Hello everyone, and welcome to Nexon's Earnings Conference Call. Thank you for joining us today. With me are Junghun Lee, President and CEO of Nexon, and Shiro Uemura, CFO. Today's call will contain forward-looking statements, including statements about our results of operation and financial condition, such as revenues attributable to our key titles, growth prospects, including with respect to the online games industry, our ability to compete effectively, adapt to new technologies, and address new technical challenges, our use of intellectual property, and other statements that are not historical facts. These statements represent our predictions, projections, and expectations about future events, which we believe are reasonable or based on reasonable assumptions. However, numerous risks and uncertainties could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Information on some of these risks and uncertainties can be found in our earnings-related IR documents.
We assume no obligation to update or alter any forward-looking statements. Please note, net income refers to net income attributable to owners of the parent, as stated in Nexon's consolidated financial results. Furthermore, this conference call is intended to provide investors and analysts with financial and operational information about Nexon, not to solicit or recommend any sale or purchase of stock or other securities of Nexon. A recording of this conference call will be available on our investor relations website following this call. Unauthorized recording of this conference call is not permitted. Now, I'll pass the call to Junghun.
Thank you, [colleagues], and good afternoon, everyone. Thank you for joining our call. Today, Nexon posted a letter, slide deck, and press release detailing our Q2 performance and Q3 outlook. I will start by offering context on recent milestones and then hand it off to Uemura-san to provide financial highlights. Nexon delivered a highly positive performance in the second quarter, highlighted by revitalized momentum in established games and solid results from new titles. This includes 60% year-over-year growth in the MapleStory franchise, strong growth in Dungeons & Fighter PC, a solid performance from FC Online, and an impressive contribution from an all-new game, Mabinogi Mobile, which accomplished a remarkable start in March. We achieved better-than-expected Q2 results with revenue of JPY 118.9 billion and operating income of JPY 37.7 billion, 8% and 21% above the high end of our guidance, respectively.
Year-over-year, revenue was down 3% on an as-reported basis and up 6% on a constant currency basis. Operating income was down 70% on an as-reported basis and down 10% on a constant currency basis. Nexon has reignited growth in key titles, created momentum for recent launches, and successfully introduced new services to expand our presence in large global markets. Player enthusiasm for Dungeons & Fighter content updates delivered a solid recovery and 67% year-over-year revenue growth on Dungeons & Fighter PC. In Korea, we set another record for quarterly revenue with MAUs and PUs, which nearly doubled, helping to deliver 132% year-over-year revenue growth. In China, the powerful performance of the Labor Day and Anniversary updates succeeded in returning dormant players, delivering double-digit year-over-year growth and pushing June MAUs and PUs to their highest levels this year.
For Dungeons & Fighter Mobile, we see improved prospects in Q3, driven by a series of updates during the quarter, beginning with the July level cap increase, all expected to drive modest sequential revenue growth. We have also made progress in co-developing new content with Tencent, which is on track for release later this year. One more note, on the Dungeons & Fighter franchise, while we negotiate with the union representing our Neople Studio, we are doing our best to ensure smooth game operation without any disruption. We do not expect an impact on our Q3, and we will keep investors advised if we believe the situation will have a material impact on the game's performance. Moving to MapleStory, the franchise delivered another exceptional performance with revenue growing 60% year-over-year, driven by strong growth in the core PC game in Korea, plus the regional expansion of MapleStory Worlds.
In June, a summer update for MapleStory in Korea contributed 91% year-over-year growth, which included a record 25% market share in PC cafés. Additional content released or planned in Q3 to maintain this strong player engagement. In the West, MapleStory delivered 36% growth. Our strategy for growing the MapleStory IP includes the introduction of additional experiences, which expand the franchise into new regions around the world. Two recent developments reflect that strategy. MapleStory Worlds, a UGC platform offering over 20 years of MapleStory assets, achieved seven times year-over-year growth in Q2, following the rollout in EU and Asia. An all-new game, MapleStory Idle RPG, is expected to further expand the fan base created by our strategic partnership with developer Aver Games. MapleStory Idle RPG is scheduled for a global release later this year.
The MapleStory franchise has become a flagship in Nexon's strategy of driving vertical growth by leveraging the popularity of well-established IP with hyperlocalization, as well as new experiences designed to excite the core and attract new players. In many respects, the franchise is transforming into a platform for multiple experiences that ties to the MapleStory IP. Next, the Mabinogi IP is striking to deliver on its potential to become a sustainable contributor in Nexon's franchise portfolio. In Q2, Mabinogi Mobile exceeded our outlook with strong MAUs, PUs, and ARPPU. In June, we conducted a successful alpha test for Vindictus: Defying Fate, a Mabinogi franchise extension which became the most played demo in the Steam Next Fest. Another game expected to expand Nexon's international footprint is ARC Raiders, a brand new and highly anticipated shooter from Embark Studios.
Scheduled for release on October 30th, ARC Raiders is currently the number six most- wishlisted game on Steam and positioned for global success, particularly in the Western market. Also, an adaptation of The Finals, developed for China in partnership with Tencent, has been granted an ISBN license and is now in a closed alpha test. This week, we announced Uchida Wayfarer, an all-new AAA action adventure set in the Joseon era. The game is developed by Nexon Games for a global audience on PC and consoles. To summarize my remarks today, Nexon has demonstrated the strategy, execution, and experience to overcome setbacks, jump-start growth, and deliver promising new products. Our fundamentals are solid. Our strategy well-defined. Our resilience is proven. Nexon is now positioned for breakaway success. With that, I will turn the call over to Uemura-san.
