Good day everyone, welcome to NEXON's 2020 fourth quarter earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Maiko Ara, Head of Investor Relations and Corporate Public Relations. Please go ahead, ma'am.
Hello everyone, welcome. Thank you for joining us today. With me are Owen Mahoney, President and Chief Executive Officer of NEXON, and Shiro Uemura, Chief Financial Officer. 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 online game 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.
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 investor relations documents. We assume no obligation to update or alter any forward-looking statement. Please note, net income refers to net income attributable to owner of the parents, as stated in NEXON's consolidated financial results. 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, www.ir.nexon.co.jp/en/followingthiscall. Unauthorized recording of this conference call is not permitted. I'd now like to turn the call over to Owen.
Thank you, Maiko Ara, welcome everyone to NEXON's fourth quarter and year-end 2020 conference call. Today, I'm going to offer brief remarks on NEXON's performance for both the fourth quarter and full year 2020, both of which were very good. I will also offer some perspective on key trends and metrics that drive growth opportunities in our industry and our company. Following that, our Chief Financial Officer, Shiro Uemura, will provide detailed breakout on both the quarter and the fiscal year. Starting with our recent performance, NEXON's fourth quarter marked a strong finish to a good year. We beat our forecast and posted our highest ever Q4 revenue, up 35% year-over-year. This record-setting performance is attributable to great execution and careful management of our virtual worlds, global blockbusters that showed continued growth years after launch.
We are also extremely pleased with our full-year results for fiscal year 2020, the highest revenue year in NEXON's 26-year history. In addition to the top-line growth, we saw clear progress on our focus strategy for doing fewer things bigger and better. As a result, NEXON Group revenues grew by 18% year-over-year. A particular high point of the year, and one that demonstrates our virtual world strategy, is the performance of MapleStory in Korea, which posted revenue growth of 98% year-over-year in 2020. 98% growth in its 17th year in the market. Our performance in 2020 also reflects on the overall success of our strategy for moving blockbuster franchises onto mobile. Mobile revenue grew by 60% year-over-year and now represents 1/3 of NEXON's total annual revenue, and we expect this percentage to continue to grow in the years ahead.
With the close of a record-setting year, I'd like to pause and offer some thoughts on how our strategy aligns with trends in technology and entertainment in order to provide catalysts for long-term growth. In recent calls, we've highlighted the global secular shift in entertainment from live, physical-based entertainment to online entertainment, and from linear to interactive. We've said that we think this shift is both profound and underreported. On top of this fundamental shift is the far-reaching impact that rapidly improving mobile technology will have on the business of online virtual worlds. Breakthroughs in mobile tech are leading billions of new consumers to NEXON's core business. In the past, virtual worlds were restricted to a limited audience of players with game-playable PCs. Now everyone can have a virtual world on their phone, in their pocket.
While the potential for billions of new mobile players will have an obvious positive impact on our total addressable market, the larger and more enduring opportunity comes from NEXON's unique ability to sustain and grow virtual worlds for decades. On smartphones, a platform where games and companies frequently disappear in weeks, NEXON brings a highly unique specialty in operating complex virtual worlds. Like operating a world-class theme park in the physical world, this knowledge is specialized based on constant iteration and refinement, and very difficult to replicate at scale and over time. In short, the same live operations support that keeps millions of PC players in a game for the past two decades is likely to keep billions of mobile players playing for decades in the future. A major analytical challenge for investors is to understand how a virtual world company like NEXON grows over time.
In the old world of video games, a company depends on new products for its revenue. No new products, no revenue. Analysts understandably must fixate on catalysts in the form of new product launches. Investors think that because NEXON is a game company, it relies on new product introductions for growth. Not true. The economics of a virtual world company don't look like that at all. A virtual world company might double in revenue within a few years without any new products. The economics of a virtual world, and therefore the analytical challenge, are not an evolution of the traditional games business. It is a different paradigm altogether. There are so few virtual world companies operating at scale, it is easy to miss this underlying difference. In this way, virtual world economics are more akin to theme parks.
We obsess over day-to-day details that make for a great user experience and build a business over years. Except our theme parks are not physical. They are rendered in software and delivered from the cloud, and can increasingly be played anywhere by anybody on the planet. As robust as our current virtual worlds are, of course, we are expanding. We are extending our existing virtual worlds onto new platforms like mobile and creating new virtual worlds. Today, we are developing an exciting pipeline of new online games like Mobile Dungeon & Fighter, KartRider: Drift, and multiple new titles from our Embark Studios in Sweden. Most important from an investor perspective, each of the new games we are developing today is designed to be a virtual world. Each has the same potential for decades-long revenue growth and profitability.
