Nexon, Netmarble post disappointing Q1 earnings

South Korean game giant Nexon announced Wednesday that it posted a decline in revenue, operating profit and net profit in the first quarter, drawing concerns over its performance in overseas markets.

The company’s revenue dipped 11 percent on-year to 904.5 billion won ($738.6 million) while its operating profit and net profit dived 21 percent and 7 percent to 454 billion won and 545.5 billion won, respectively.

Nexon’s performance in South Korea was stellar, posting the best quarterly revenue of 434.4 billion won -- a 78 percent surge on-year -- thanks to the steady sales of MapleStory and Fifa Online 4. But its revenue dropped in foreign markets -- China, Japan, North America and Europe.

In the Chinese market, Nexon’s revenue plunged 42 percent to 366.1 billion won as the COVID-19 outbreak prevented users from visiting internet gaming cafes and playing Dungeon Fighter, Nexon’s most popular game in the country. The decline was more serious in Japan as the revenue nosedived 59 percent to 17.4 billion won. In North America and Europe, its revenue fell 25 percent to 45.9 billion won.

Meanwhile, another major player Netmarble posted a 11.6 percent and 35.9 percent increase in revenue and net profit, respectively, at 532.9 billion won and 57.5 billion won. However, its operating profit decreased 39.8 percent to 20.4 billion won in part of wider spending in marketing fees.

Netmarble launched an aggressive marketing campaign in the first quarter, spending 95 billion won, a 51.3 percent spike on-year, for its newly released game A3: Still Alive and The Seven Deadly Sins: Grand Cross.

It saw just 1 percent drop in revenue in foreign markets at 377.7 billion won. 

In the meantime, NCSoft has enjoyed strong quarterly results, announced earlier on Tuesday. Its total revenue spiked 104 percent to 731.1 billion won and operating profit skyrocketed 204 percent to 241.4 billion won. Its net profit, as a result, surged 162 percent to 195.4 billion won.

NCSoft’s flagship mobile games Lineage M and Lineage 2M brought in 212 billion won and 341.1 billion won, respectively, while PC versions of the two games earned 44.8 billion won and 26.4 billion won each.

The firm raised 634.6 billion won in revenue in Korea, with the domestic market taking up 86.8 percent. It earned 19 billion won, 12.9 billion won and 11.8 billion won in North America and Europe, Japan and Taiwan, respectively.

By Kim Byung-wook (kbw@heraldcorp.com)