Thank you, Junghun. The second quarter was highlighted by renewed momentum in established games like Dungeons & Fighter PC and MapleStory, solid performance of FC Online, remarkable results from Mabinogi Mobile, and the successful regional expansion of MapleStory Worlds. Those drove stronger-than-expected revenue and operating income. Affected by negative FX impact, year-over-year revenue and operating income decreased by 3% and 17% at JPY 118.9 billion and JPY 37.7 billion, respectively, while on a constant currency basis, revenue grew 6% and operating income declined 10%. Despite the outperformance in operating income, net income was below expectations at JPY 16.8 billion, due primarily to an FX loss of JPY 17.5 billion on U.S. dollar-denominated cash deposits. Year-over-year, it was down 58% due to the aforementioned FX loss while recording an FX gain of JPY 8.2 billion in the second quarter of 2024.
Turning to the franchise review, the collective revenue on our three major franchises declined 13% year-over-year due to the second quarter 2024 launch of Dungeons & Fighter Mobile. In the second quarter, Dungeons & Fighter franchise revenue declined 40% year-over-year. However, strong player enthusiasm for recent content updates delivered 67% year-over-year revenue growth on Dungeons & Fighter PC. In Korea, we accelerated the momentum that began in the first quarter to set a new record for quarterly revenue. Both MAUs and PUs nearly doubled, resulting in 132% year-over-year revenue growth. In China, second quarter revenue exceeded our expectations and marked strong double-digit year-over-year growth, driven by the solid performance of the Labor Day update. Also, the anniversary update was particularly effective in pushing both June MAUs and PUs to their highest level this year.
For Dungeons & Fighter Mobile in China, second quarter performance was below our expectations due to the May anniversary update being less effective than anticipated at sustaining returning players. Next, our MapleStory franchise delivered 60% year-over-year revenue growth, driven by strong performance of the core PC game in Korea and the regional expansion of MapleStory Worlds in multiple Asian markets. In Korea, the summer update delivered a significant increase in active players. As a result, Q2 revenue grew 91% year-over-year and marked second quarter record. Global MapleStory revenue grew year-over-year, led by the strong 36% growth in Western markets, which delivered a successful 20th anniversary and a collaboration event. In April, MapleStory Worlds launched in multiple Asian markets and was particularly well received by players in Taiwan. As a result, revenue exceeded our expectations and delivered more than seven times year-over-year growth.
Turning to our FC franchise, FC Online exceeded our expectations, driven by a successful seventh anniversary update, which overcame lower seasonality to deliver both year-over-year and quarter-over-quarter revenue growth. For Mabinogi Mobile, the focus on peaceful lifestyle elements, which differentiate the game from traditional combat-focused MMORPGs, resonated well with players. Following the highly successful March launch, the game exceeded our outlook with strong MAUs, PUs, and RPU. Moving on to our third quarter outlook, we anticipate another strong double-digit growth in two of our flagship titles, Dungeons & Fighter PC and MapleStory, along with solid contributions from Mabinogi Mobile and MapleStory Worlds. However, the year-over-year performance will be affected by second quarter 2024 launch of Dungeons & Fighter Mobile in China and Q3 2024 global release of The First Descendant.
Consequently, Q3 revenue is expected to be in the range of JPY 116.6 billion-JPY 127.1 billion, representing a 14%-6% decrease on an as-reported basis, or 12%-4% decrease on a constant currency basis year-over-year. We expect the Dungeons & Fighter franchise to decline by approximately 45% year-over-year. For Dungeons & Fighter PC, we anticipate continued strong year-over-year growth both in Korea and China, while anticipating a sequential decline in revenue. For Dungeons & Fighter Mobile, we expect modest sequential revenue growth, driven by a series of updates during the quarter, beginning with the July level cap increase. Moving to MapleStory, we expect the franchise to accelerate revenue growth to approximately 70% year-over-year.
For the PC version of MapleStory in Korea, we anticipate revenue to more than double year-over-year, driven by the additional content releases to maintain the strong momentum generated by the summer update. We also expect MapleStory Worlds to significantly increase its revenue year-over-year again in Q3. Revenues from the FC franchise are expected to be roughly flat year-over-year and quarter-over-quarter. We expect to maintain player engagement with our TOTS Team of the Season update and marketing initiative of the Legendary Players exhibition match planned for September. Overall, we expect revenues from the three largest franchises in Q3 to decrease by approximately 10% year-over-year. Finally, for Mabinogi Mobile, we expect some sequential moderation, but a significant contribution in Q3.
Moving on to the operating income outlook, we expect Q3 operating income to be in the range of JPY 32.7 billion-JPY 41.2 billion, representing a 36%-20% decrease on an as-reported basis, or 35%-18% decrease on a constant currency basis year-over-year. We anticipate increased royalty expenses and platform fees due to Mabinogi Mobile. Also, we expect increased marketing expenses associated with the promotions for FC and MapleStory franchises, as well as Mabinogi Mobile and ARC Raiders. In addition, we expect increased fees to creators tied to revenue growth in MapleStory Worlds. On the other hand, we expect a decrease in HR costs due to lower performance-based bonuses. Additionally, we expect a gain of JPY 4 billion associated with the liquidation of our subsidiary fund.