As we layer these new virtual worlds and as we expand beyond the PC to mobile and beyond, we foresee a step change in earnings power. My final point relates to our Q1 2021 guidance, which Shiro Uemura will report on in just a few minutes. We are extremely pleased with our exceptional performance in 2020. However, this success does not mean that the rate of growth will be constant each quarter. Our experience tells us that growth is nonlinear and occurs over an extended period. We believe the growth potential of virtual worlds is the game industry's biggest catalyst, and we strongly believe that mobile represents a massive opportunity as the potential player base expands from hundreds of millions to billions. We expect to see variations in our PC-to-mobile ratio in individual quarters, the scale and the direction of these forces are both massive and unmistakable.
To summarize, NEXON delivered a record-setting performance in both the fourth quarter and full year 2020. We are extraordinarily gratified by the robustness of our massive IP franchises, thanks to the great work by NEXON employees around the world. We look forward to introducing several new virtual worlds in 2021. With that, I will turn the call over to Shiro Uemura.
Thank you, Owen. Next, I will review our Q4 fiscal year 2020 full year results. For additional details, please see the Q4 2020 investor presentation available on our Investor Relations website. We again delivered record-breaking Q4 revenues and operating income, which were driven by the growth of multiple major blockbuster franchises, which were expanded onto the mobile platform. Group revenues were JPY 66.4 billion, up 35% year-over-year on an as-reported basis and up 34% on a constant currency basis, which exceeded our expectations. This was driven by the strong performances of FIFA Online 4 and MapleStory in Korea. By region, revenues from Korea, Japan, North America, and Europe each exceeded our expectations. Revenues from China were in the range of our outlook, rest of world was slightly below our outlook.
Looking at the total company performance on a platform basis, PC and mobile revenues both exceeded our outlook and grew 16% and 76% year-over-year, respectively. Operating income was JPY 15.6 billion, which was within our expected range. While our revenues exceeded our expectations, HR costs were higher than our plan due to the higher performance-based bonus related to the terrific performances of our major titles, as well as our new mobile games. Net loss was JPY 29.8 billion, which was below our outlook, primarily due to a JPY 29.5 billion deferred tax liability, additionally recorded on the undistributed profits of our overseas subsidiary, as well as a JPY 21.0 billion FX loss related to the appreciation of the Korean won against the US dollar during the quarter and its corresponding impact on US dollar-denominated cash deposits. Let's move on to results by region.
Revenues from our Korea business in Q4 exceeded our outlook, primarily driven by stronger than expected performances of FIFA Online 4 and MapleStory. We saw strong results from all four of our major PC titles, which drove 48% year-over-year growth in our Korea PC business. MapleStory's revenue exceeded our expectation and grew 88% year-over-year, driven by well-received winter update and a successful collaboration with the popular K-pop group BTS. Dungeon & Fighter and Sudden Attack also grew 106% and 56% year-over-year respectively. FIFA Online 4's PC and mobile revenues combined exceeded our expectations and grew compared to Q4 2019, driven by successful introduction of legendary players, events, and content updates. Mobile revenues grew by 116% year-over-year, driven by contributions from The Kingdom of the Winds: Yeon, KartRider Rush+ and FIFA Mobile, as well as MapleStory M, which grew 51%.
Revenues from our Korea business grew by 72% on an as-reported basis and 70% on a constant currency basis and set a record Q4 revenues. Revenues from our China business were within our expected range and decreased 18% year-over-year on an as-reported basis and 20% on a constant currency basis. PC Dungeon & Fighter's Q4 revenue was in the range of our outlook. We continued the National Day update from Q3 and introduced other updates and events during the fourth quarter, all in which performed as planned. Revenue decreased year-over-year. ARPPU increased compared to Q4 2019 as the portion of light users was lower as compared to a year ago.
This was more than offset by decreases in both active users and paying users due to the strengthening of player identity verification and bot sanctions, reduced user engagement since the second half of fiscal year 2019, as well as lower sales from the National Day package offerings. MAUs decreased quarter-over-quarter. Active users trended quite stably in Q4 as compared with Q3, when active users declined during the quarter. In addition to the typical seasonality, the comps were high as Q3 included a period when we continued to benefit from the effect of the March large-scale updates. Paying users decreased slightly quarter-over-quarter, driven by item offerings which had rich lineups. ARPPU and revenues decreased due to seasonality. Revenues from our Japan business exceeded our outlook. On a year-over-year basis, we recorded a revenue increase of 82% on an as-reported basis and 51% on a constant currency basis.
