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

Strongest Third Quarter Revenue, Operating Income and Net Income in
Nexon’s History

Acquisition of Pixelberry Studios Bolsters Western Mobile Game
Development and Expands Audience; Partnership with Electronic Arts
Extended to Publish FIFA Online 4 in Korea

TOKYO–(BUSINESS WIRE)–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.
                   

Contacts

For Nexon Corporate PR
CorporatePR.Team@nexon.co.jp
or
fortyseven
communication on behalf of Nexon
Sibel Sunar, 212-391-4707
sibel@fortyseven.com