maintain favorable relationships with key licensing partners;
• Nexon’s continued ability to offer games in China, through local partners or otherwise;
• Nexon’s ability to compete effectively in the online games industry;
• Nexon’s ability to address hacking, viruses, security breaches and other technical challenges;
• Fluctuations in currency exchange rates;
• Nexon’s ability to maintain and further develop its brand name;
• Effective acquisition of new companies, businesses, technologies and games from third parties and the possibility
of recognizing impairment losses;
• Continued growth of the online games market, including the underlying infrastructure, and free-to-play/item-based
revenue generation model;
• Nexon’s ability to adapt to new technologies;
• Nexon’s ability to enter into licensing arrangements for third-party titles on terms favorable to it;
• Effective defense of Nexon’s intellectual property; and
• Legislative, regulatory, accounting and taxation changes in the countries in which Nexon operates.
Nexon does not intend, and disclaims any duty, to update or revise any forward-looking statements contained in this
presentation to reflect new
information, future events or otherwise. We caution you not to place undue reliance on the forward-looking statements
contained in this presentation.
© 2020 NEXON Co., Ltd. All Rights Reserved. 48Q1 2020 Earnings Release Schedule
Q1 2020 financial results are scheduled for release on
Wednesday, May 13th, 2020.
Nexon management is scheduled to host an earnings conference call for investors, analysts and the media on the same day.
Details of the earnings conference call will be available on our IR website about a month prior to the release.
© 2020 NEXON Co., Ltd. All Rights Reserved. 49You can also read