Despite the year-over-year operating income decrease, we anticipate net income to be in the range of JPY 26.4 billion-JPY 32.8 billion, representing a 2% decrease- 21% increase on an as-reported basis, or flat to 24% increase on a constant currency base year-over-year. This is due to the comparison against the JPY 19.6 billion FX loss in Q3 2024. Finally, I will provide an update on our shareholder return initiative. Under the one-year JPY 100 billion buyback policy announced in February, we repurchased a total of JPY 50 billion shares by June 25th. Also, today, Nexon's board of directors approved the execution of the repurchase for the JPY 25 billion worth of shares scheduled from August 14th to October 31st.
We plan to complete the repurchases of the remaining JPY 25 billion worth of shares by February 2026 at the latest, with consideration of factors including investment opportunities, financial conditions, and the market environment. We remain committed to actively returning capital to our shareholders while enhancing capital efficiency. With that, I will return the call back to Junghun.
Thank you, Uemura-san. In summary, Nexon has reignited growth in our key titles and successfully introduced new games and services to expand our presence in large global markets. Looking forward, we are on a path to broaden our international footprint with new releases that include the October 30th launch of ARC Raiders and later with The Finals for release in China. This concludes our summary. Operator, we are ready to take questions.
If you wish to ask a question, please press the raise hand button on the screen.
When the hand icon is displayed on your screen, that means you have raised your hand. When it comes to your turn, you will receive an unmute notification on your screen. Please unmute yourself and proceed with your question. This earnings presentation is conducted with consecutive interpretation between Japanese, English, and Korean. Even if the translation for your selected language has finished, the translation on the other language channel may be continuing. Please wait until the permission is displayed on the screen when you ask a question. We will begin taking your questions shortly. Please hold on for a moment. 最初のご質問者は大和証券のトーマス・クオン様です。それではご質問者様、ご質問をお願いします。 '
I would like to take the first question from Thomas Kwon from Daiwa . Please go ahead.
Good afternoon and congrats on the strong quarter. Thank you for taking my questions. I have two.
First is, among your upcoming game title, which is the new game building up the management expectation for this successful launch, geographically which is the market and the commercial is the Wii GAME JOURNAL? I have the second question.
一問目ですけれども、2025年下期の事業見通しについてお伺いしたいです。特に下半期から2026年前期にかけて投入予定の新作ゲームタイトルに関して、経営陣、社長の期待について教えてください。収益面、利益面で特に期待が高まっているタイトルはどれでしょうか。 네, 감사합니다. 이정헌입니다. 제가 답변드리도록 하겠습니다.
Hello, this is Junghun Lee. Thank you for your question. I'll be able to answer that.
네, 우선 저희는 메이플스토리 국내 서비스와 PC 던전 앤 파이터의 전반적인 호조세는 계속해서 이어갈 수 있도록 가장 우선순위를 높게 두고 있습니다.
First of all, I would like to begin by saying that we are putting our utmost priority in sustaining the solid performances in Korea MapleStory and PC Dungeon & Fighter.
그리고 모바일 던전 앤 파이터 중국 서비스는 텐센트와의 공동 개발 콘텐츠가 연내에 도입되면서 중장기적으로 더 나은 성과를 낼 수 있을 것이라고 확신하고 있습니다.
Also, for mobile Dungeon & Fighter China, we are confident that the game will benefit with a better mid to long-term performance as the co-developed content with Tencent is to be introduced later this year.
자, 그럼 신작으로 넘어가서 새로운 신작의 모멘텀 중에서는 ARC Raiders의 런칭이 당면한 가장 큰 모멘텀이라고 보고 있습니다.
Moving on to our pipeline, we believe the biggest upcoming momentum would be the launch of ARC Raiders.
네, 10월 30일에 출시하는 ARC Raiders는 현재 스팀 위시리스트 6위에 오를 만큼 매우 큰 기대감을 가지고 있습니다.
ARC Raiders, which is slated to launch on October 30th, is continuing to gain strong traction and is currently ranked number six on Steam's top wish list worldwide ahead of its launch.
네, $40로 출시되는 가격대는 하드코어한 성향이 강하거나 고가인 기존 프랜차이즈들로 포화된 시장에서 이용자들에게 충분히 매력적으로 다가갈 것입니다.
We believe the currently set $40 price point for ARC Raiders will be received pretty well by players, especially within this market that's saturated with older and more expensive and more hardcore franchises.
네, 저희는 ARC Raiders에 대해서 검증된 라이브 운영 역량과 꾸준한 DLC 제공을 통해서 게임의 재미와 생명력을 지속적으로 이어갈 것입니다.
We plan to sustain the game, the fun, and the longevity of the game with our proven capability in live operations, as well as a steady stream of DLCs going forward.
여기에 더해서 MapleStory Idle RPG도 연내에 글로벌에 출시를 예정하고 있습니다.
Adding on to that, we also have MapleStory Idle RPG, which is planning for its launch later this year globally.
네, 캐주얼한 게임성으로 좀 더 폭넓은 글로벌의 팬층에게 글로벌 팬층의 확대에 기여할 것으로 예상하고 있습니다.
With its casual and more lighthearted gameplay, we believe this title will contribute to expanding our fan base in a more broader spectrum.
이어서 내년에 대한 전망을 말씀드리도록 하겠습니다.
I also would like to briefly touch upon our prospect for the first half of next year.
현재 클로즈드 알파 테스트를 진행하고 있는 더 파이널스의 중국 서비스의 테스트 추이도 매우 긍정적으로 보고 있습니다.
