Nexon was founded more than 25 years ago on a set of core principles that are highly unique in the games industry. Our business is built on deeply immersive online game worlds, designed to last and grow for a very long time. Our teams have pioneered some of the biggest innovations in our industry, including the first graphic MMORPG1 and the first free-to-play game and continue to do so today.
Every game at Nexon is created to live and evolve for years through our best-in-class live game operations which helps establish and build deep game communities and serve tens of millions of highly engaged players around the world with exciting new content on a consistent basis. For players, this means bigger games with deeper support and services which can be enjoyed on an ongoing basis. For investors, this means delivering games that entertain and delight our players on a regular basis over an extended period of time providing strong cash flow and positive returns.
Nexon has a world-class portfolio of franchises that are as big or bigger than the world’s major movie and game IP2. These franchises, including MapleStory (17 years), Dungeon&Fighter (14 years) and KartRider (15 years), have been played by hundreds of millions of players around the world and generate revenue which is both recurring and growing over time. While these game franchise revenues can fluctuate during their long-life cycle, our extensive experience has shown that franchise revenue can continue to grow over decades, despite near-term fluctuations. This is a key point to understand about our business.
At Nexon we are doubling down on our core strength of development and operations of deeply immersive online games as we think that is where the best opportunity is in the future and where we bring the most to the table.
In 2019, we streamlined our organization and product offerings; and made changes to our strategy to focus on developing fewer, but bigger games that offer long-term profitability and sustained fun for our players. We are centering Nexon’s business around four simple principles:
1. Deep multiplayer games: Concentrate our teams on fewer, but bigger, fully online multiplayer games and virtual worlds.
2. Multiplatform: Enabling our virtual worlds to be played across multiple hardware platforms: PC, console and mobile.
3. Nexon IP2: Leveraging our substantial IP2 portfolio to generate long-lasting games with significant recurring revenue.
4. New IP2 and Tech: As appropriate, placing bets on new IP2 that we think are really special. Our acquisition of Embark Studios, an extraordinary team from both a creative and technology perspective, is an example of this.
Nexon’s development teams are working incredibly hard on the four themes above. In 2020, we will be launching Dungeon&Fighter 2D Mobile, which brings one of the world’s biggest game franchises to the world’s biggest game platform. KartRider: Drift, the next generation KartRider, is being built from the ground-up to be fully online and will launch on consoles and PC as a free-to-play game this year. We will also be talking a lot more about Embark’s new multiplayer co-op action game.
The global games industry has evolved significantly over the last 25 years, driven by successive waves of enabling technology that each drove massive growth. With the introduction of powerful mobile devices and high-speed networks, deep immersive virtual worlds can now be experienced on billions of devices, unlocking Nexon’s Total Addressable Market by a factor of minimally 10x. As innovators in virtual worlds and online games, we are highly focused on seizing this historic opportunity.
Nexon’s business is stronger than ever. Our IP2 is among the very largest in the entire entertainment industry. Our teams are the most experienced in deep online games that can last and grow for years. We are extremely well positioned to take advantage of the trends and advancements in technology in the industry. Our fortress balance sheet provides us with enormous strategic flexibility which we can use to help accelerate our growth.
1 Massively Multiplayer Online Role-Playing Game
2 Intellectual Property
Representative Director, President and Chief Executive Officer