We benefited from new titles including V4, TRAHA, and FIFA Mobile, all of which launched in 2020. Revenues from North America and Europe exceeded our outlook. On a year-over-year basis, revenues increased by 22% on an as-reported basis and 26% on a constant currency basis. This was driven by MapleStory and MapleStory M, which grew 124% and 55% respectively, as well as contributions from KartRider Rush+ and V4. Revenues from the rest of world were slightly below our outlook, but grew 14% year-over-year on an as-reported basis or on a constant currency basis. The year-over-year growth was driven by KartRider Rush+'s contribution as well as MapleStory, which grew 103% year-over-year. Next, I will review our fiscal year 2020 full year results. fiscal year 2020 highlighted the diversity and durability of the franchises that drive our portfolio.
Our focus strategy, combined with our substantial IP as we bring our virtual world to multiple platforms, is paying large dividends, which drove significant growth in both our major franchises and our mobile businesses. In particular, Korea reflected outstanding execution. After 84% year-over-year growth, Korea now accounts for 56% of NEXON Group's full year revenues. In Korea, MapleStory, Dungeon & Fighter, and FIFA Online 4 each achieved its highest full year revenue. MapleStory, a 17-year-old franchise, recorded a remarkable 98% year-over-year growth, and Dungeon & Fighter, a 15-year franchise, grew 55%. Now in its ninth with NEXON, the FIFA Online franchise also recorded year-over-year growth. As a result of the performance of these titles, our overall PC business grew 4% versus the prior year, despite our challenge in China's Dungeon & Fighter.
The expansion of our beloved franchises onto a mobile platform including The Kingdom of the Winds: Yeon, KartRider Rush+, and FIFA Mobile, as well as V4, drove 60% year-over-year growth in our mobile business. 1/3 of our group revenues was mobile in 2020. As a result of strong execution of our focus strategy, we achieved record high revenues and operating income for the full year. Our group revenues were JPY 293.0 billion, up 18% year-over-year on an as-reported basis and up 21% on a constant currency basis. Operating income was JPY 111.5 billion, up 18% year-over-year on an as-reported basis and up 23% on a constant currency basis. Excluding the impact of Forex, we have recorded top line growth for the nine consecutive years since we went public in 2011.
Net income was JPY 56.2 billion, down 51% year-on-year on as-reported basis, and 47% on a constant currency basis due to the JPY 29.5 billion deferred tax liability additionally recorded on the undistributed profits profits of our overseas subsidiary, as well as JPY 17.7 billion FX loss on our cash deposits. Now I'll move on to fiscal year 2021 Q1 outlook. We expect Q1 revenue to be flat or increase year-on-year. The expected growth from MapleStory, The Kingdom of the Winds: Yeon, and KartRider Rush+ will be partially offset by a year-over-year decline in Dungeon & Fighter's revenue in China. Q1 revenue range is expected to be JPY 82.8 billion-JPY 89.1 billion, representing a range between 0% decrease to 8% increase year-on-year on as-reported basis. On a constant currency basis, we expect the range between 3% decrease to 5% increase.
We expect our Q1 operating income to be in the range of JPY 35.3 billion-JPY 41.9 billion, representing 15% decrease to 1% increase year-on-year on an as reported basis, and 17%-2% decrease year-on-year on a constant currency basis. I will discuss the details later. We expect net income to be in the range of JPY 26 billion-JPY 30.9 billion, representing a 48%-38% decrease year-on-year on an as reported basis, and 49%-40% decrease year-on-year on a constant currency basis due to the operating income decrease, as well as JPY 18.7 billion FX gain we recorded in Q1 2020. In Korea, with the positive impact of our focus strategy, we expect MapleStory, Dungeon & Fighter Online, as well as MapleStory M, which has kept good momentum since the major update in December to once again grow double-digits year-on-year in Q1.
We also expect to benefit from The Kingdom of the Winds: Yeon, KartRider Rush+, and FIFA Mobile, resulting in the year-on-year growth in both our PC and mobile business. Accordingly, we expect Korea business revenues to be in the range of JPY 51.1 billion-JPY 53.8 billion, representing 28%-35% increase year-on-year on an as reported basis, and 24%-31% increase year-on-year on a constant currency basis. While we expect mobile revenues in Korea to increase year-on-year, we anticipate a sequential decline, mainly due to the lower contribution from The Kingdom of the Winds: Yeon and KartRider Rush+. We anticipate fewer players compared to Q4 as the player base settle following the games' launches. Over the long term, we are looking to grow the player bases for these games as we add rich content and events that will attract, retain, and reacquire lapsed players.