For the China service of The Finals, currently we are conducting closed alpha tests, and we are seeing some highly positive trends from this testing.
참고로 현재 라이브 서비스 중인 더 파이널스는 개발팀의 지속적인 노력과 넥슨 라이브 운영팀의 지원 덕에 전년 대비 성장 추세로 돌아섰습니다.
Now, for your reference, The Finals, which is currently on its live service, was benefited from continued efforts of the development team and Nexon's live operations and returned to a year-over-year growth trajectory.
Lastly, for next year, I would like to touch upon Mabinogi Mobile, which is performing very well in South Korea. We are planning to bring the game to the global market next year.
Mabinogi Mobile is, as an MMORPG.
It is quite rare in terms of its interesting user demographics composition, which is split roughly in half by gender, that being around 54% male and 46% female, and the retention still remains very strong. We believe Mabinogi Mobile's gameplay holds much potential in attracting a wide spectrum of global users.
이렇게 저희는 라이브 서비스에 있어서 안정적인 추세를 유지를 하고, 앞서 말씀드렸던 몇 가지 신작에 대한 모멘텀, 그리고 한국에서 런칭한 게임의 글로벌 런칭을 통해서 내년에도 안정적인 성장을 이어갈 수 있도록 최선을 다하겠습니다.
So to summarize, Nexon will continue to make steady efforts to sustain our growth next year with some of the initiatives that I just mentioned, maintaining the stable trend in our live service, bringing on or executing on the momentum with new titles, as well as bringing our games that are beloved in South Korea to the global market.
네, 이상입니다.
That concludes my answer. Thank you.
Okay, thank you. Thank you for the detailed comment. My second question is about the operating cost and marginal loop for second half this year and 2026.
I s it fair to expect any visible increase in the SG&A cost, especially the labor cost, mainly due to increasing pressure by both the game developers for more bonus payments and labor union for the better working environment? We have to expect the sharp increase in the operating cost for staff and others as the operating expense. Thank you.
はい、詳細に渡る回答ありがとうございました。次の質問なんですけれども、25年の下半期および26年にかけてのコストに関連して質問させてください。半官費の見通しについてなんですけれども、韓国で特に労働組合が賃金だとかインセンティブについて強い主張を行っているような動きがありましたけれども、韓国も含めて25年下半期以降に人件費全体が上昇していくというような可能性はありますでしょうか。
일단 제가 먼저 답변을 드리고, 첨언할 부분에 대해서는 우에무라상에 이어서 답변드리도록 하겠습니다.
Thank you for your question. I will be able to provide my answer first, and then Uemura-san will be able to add on to it later.
넥슨은 인재 유치와 유지를 위해서 이미 경쟁력 있는 보상 체계를 갖추고 운영을 하고 있었습니다.
For Nexon, we already have a competitive compensation system and structure in place to attract and retain great talents from the market.
이 정책하에서 벗어난 급작스러운 전체 임금비의 인상의 가능성은 없을 것입니다.
Going forward, there will be no abrupt increase in the total HR cost that sits outside of this policy.
참고로 저희는 파업으로 인한 게임의 운영이 중단 없이 원활하게 진행되도록 최선을 다하고 있습니다.
For your reference, we are doing our best to ensure smooth game operation without any disruption.
덧붙여, 3분기에 대한 전망에 영향이 있지는 않을 것입니다.
In addition, we do not expect an impact on our third quarter.
はい、若干補足をいたします。半官費における人件費の見立てに関してなんですけれども、我々2027年に向けてしっかりと成長させるための投資をしっかりやっていくということをお伝えしていると思います。そこに関しましてはしっかり計画をそれほど遅れることなく採用は進んでおりまして、人材、必要な人材の確保というのは今のところ順調に行っていっているという状況です.
So a little additional information from myself and the CFO regarding the SGA, the labor estimation, w e are trying to achieve this 2027 goals, and then we have been communicating that for that we will be doing this investment for growth. Recruiting-wise, more or less, we are on track, and we are expanding our team to hit this 2027 goal.
一方、人件費が下がっているように見える理由としましては、これはインセンティブボーナスの減少が大きいということになります。したがって、必要な人員の確保をしつつ、インセンティブボーナスの減少により人件費が少し下がって見えているというような状況になっております.
The total labor is looking smaller, coming down a little bit because of this incentive; the bonuses were smaller.
We are actually recruiting, and we are expanding our capabilities.
まして、しっかりと人材の投資を行いつつ成長に向けて準備をしているというような状況で順調に進んでいるということになります。
We are on track. We are investing in human resources, and we are prepping ourselves to achieve this necessary growth.
次のご質問者はゴールドマンサックス証券、宗像様です。それではご質問者様、ご質問をお願いします。
Munakata-san from Goldman Sachs, please take the stage.
ご指名ありがとうございます。ゴールドマンサックス証券の宗像です。2問ありまして、1問ずつお願いいたします。まず1問目ですけれども、アラド戦機のPCについて質問させてください。韓国と中国それぞれ力強いですけれども、好調の背景はそれぞれの地域で異なるというふうに理解したほうがよろしいんでしょうか。また3クォーターでは韓国、中国それぞれですね、QonQで前四半期比で減収を見込まれているとのことですが、その理由についても教えていただければと思います。直近のユーザーエンゲージメントに落ち着きが見られているのでしょうか。これが1点目です。
I have two questions. The first question is about the Dungeon & Fighter PC. In Korea and China, sales are strong in each region, but what is the reason for the strong performance in each region? Also, please explain why you expect QonQ sales of Dungeon & Fighter PC in Korea and China to decline in Q3. Has there been a recent slowdown in user engagement?
안녕하세요, 이정헌입니다. 제가 답변드리도록 하겠습니다.
Hello, this is Junghun Lee again. Let me answer your question here.
네, PC 던전 앤 파이터는 올 상반기에 게임 재활성화를 위해서 콘텐츠 제공량을 대폭 확대했었습니다.
For PC Dungeon & Fighter, we have significantly expanded its content supply in the first half of this year, that aiming to reignite the game's momentum.
그 결과 1분기부터 뚜렷한 성장세를 보이면서 성공적인 턴어라운드를 이뤄냈습니다.
Thanks to this effort, this game achieved a successful turnaround with clear growth in the first quarter.
특히 작년 중국 시장에서 부진했던 성과를 만회하기 위해서 콘텐츠 볼륨을 늘린 전략이 효과를 발휘했다고 볼 수 있습니다.
In particular, we believe that the strategy of increasing content volume supply to make up for our last year's struggle in the Chinese market was effective with this.
정리해서 결론만 답변을 드리자면, 최근 이용자의 참여도가 둔화된 부분은 없으며, 워낙에 공격적인 1분기와 2분기의 업데이트가 있었으므로 상대적으로 3분기가 약해 보이는 것이지, 성장세는 지속적이고 안정적으로 유지될 것으로 보입니다.
Now, to give a gist of my answer, there has been no recent slowdown in user engagement.
Basically, the third quarter might appear relatively moderate due to the very aggressive updates we had in Q1 and Q2, but basically the growth itself is expected to remain steady and stable.
네, 이상입니다.
That will be it for my answer. Thank you.
ありがとうございます。2つ目の質問ですけれども、韓国市場での好調が目立ちますが、今後の韓国市場のアップサイドをどう考えていらっしゃいますでしょうか。韓国のゲーム市場のサイズや、すでに御社のシェアが高いこと、競争環境を考えますと、さらなるアップサイドは他の地域と比べて低いと考えるべきでしょうか。また、この下期から来期にかけての地域別の売上構成という観点では、ARC Raidersのローンチも控えていることから、欧米地域の伸びを見られているのか、中国がリカバリーするのか、もう一段韓国が伸びるのか、どのような変化を想定されていらっしゃいますでしょうか。よろしくお願いいたします。
Thank you for your answer to the first question. My second question, you are doing well in the Korean market, but what do you see as the upside going forward, considering the size of the Korean gaming market? You already have high market share and the competitive environment. Do you think a further upside is less likely than in other regions?
Also, in terms of the sales composition by region from the second half of this fiscal year to the next fiscal year, with the launch of ARC Raiders coming up, do you expect a growth in the U.S. and Europe, recovery in China, or further growth in Korea?
네, 일단 한국 시장에서의 추가적인 성장 가능성은 충분히 크고 여력이 있다고 보고 있습니다.
Sure, so I would like to begin by saying that we believe that there is significant potential for further growth upside within South Korea.
아시다시피 한국은 전 세계에서도 손꼽히는 시장 규모를 가지고 있는 나라입니다.
As you know, Korea is definitely one of the world's largest markets in its volume.
넥슨은 메이플스토리, 던전 앤 파이터, 그리고 FC 등으로 이미 한국의 PC 플랫폼에서는 다양한 포트폴리오로 인한 시장 지배적인 위치에 있습니다.
So basically with MapleStory, Dungeon & Fighter, and FC, Nexon already holds a quite dominant position in the PC platform market with our diverse portfolio.
하지만 한국의 모바일 시장에 있어서는 아직 충분히 성장할 여력이 있다고 보고 있습니다.
Still, we do believe that there is significant room for growth in the mobile market that we can tap into going forward in South Korea.
넥슨은 기존 PC 포트폴리오의 견조하고 안정적인 성장을 유지해 나가면서 모바일 시장에서의 점유율 확대를 위해서 노력해서 한국 시장에서의 추가적인 성장을 도모할 것입니다.
So Nexon will continue to maintain our steady and stable growth of our existing PC portfolio, but at the same time, we'll also strive to expand our market share on mobile, thereby seeking additional growth upside in this country.
참고로 내년에는 저희가 한국에서만 서비스하고 있는 FC 온라인이라는 큰 프랜차이즈에 있어서 월드컵이라는 굉장히 큰 시즌 이슈가 있습니다. 이로 인해서 한국에서도 추가적인 성장이 있을 것으로 전망을 하고 있습니다.
For your reference, next year we have World Cup, which is a significant seasonality factor for FC Online, one of our largest franchises that we service, and this is being serviced only in Korea. We also do expect some additional growth upside from this.
2026년에도 한국 시장은 굳건할 것이며, 나아가서 넥슨 전체 관점에서 글로벌 시장에서의 공격적인 성장을 도모하는 동안 안정적인 수익을 지속적으로 창출해 주는 기반 시장이 될 것입니다.
In 2026, the Korean market will remain strong, and going beyond that, from the entire company's perspective, the market will serve as a stable foundation which provides consistent returns while we pursue aggressive growth in international markets.
네, 이렇듯 한국 시장에 대해서는 굳건한 위치에 있을 것이라고 답변을 드리고, 좀 더 성장 여력이 있다라고 답변을 드리고요. 이어서, 이어서 ARC Raiders의 런칭을 감안하면 당연히 미국과 유럽 시장에서도 잘해야 되겠죠.