Turning to China, we anticipate Dungeon & Fighter revenue to decrease year-on-year. We expect China business revenue to be in the range of JPY 21.6 billion-JPY 24.2 billion, representing a 36%-28% decrease year-on-year on an as reported basis, and 37%-30% decrease year-on-year on a constant currency basis. As a reminder, our Q1 China outlook does not include any contribution from Mobile Dungeon & Fighter. We are working closely with our partners at Tencent, who tell us that they are making progress toward the release. We hope to have more information soon, but we understand that there are some factors that Tencent is managing in respect to the release. As for PC Dungeon & Fighter, we introduced a Lunar New Year update on January 21st, which includes the new dungeons and avatar package offerings. Active users and paying users have been stable from Q4.
However, they remain at low levels compared to last year. Lunar New Year package sales are expected to decline year-on-year. In addition, in the year-ago quarter, we introduced a large-scale update, which included the level cap release and third awakening. Therefore, Dungeon & Fighter revenue is expected to decrease year-on-year. While we do not expect a near-term major uplift in user metrics for Dungeon & Fighter, in order to promote mid-to-long-term growth, we are working on seasonal updates and additional updates in order to acquire new players and reacquire lapsed players. Our top priority is to sustain our games' user metrics at the current levels while stably operating the game. We are also taking measures to drive its mid-to-long-term growth prospects.
In Japan, we expect revenues in the range of JPY 3.1 billion-JPY 3.5 billion, representing 97%-123% increase year-on-year on an as-reported basis, and 93%-119% increase year-on-year on a constant currency basis. We expect to benefit from FIFA Mobile, V4 and TRAHA, as well as Blue Archive, a new mobile game developed by our subsidiary NAT Games, launched together with our partner Yostar on February 4th. In North America and Europe, we expect revenues to be in the range of JPY 4.1 billion-JPY 4.5 billion, representing 2% decrease to 8% increase year-on-year on an as-reported basis, and 1%-11% increase year-on-year on a constant currency basis. We anticipate MapleStory to grow double-digit compared with Q1 2020, when it grew 54% year-on-year. We expect this to be offset by a year-on-year decrease in Choices in MapleStory 2, which ended the service in 2020.
We expect revenues in the rest of the world in the range of JPY 3.0 billion-JPY 3.2 billion, representing a 22%-16% decrease year-over-year on an as-reported basis, and a 23%-17% decrease year-over-year on a constant currency basis. While we expect to benefit from KartRider Rush+, we expect this to be more than offset by a decrease in World of Dragon Nest, which launched in Q1 2020, as well as other mobile games. In Q1 2021, we expect operating income to be in the range of JPY 35.3 billion-JPY 41.9 billion, representing 15% decrease to 1% increase on a year-over-year basis. The primary driver for the higher operating income in Q1 2021 at the high end of the range is the revenue increase.
Other favorable factors include a decrease in impairment loss of JPY 6.1 billion recorded in Q1 2020, which will not be repeated in Q1 2021. Unfavorable factors compared to Q1 2020 regarding the operating income include, First, increased variable costs associated with revenue growth. Second, increased HR costs, including increased salaries as well as stock option costs. This year, we introduced a new HR strategy in our R&D center in Korea aimed at promoting sustainable growth and global expansion. In a highly competitive job market, the new policy will help us acquire and retain the top talent needed to achieve our vision of global leadership in entertainment. In a related decision, NEXON introduced a company-wide salary increase and top-level incentive system tied to individual performance.
Due to the introduction of the new compensation policy, which is additional to increased stock option costs and the ordinary salary hike, we expect a large increase in HR costs compared to Q1 2021. Third, increased marketing costs associated with ongoing promotions for KartRider Rush+ and The Kingdom of the Winds: Yeon. Lastly, increased outsourcing costs. The high end of the range reflects the fact that we expect the impact of negative drivers to be offset by that of positive drivers, resulting in a flattish operating income year-over-year. To summarize, in Q1 2021, we expect strength from multiple major franchises, while we expect this to be fully or partially offset by a year-over-year decrease in PC Dungeon & Fighter in China. Overall, we expect our group revenues to be flat or increase year-over-year.
In 2021, we will continue to focus on our daily live operations as we look to stably operate our major franchises. We will continue to build new virtual worlds, which we will layer upon our foundation that will continue to set us up for the long-term growth of our group's business. I would like to provide an update on the shareholder return and capital allocation strategy. Based on our 2020 shareholder return plan, we plan to pay a dividend of JPY 2.5 per share for the year end to the shareholders on the shareholder registry as of December 31, 2020. We plan to pay the same semi-annual dividend per share in 2021. With regards to our share repurchase policy that we announced on November 10, to buy back JPY 100 billion over a three-year period, we have not yet made an announcement about a specific repurchase plan.
We will consider several factors, including investment opportunities, financial condition, as well as the share price as we buy back our shares. Regarding our investments in global entertainment companies, we have completed investments totaling JPY 92.4 billion, which accounted for 58% of the $1.5 billion that the board of directors authorized and recorded an unrealized gain of JPY 29.5 billion under other comprehensive income as of Q4. This ends my comments. Back to you, Owen.
Thank you, Shiro Uemura. Before we get to your questions, I want to summarize three points we've made today. The business of online virtual worlds is fundamentally different than the rest of the games business. The way we run our business and the way you analyze it are not at all analogous to other segments of the game business. That means that like a physical theme park, our business of virtual worlds can grow substantially without the introduction of new games. This creates an analytical challenge for those who think of NEXON as a traditional games company, and therefore look for catalysts. We proved this important point yet again in 2020, most conspicuously with "MapleStory," a virtual world that launched 17 years ago that doubled its year-over-year revenue in Korea. We are nonetheless very excited about new virtual worlds we will be introducing in 2021.
They will serve as catalysts in the near to the midterm, but the real win is for us to keep them growing over years, as we have done with our other major franchises. With all that in mind, 2020 was a terrific year for us, but most importantly, it sets us up for more great years ahead. With that, we are ready to take your questions.
Thank you, Owen. Next, we would like to open up the lines to live question-and-answer. question-and-answer session will be conducted with Japanese-English or English-Japanese consecutive interpretation. Please be noted that interpretation will come between your questions and our answers. Please hold for interpretation before you hear our answers. Our answers will also be followed by interpretation, so please hold until the interpretation finishes before moving on to the next question. For those of you who have more than one question, we will take your questions one by one. Now we'd be happy to take your questions.
Today, we will accept questions from conference call participants. If you have a question, press zero one on your touchtone telephone. Once again, if you have a question, press zero one on your touchtone telephone. When we receive your input, you will hear the voice guidance. If you do not hear the guidance, please press zero one once again. If you need operator assistance, please call the operator by pressing star zero. We'll begin taking your questions shortly. Please hold on for a moment .
First question is from Junko Yamamura of Nomura Securities Company, Limited. Please, Ms. Yamamura, go ahead with your questions.
First question is from Junko Yamamura of Nomura Securities Company, Limited. Please, Ms. Yamamura, go ahead with your questions.
Thank you for this opportunity. I have two questions. The first question is as follows. You are doing very well in Korea. As for China, expectation from the Lunar New Year, if you look at the quarter-on-quarter comparison, it seems that the growth is a little bit weak. Probably one of the reasons is that some of the players on PC are waiting for the launch of the mobile and they are waiting for the purchase or the billing on top of the PC. That might be one of the reasons. The question is, what would happen to the players or the users after the launch of the mobile version? Do you expect to see some of the return to the PC or some kind of a flow going back and forth between the different platforms, between PC and mobile?
How do you see that kind of movement between the different platforms?
[Non-English content]
Thank you for your question. It is very difficult to give you the precise answer to your question. I think to some extent, as you mentioned, that the players on PC are waiting or refraining from purchasing or bidding on top of the PC because they are waiting for the launch of the mobile version. Looking at the PC 'Dungeon & Fighter,' as you know, that the downtrend started in the second half of 2019, and that trend continued in 2020. As we mentioned earlier, if you look at other KPIs in Q4, it is true that the downtrend continues. From October to December, we saw the flat movement of those KPIs. As of now, the China PC 'Dungeon & Fighter' is stable, although at the low level. Based on that, we started the new Q1 and the Lunar New Year started.
If you look back at the last year, there was a major update then, including the level cap release and the third awakening. Compared to that, we expect about 30% decrease year-on-year. It's difficult to foresee what would happen to the PC players after the launch of the mobile. We are hoping that rather than seeing the cannibalization, we can generate some synergy effect. That is how we are operating this game so that we can reactivate the PC players with the launch of the mobile. Thank you.
[Non-English content]
Second question is on the HR cost and your forecast on that. For the two quarters in a row, the HR cost was JPY 18 billion, JPY 19 billion, close to JPY 20 billion level. Although you did mention this in your presentation, do you expect this level of HR cost to continue for the full year? Or is it just a temporary push or increase in Q4 and Q1? If you can give us some forecast or outlook in the longer term, it would be very much appreciated.