그리고 현재 Dungeon & Fighter 프랜차이즈가 잘 유지되는 것, 그리고 The Finals나 기타 중국에서 런칭하는 타이틀을 통해서 중국 시장에서의 회복에도 최선의 노력을 다하도록 하겠습니다.
All in all for South Korea, we do believe we are maintaining quite a solid position, and there will be some further growth upside that we can tap into. Going beyond this region, of course, with our ARC Raiders launch coming up, we will also need to perform well in the Western region, including the EU and North America. Also for Dungeon & Fighter franchise, by maintaining its positive trends as well as launching some good performance with The Finals and other China services that we are preparing, we will do our best to deliver some favorable trend in China as well.
네, 이상입니다.
That concludes my answer. Thank you.
よくわかりました。ありがとうございます。次のご質問者はUBS証券のイー・ジャー・ジャイ様です。それではご質問者様、ご質問をお願いします。
Next question from Ie-Ja Jae-san from UBS Securities. Please take the floor.
UBS証券のイー・ジャーでございます。えっと、質問2点ありまして、えっと、まず1点目、あのザ・ファーストディセンダントについて伺いたいですけれども、あの決算資料ではシーズン3のアップデートがあのかなり成功して売上収益がQonQで3倍になるというような書き方があったんですけれども、あのまずあのま2Q時点の売上規模感とあのリリース当時の規模感について、あのま今はどういう風に見えているのかについてイメージを教えていただきたいのと、あと今回あのシーズン3のアップデートの成功の理由と、あとこれからあの持続性についてあのどういう風に考えるべきかについて教えていただけますでしょうか。
Hi, I have two questions. First is about The First Descendant. I read in the document that a Season 3 update can expect, you know, to bring in significant, you know, revenue growth. It can be as much as, you know, three times, three times, you know, quarter- on- quarter. And I'd like to first understand, you know, how the, you know, the scale volume was, you know, upon the release in the second quarter, and also why, you know, the Season 3 update, you know, is considered to be a very strong contribution. And also, I'd like to understand, you know, how we should think about this, you know, sustainability of this, you know, the boost.
네, 제가 답변드리도록 하겠습니다.
Thank you for your question. I'll be able to answer to it.
네, 말씀 주신 것처럼 더 퍼스트 디센던트는 얼마 전에 실적 발표 얼마 전에 시즌 3 업데이트를 진행했습니다.
So as mentioned a little bit before our earnings release, The First Descendant did release our third season of the game.
이번 3분기 업데이트는 좀 굉장히 많은 양의 콘텐츠가 제공이 됐습니다. 신규 플레이어를 위한 전용 지원과 함께 보다 확장된 필드, 8인 레이드 등 굉장히 좀 많은 콘텐츠들을 저희가 준비해서 업데이트를 진행을 했는데요.
So for this season 3, we were able to supply a large amount of content, including dedicated support for our new players, as well as larger fields and eight player raids, and etc. The content update was pretty big.
따라서 3분기에는 전분기 대비해서 매출의 성장을 기대를 하고 있습니다.
So this is why we do expect sequential growth in revenue in Q3.
아직 업데이트 직후라 저희는 현재의 추이를 매우 면밀히 살피고 있으며, 더 퍼스트 디센던트가 다시 성장할 수 있도록 현재도 라이브 팀과 관련된 운영 인력들은 최선을 다하고 있습니다. 앞으로 남은 기간 동안 지속적으로 안정적이고 성장하는 서비스 만들 수 있도록 최선을 다하겠습니다.
Currently we are immediately after the release of the update, so the whole team is monitoring, closely monitoring the overall trend post its release. For The First Descendant, our live service team as well as operations teams, everyone there are making our utmost effort to reignite the growth of the title, and going forward we will continue to make our best effort in making stable and growing live service of the game.
네, 이상입니다.
That will be all from my end. Thank you.
はい、えっとありがとうございます。えっとそうですね、じゃあ2点目についてですけれども、あの中国のそのアラド戦機のモバイル版についてですけれども、あの次の市販期モバイル、あ、その2級についてはあのレベルキャップの解放が、あ、すいません、3級ですね。えっとレベルキャップがの解放があったにも関わらず、ま、ちょっとその予測としてはQonQの増収はちょっとあのわずかなものにとまるっていう風にあの想定されているんですけれども、ま、こちらの背景は何でしょうかっていうのがあの質問でして、で、そしてあのまちょっとあのテンセントとあの共同開発のコンテンツは今年中にあのリリースされる予定ですけれども、ま、そういうあの共同開発のコンテンツによって売上の成長のイメージはま、どのようなタイミングでどのような規模感でえっとま今後成長していくっていう風に想定しているんでしょうか。
Next question is China, Dungeon & Fighter's Mobile.
You talked about that there's a third quarter level cap and release, which has happened already, but you are only estimating the QonQ increase to be only slightly the sequential increase and why it's so limited. Regarding the Tencent core development, core developed the content, you know, I believe it's going to be coming before the end of this year. How are you foreseeing the revenue growth, you know, coming with it, you know, what time, how much scaling can we actually expect to be coming from that effort?
네, 우선 2분기에 있었던 주년 업데이트부터 살펴볼 필요가 있는데요. 주년 업데이트는 초기에는 휴면 유저 유치에 효과적이었지만 그 성공을 지속하지는 못했습니다.