[Non-English content]
If you look at the HR cost, you saw the increase in Q4, we talked about the forecast for Q1. There are some differences between the two. The increase of the HR cost in Q4 is in relation to the incentive bonus that we offered, reflecting the good performance of 2020. As for Q1, a part of this increase is due to the stock option and the introduction of the new compensation program that we talked about earlier. For a game company like us, our most important asset is the talent and human resources. We need to make sure that we provide a sufficient incentive to the people who work here. This would lead to the long-term growth of the company. We consider this as a long-term investment, that's why we introduced this new compensation program.
Same as the stock option, this would be booked or recorded for a certain period of time. We expect HR cost to stay at the similar level in coming quarters.
[Non-English content]
Thank you very much for your answers.
[Non-English content]
The next question comes from Mr. Minami from Goldman Sachs. Please.
[Non-English content]
Thank you for giving me the opportunity to ask a question. I have two questions. My first question has to do with the new title that we expect to come from Embark Studios. If my memory is correct, I think we're supposed to hear some update during this time of the announcement. Can you sort of explain or share with us what is the progress so far? To the extent you can, please give us some update information. Thank you.
I'll take your question. This is Owen. We understand and we share your excitement about the potential of the games in development from Embark. We're not ready to release the details or the launch dates yet for those games. What I can tell you is that what we've seen to date is very exciting, and we believe that the games from Embark are going to have a profound impact on how games are created and how they're played in the future. I've been playing the builds internally myself, and as a gamer, I'm really excited. I can tell you that. We're going to be talking about it more in the coming months, and this will be dictated by marketing, of course. We hope to provide you more details in the coming quarters. We're very excited about this.
[Non-English content]
[Non-English content]
Thank you very much. My second question has to do with MapleStory. I do recall that you were able to explain about making a collaboration with Korean BTS, and you were able to have a very good result. Now, of course, collaborating with BTS, that in a very large sense is a collaboration within the same entertainment industry. We could also say this is a new type of collaboration between virtual and real world. I'm very interested in what this could bring about in the end. Do you expect that you'll be able to capture new users through these types of collaboration? Do you think we'd be seeing or hearing from you this type of new collaboration or new fusion as we look down the road in the mid to long range?
I'll take this question as well. I think it's a very insightful question. The short answer to your question is yes, we do see more opportunities like this. As I said, in some ways with BTS, we were lucky. A couple of the members are big fans of MapleStory, it was a lot of fun for us to work together with them. They've got a lot of fans within NEXON, it's very fun for us to know that they're fans of NEXON's games as well. It was not only impactful, it was also a lot of fun for us. I think that this is the type of thing that we're putting a lot of thought to. We are focusing on a fewer number of very immersive games that are big intellectual property.
We get to focus on that smaller number of bigger things, it means that we can put time and attention to questions exactly like what you're asking. We see it not only as an opportunity to broaden the audience, but also to deepen the gameplay experience for our players.
[Non-English content]
[Non-English content]
Thank you. Well understood.
Thank you.
[Non-English content]
[Non-English content]
Next question comes from Hun Joon Kim of Macquarie Capital Limited. Go ahead.
Great. Thank you very much for your time today, management. I have a two-part question that relates to the same topic, and I'll ask them one by one. The first part, when I look at the MAU number that you guys have reported, Relative to last year, 27.4 million, and this fourth quarter, 17.3 million, we've seen about a 10 million decline in MAU. Can management just give us a sense of how we think about this breakdown, whether it's all coming from one singular game, or is it spread across different games? How do we think about the decline of this number relative to the ARPU in it? I'll follow with the second question thereafter.
[Non-English content]
[Non-English content]
[Non-English content]
Thank you. Your question about the MAU information. That is the combination or summary of all the PC games. I can say that it's mostly due to the China's Dungeon & Fighter. As we mentioned, one of the reasons is that in the past several quarters, we have seen the downtrend with this China's Dungeon & Fighter. Q4 last year, there was a very stringent bot sanction. This was another factor leading to the lower bots but the lower MAU. We think that this is the major reason behind this declining MAU trend.
Understood. Thank you for the clarification. I think one of the kind of common questions that investors might have off of a print where we have declining MAU and high ARPU is, I guess, the concern over monetization or, is this kind of the backdrop to having monetized too much? Then we're seeing some of the fallback on that. I think, to be honest, I think NEXON's gone through a few of these iterations with different games over time. Can you just give us a sense of where you feel some of your games are, whether it's MapleStory in Korea or Dungeon & Fighter in China, these things tend to have their cycles, if you will.
Where you think we are in terms of whether we've pulled the monetization lever a little bit too hard in the past, and we're just seeing kind of a recalibration here, or it really is just some of the light users that really went away and the underlying strength of the cohort isn't really impacted. Just where you see this going in coming quarters, from an ebb and flow kind of situation. That'd be great. Thank you.
[Non-English content]
Hun Joon Kim, this is Owen. Thanks for your question. I'd say a couple points. Number one is a big point that we have been focusing on. We've talked about focus a lot, and one of the things that we really focus on is being very careful about the exact topic. If the premise of your question is that we may be over-monetizing in games, and that's what we're seeing here, we would definitely disagree with that premise of your question. I'd add one other point that, like revenue, player growth does tend to occur in a nonlinear pattern over an extended period of time. Monetization is a really important topic, is a really important metric because it can reflect player engagement, meaning how much people are engaged in the game and how much time they're spending and enjoying the game.
It's safe to assume that when a player is investing more in a game, it's because they're enjoying the game and planning to continue. It's a little more nuanced than just one or the other. The premise of your question is not one that we would agree with at all, if I understood you correctly.
[Non-English content]
Great. Thank you for that. I mean, there's a little bit more to the context there, yeah, I think that's great for now, I'll go back to the queue. Thank you.
[Non-English content]
[Non-English content]
The next question comes from Mr. Seyeon Park from Morgan Stanley. Mr. Park, please.
Hi. Thank you for the opportunity. Given that we're going into 2021, I think coming off of Owen, your comments that you still have, or NEXON still has a lot of franchises where with the right content updates can still see a lot of growth. I guess for the benefit of investors, can we get a bit of color as to how you plan to drive growth in 2021? I'm assuming there's going to be games that you feel that you can continue to grow from current levels. You have games like "Dungeon & Fighter" in China, which is still in a declining trend. With that, whether we can get some layers of new titles, whether it's the new "KartRider" game or "Mabinogi" or Embark.
I know it's difficult to give very specifics given there's always a lot of moving parts, but maybe if you can give some scenarios as to how we should think about as you look back at the end of 2021, which platforms or titles that you feel can grow and drive growth for another strong year over the next 12 months. Thank you.
Thank you for the opportunity. As President Owen mentioned earlier, NEXON will still be able to achieve growth in 2021 while updating various franchises. I would like to ask you to explain in more detail what growth plan you have for 2021. For example, there are titles that you feel can grow more than the current level. On the other hand, for example, like "Dungeon & Fighter" in China, there are titles that are in a downward trend for a while. Among them, there are franchises that will release new titles in the future. For example, will a new title for "KartRider" be released, or will there be a title for "Mabinogi" or Embark Studios? I think there are things like that.
I think various things are happening at the same time, so it is probably not easy to talk about something specific here, but if you could talk about a scenario for 2021. In the end, if we look back and say, "In 2021, this platform became the driver to further grow NEXON," what can we expect? Please tell us about your growth plan for 2021.
Seyeon, I thank you for your question. In some ways, embedded in your question is in fact the answer to the question. Let me take a stab at filling out the picture a little bit to get to the crux of it. I think you've hit on a point which we were trying to make, actually, in our prepared remarks, and in some ways we've said before, but we're trying to be as crisp as we can about it. That's really the analytical challenge of analyzing a virtual worlds company. The way to think about it is, first of all, our base of revenues that come from existing virtual worlds. We call them virtual theme parks for a reason, because we operate them like theme parks.
They happen to be in software, we deliver them from the cloud, but they work in a lot of ways, they should be analyzed, in our view, like a physical theme park. That's an important understanding. One way to illustrate this, as we've said before, is our business off of just our existing virtual worlds could double within a not too large number of years, and within a couple of years, without any new products whatsoever. It's important to understand that. If you can really understand that, you can understand a virtual worlds company like us or like other virtual worlds companies. People are starting to look at the IPO of Roblox, for example. Because we're a games company, people ask us about catalysts, and catalysts are something that you think of very much in the traditional games business.
We look like a games company, but what we really are is a virtual worlds company. Now, if you want to talk about new games, we are very excited about our pipeline. As we've said, we've got three very big beats coming up that we're very excited about. One is Mobile Dungeon & Fighter, one is KartRider: Drift, and one is the first game from Embark. All three of those we're going to be talking about in the coming months. Each of those three, for their own reason, we're very excited about. As we layer these new virtual worlds, as we expand beyond the PC to mobile and beyond, we really foresee a step change in earnings power. So that's why we are so excited about the future in 2021 and beyond.