Now I would like to begin my answer by referencing to the anniversary update that took place in our second quarter. Basically the update initially did attract some dormant players, but it was unable to sustain this success.
However, as you have mentioned, we did release the July level cap increase, and starting with that, we see improved prospects in third quarter, mainly driven by a series of updates, including the level cap increase. We do expect some modest sequential revenue growth thanks to all of those updates. I would like to add a little bit on to my comments, touching on the mid to long-term approach that we are taking, which is as important as the updates for our company.
One point that I am watching very closely, as you know, is the introduction of co-developed content with Tencent within this year.
The factor and the element that I am putting high importance right now is, as you know, our co-developed content with Tencent that will be coming to the game later this year.
이에 대해서 중요한 포인트로 봐주셨으면 하는 게 있어서 한 번 더 강조를 드리도록 하겠습니다.
I just wanted to highlight this one fact, which I believe is a highly important piece to it.
텐센트와의 협력은 특정 업데이트로 인한 단기적인 매출과 트래픽의 성장이 아닌 장기적인 성장이 가능한 구조로 개발 프로세스 자체를 변경하는 것을 의도로 하고 있는 것이 가장 중요한 포인트입니다.
The essence and the key to our collaboration with Tencent is that it is intended to change the development process to enable long-term growth rather than focus on short-term growth in revenue and traffic.
단 한 번의 업데이트만으로 즉각적이고 극적인 턴어라운드를 기대하지 않지만 하이퍼 로컬라이제이션과 새로운 경험을 통한 더 강력한 현지화를 위한 텐센트와의 이니셔티브가 시간이 지남에 따라서 핵심 지표와 성과들을 점진적으로 개선할 것으로 생각하고 있습니다.
We do not anticipate an immediate and dramatic turnaround with just one single update. However, we do believe that our initiative with Tencent for greater adaptation with hyper localization as well as new experiences will gradually generate improved core metrics and performance over time at the end of the day.
올 하반기부터 내년까지 던전앤파이터 모바일이 어떻게 지표들을 개선해 나가고 서비스해 나가는지 좀 장기적인 관점에서 지켜봐 주시면 감사하겠습니다.
We would appreciate your interest and support. The longer term and long-term perspective up to the second half of this year to next year is in terms of how the Dungeon & Fighter Mobile achieves this improvement both in key metrics as well as the service.
네, 이상입니다.
That concludes my answer. Thank you.
詳細のご説明ありがとうございます。ちょっと1点フォローアップですけれども、下半期以降より中長期的な回復とはなるんですけれども、その際は私たちが注目すべきKPIがもし何かありましたら教えていただけますでしょうか。
Thank you very much for your answer. I have a slight little follow-up question. I hear that long-term recovery can be expected from the second half onwards. What are the KPIs that we should actually be finding to be signaling that recovery to be kicking in?
はい、今回の決算でお伝えしているように主力の3つのタイトル、これに関してはかなり角度の高い復調をしっかりしているという風に考えております。したがってここを引き続きいいモメンタムを維持しながら少しずつ成長させていくというのがまず第1であります。
First of all, as you know, our report covered this time the core three titles, all of them are showing very solid recovery with great confidence that we can have, and we are to continue this momentum with all the titles.
でその小さなチャレンジは当然ありますけれども、アラド戦機モバイル、中国におけるアラド戦機モバイルですね。ここを先ほどからジョンホンがお伝えしているように、ある程度時間をかけてしっかりと再度の成長を目指していけるような形にしたいというのが1つ。でもう1つは大きなパイプラインの中で大きな期待値の高いものが今後今年の後半から来年にかけて出てきますので、そこにかけた準備、開発準備を含めた様々な準備をしっかりと行っていって、成功裏にローンチし、そのいいローンチをしてきたらその後の持続性をしっかり確保するというようなとこが非常に重要な観点かという風に考えています。
I know that there are two critical things. First will be Dungeon & Fighter in China. As you know, the CEO has been saying that it's going to be a long-term initiative, but we need to actually bring it to regrowth, the trajectory.
The second will be about the very promising pipeline titles, which will be coming from the second half. First we need to do this utmost preparation, including the R&D, to make the launch as successful as possible and also to retain the momentum that we create upon the launch and have this sustainability. す
いません、ジャイさんのご質問で確認なんですけど、アラド戦機モバイルのKPIで注目すべき点ということだったでしょうか。
Let me just clarify the question. Did you want to find out what would be the KPI that you should be watching out for the Dungeon & Fighter Mobile?
はい、そうです。おっしゃる通りです。 失礼しました。私全体のお話をしてしまいました。じゃあアラド戦機モバイルの件でということなんですけれども、やはり一番重要なのは離脱したユーザーを戻すということが一番重要です。ですのでMAUというようなユーザー数の増加というところが一番重要なKPIだという風に考えます。
Apologies. I'd like to actually talk specifically about Dungeon & Fighter Mobile. Earlier my answers was about overall. Regarding the Dungeon & Fighter Mobile, the most critical would be to bring back the dormant players. The increase in MAU is going to be the very critical component of success.
でユーザーをしっかりと戻した後によりゲーム内を活性化させてしっかりと楽しんでいただくことによって売上も回復できるという風に考えております。
So first aim is to bring back the users to the platform and make sure that the whole platform is revitalized with the rich content. Hence we will benefit from this increased revenue. Thank you for your question.
よく理解できました。ありがとうございます。
Thank you. Understood well.
次のご質問者はモルガンスタンレー証券のセヨンパク様です。それではご質問者様、ご質問をお願いします。
Next, De Seon Parkson from Morgan Stanley, please.
Hi, can you hear me?
Yes, please go ahead.
Thank you. I have one question. I think most of the questions I had was already answered. It's relating to the MapleStory Worlds, which is a relatively new franchise. I think you mentioned that it's gotten quite positive reception in Taiwan. I'm kind of curious how different this game is to the original MapleStory, why it's gotten to be so popular in Taiwan. Is the MapleStory franchise already well recognized in Taiwan?
And then just whether the whole concept and the gameplay, whether it's different and how sustainable do you think this is? Thank you very much.
ありがとうございます。すでにあった質問、だいぶ答えられたので1問だけお願いします。ということでメイプルストーリーワールドについてなんですけども、こちら比較的新しいフランチャイズということで、そして報告の中で台湾で非常に好評を博しているという話がありました。まずこのメイプルストーリーワールドというのは元々のメイプルストーリーとどう違うのか、そして台湾で人気が出たということですけども、それはどういった理由に由来するのかと、もうすでに台湾でメイプルストーリーというフランチャイズが知られているからということなんでしょうか。なのでコンセプトですとかゲームプレイだとか、どうこれまでのメイプルワールドと違うのかというところをご説明いただければありがたいです。 네, 세원님 감사합니다. 메이플스토리 월드는 당초 예상치를 크게 초과해서 전년 동기 대비 7배 이상의 성장을 달성했습니다.
Thank you for the question. I would like to begin by saying that MapleStory Worlds has significantly exceeded our expectations, achieving over seven times year-over-year growth.
네, 말씀 주신 것처럼 매출 측면에서만 봤었을 때 메이플스토리 월드는 대만 지역이 가장 큰 성공을 거두고 있고요.
As you have just mentioned, in terms of revenue, MapleStory Worlds is seeing the biggest success in Taiwan.
성공 요인 중에 성공 요인은 한국에서 이미 큰 호응을 얻었었던 아르테일 월드라는 게임이 있습니다. 이 아르테일 월드가 큰 인기를 누리고 있습니다.
If I were to maybe seek for the key driver behind this performance, it would be a world called Artale.
Basically, it is a world that has already gained quite a great popularity in Korea, and it is well received in Taiwan.
이 아르테일 월드는 현재 한국 서비스 기준으로도 계속 지속적으로 잘 되고 있는데요. 현재 라이브 서비스 중인 PC 메이플스토리에 특정 업데이트 시점 전을 플레이할 수 있는 빌드라고 보시면 될 것 같습니다. 그냥 쉽게 말씀드리면 클래식 버전이라고 보시면 될 것 같아요.
Basically, Artale is still performing quite positively in South Korea as well, and it is about offering an experience before a certain update that was done in the live service of the main PC game. Basically, it can be seen as a classic version of MapleStory.
이 메이플스토리 PC 서비스는 현재 대만에서도 압도적인 1등을 자랑할 정도로 국민적으로 다 아는 IP이고 사람들이 다 좋아하는 게임이고 현재도 되게 잘 되고 있습니다. 이런 인지도와 팬베이스의 배경이 아르테일도 잘 되는 배경의 요인으로 보고 있습니다.
In Taiwan, MapleStory PC service is definitely a predominant experience that everyone within the country loves. It is definitely receiving nationwide love from the country, and it is still maintaining its great performance. We believe such reputation as well as enormous fanbase within the region has backed our performance and success that we were able to see with Artale.
지속성적인 측면에서의 제 전망을 말씀드리는 것으로 답변을 Artale is already a service that started in South Korea first, and it is still being serviced well up to now, so there is a lot of accumulated content. We expect that a stable service will continue in Taiwan through the end of the year.
I would like to conclude my answer by offering my personal view in terms of the stability of the experience. Artale has already started its service a while ago in South Korea first, which means that it has some accumulated content.
So up to now, with this accumulated content, I believe that it will be able to sustain its success in Taiwan throughout this year.
그리고 잘 아시겠지만 메이플스토리 월드는 UGC 플랫폼이잖아요. 그래서 아르테일과 같은 킬러 콘텐츠로 모인 트래픽들이 그 플랫폼 안에서 선순환이 되면서 전체 플랫폼 자체가 성장하는 그림이 될 수 있도록 저희는 앞으로도 최선을 다하고 지원할 수 있도록 하겠습니다.
And as you know, MapleStory Worlds is basically a UGC platform. With killer contents like Artale, we will be able to gather some meaningful amount of traffic, and by helping those traffic creators virtuous cycle within this platform, we will be able to drive the overall growth of this entire platform itself. To achieve this and render great results, we will make sure we do our best going forward.
네, 이상입니다.
That would be it from my end. Thank you.
Thank you very much.
Ladies and gentlemen, once again, if you wish to ask a question, please press the raise hand button on the screen. When the hand icon is displayed on your screen, that means you have raised your hand. Also, please wait until the permission is displayed on the screen when you ask a question. This concludes the question-and-answer session. Mr. Kawai, I'd like to hand over to you for any additional or closing remarks.
Thank you. If there are no further questions, I would like to take this opportunity to thank you for your participation in this call. Please feel free to contact the Nexon Investor Relations at investors@nexon.co.jp should you have any further questions. We appreciate your interest in Nexon and look forward to meeting with you, whether it is here in Tokyo or in your corner of the world.