Thank you for your question. In fact, I think there was already an answer in what you said just now, I would like to draw it out in a little more specific detail.
[Non-English content]
Thank you very much.
[Non-English content]
[Non-English content]
Next question is from Jay Defibaugh of CLSA Securities Japan Co., Ltd. Go ahead.
Thanks for taking my question. I have just one. It seems that Electronic Arts is taking a new approach with its FIFA business, including partnering with another company in Japan. I was wondering, are there any implications from EA's new approach for your FIFA partnership in Korea and elsewhere? Thanks.
[Non-English content]
Jay, this is Owen. No, there's no change at all in our relationship with EA for anything having to do with FIFA or anything else.
[Non-English content]
Got it. Thank you.
[Non-English content]
Next question comes from Astris Advisory Japan, David Gibson.
Yes, thanks. It's David Gibson, Astris Advisory. Thanks. Owen, taking on your earlier answer, given your focus on fewer bigger games, we're seeing big games like Fortnite, Roblox, doing concerts, doing other events, having user driven content actually within it. Is that something that you're thinking about for your big fewer games longer term, that you're going to have user driven content events and turn them into much bigger entertainment platforms, or will you focus more on game only? Thanks.
[Non-English content]
Thanks for your question. I think it's a really important question. There's actually two very separate and distinct parts of the question. One is in-game events or promotion that goes across events that happen within a game from, for example, in the Fortnite case from a music star. The second and very different one is user-generated content. Both I think are very important. I've said before pretty publicly that I think a lot of the things that people talk about around games are not important for generating growth and revenue and sustainability. I think these are two that do really matter a lot. Taking events for one minute, I would say the key on that is, and I say this as a gamer, you've really got to make sure that it's relevant to the game itself in some way if you want it to be sustainable.
For everybody who sees these types of things happen, they're very enticing. They get written about a lot. For the gamers who are actually in the game, it has to be relevant to what they're doing as part of the game. That's what a gamer will tell you who spends a lot of time in that game or that virtual world. That is the creative challenge that needs to be addressed before this becomes a big and important thing. I would say this is something that we spend a lot of time thinking about. We also spend a lot of time thinking about user-generated content.
[Non-English content]
Thanks. On specifically the user-generated content, are you developing games with that in mind in the future that users can get involved with the creative process?
[Non-English content]
We don't have any announcements around that topic, I'm going to let our marketing team lead the way on how we talk about that externally for now.
[Non-English content]
Okay, no problem. Thank you. Final one, just very simple. I'm not sure if you can comment. Press reports were that Final Fantasy XI Mobile had been scrapped by your team. Is that correct? Can you give me a comment about why that was the case after several years of development? Thanks.
David. Sorry. We couldn't hear you properly. Can you repeat your question again? Thank you.
Sorry. Yeah, sure. Final Fantasy XI Mobile, according to press reports, it's been canceled. Could you comment around that? Why is the case, given it's been almost two years or more of development time? Thank you.
[Non-English content]
Sure. This is Owen again. NEXON and Square Enix have made the mutual decision that our work on "Final Fantasy" just wasn't showing the level of creative differentiation, really, that we think our players expect from the "Final Fantasy" franchise. Rather than releasing a game that didn't break new creative ground, we've agreed to halt the project and redeploy our creative teams onto other projects. We think this really reflects, is all part of the larger piece of us taking a very hard look at every project we do and focusing on the things that we really believe in, which includes, in large part, NEXON's own intellectual property, which we think is very powerful. As you iterate and you go through the creative process, sometimes you're able to really get the core of the fun, and sometimes you're not able to get there.
I'd classify our relationship with Square Enix as enormously respectful. I personally am very fond of their Chief Executive Officer. I've known him for a long time. I have huge respect for their creative teams, and we've worked very closely together. We made the decision to protect the value of their IP and to focus our resources on what we think were higher and better uses.
[Non-English content]
Thanks very much to all of you for your questions. Look forward to being in contact in the future. Thank you.
[Non-English content]
Thank you very much.
[Non-English content]
Ladies and gentlemen, once again, if you'd like to ask a question, please press zero one on your touchtone telephone. This concludes the question and answer session. Ms. Ara, at this time, I'd like to turn the conference back 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 IR team at investors@nexon.co.jp should you have any further questions. We appreciate your interest in NEXON and look forward to meeting you, whether it is here in Tokyo or in your corner of the world.
Thank you. That concludes today's conference. Thank you for your participation. You may now disconnect.