Nexon’s huge first quarter financials made EA and Blizzard look downright shabby

    
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While EA and Activision-Blizzard reported truly meh first quarter 2019 earnings, Nexon was out there making the case for why somebody ought to pay its owners’ $9B asking price in a buyout.

The Korean gaming giant reported a quarterly revenue of ¥93.1 billion, which is up 3% since first quarter last year. Nexon attributes the record quarter to the “stronger-than-expected performances of Dungeon&Fighter in China, MapleStory, FIFA ONLINE 41, and new mobile game Lyn: The Lightbringer in Korea.” It’s also twice as much as the company pulled in over Q4 2018. (This seemed so absurd at first that I ran the numbers multiple times, but there it is: Q4 2018 revenue was only ¥46 billion.)

But as we reported back in February, Nexon has been shifting heavily to mobile MMOs, especially in the west, in spite of the fact that over 80% of its income comes from PC games, which is unlikely to make our particular audience happy. The company expects 2019 will be another record revenue year across the board – even for its North America and European sectors, where it’s planning to launch OVERHIT, Magia, SINoALICE, and Durango: Wild Lands.

Source: Nexon investor site, press release

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Ald

I’m happy mobile is making a killing. More power to companies focusing on it. But it’s not for me and i don’t give a damn about it as a PC gamer. I don’t use that platform for my gaming, other than a bit of Pokemon Go with friends here and there. I’m looking for a company to make good PC games for gamers instead of trying to please shareholders.

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Chosenxeno .

Mobile has more marks than any other platform. Sad what mobile is. I remember how cool the Splinter Cell game was for mobile back in the day. Now it’s all cash grabs.

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Malcolm Swoboda

No it isn’t. Though its difficult to track down the nicer titles. But there are absolutely fun experiences, that aren’t even F2P/cashgrabs but $2-30 single purchases.

PurpleCopper
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PurpleCopper

Everyone has a phone, not everyone has a console/PC. Simple as that.

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Utakata

“Do you guys not have phones?” o.O

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Erik Setzer

Well… no. It’s not “simple as that.” I’d bet that my sister still doesn’t have a phone that can play these games on it, but she’s got a console and a PC. Heck, I wouldn’t have a phone that could play newer games, if it wasn’t for Apple basically making old iPhones self-destruct over time and the fact that the apps for the company I work for don’t work on older iPhones. I can think of a lot of people who aren’t in a rush to get the latest phone, but they’ve got a PC or console that’s capable of playing games.

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Dug From The Earth

And some wonder why Blizz and EA are trying to move to mobile….

Not that its a good thing… most mobile game profit comes from cheap tactics and taking advantage of weak willed gamers, children, and general flaws in human behavior.

Thats NOT where gaming should be going, just because it makes more money.
The porn industry makes TONS of money too, but do we want our TV shows and hit movies to follow suit? Wait… dont answer that.

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TherecDaMage .

Well what do you expect. EA and Blizzard’s financial reports were seen as failures. Nexon’s report was a success largely in part to their focus on mobile titles. A company like Blizzard/Activision is going to want to maximize profits so that every financial report isn’t met with negative press, resulting in their stock dropping. They’ll focus on mobile if it means the most people will play and pay for their titles regardless of what the smaller, more loyal fanbase wants.

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Dug From The Earth

Know why Blizz and EA’s reports were seen as failure? Because they have long stopped listening to what their customers want, and have been going all in 150% doing what they THINK will make them money.

Time after time, it doesnt work.

Maybe if, you know, they went back to making good games, that customers want, their earnings might actually go UP again. Just look at Sony, its been working for them, with games like God of War, Uncharted, Spider-Man, Horizon Zero Dawn, etc etc. Even Ubisoft is catching a clue with their latest games.

Greed is their own downfall. Their goal isnt to make a GOOD game that encourages people to buy, their goal is to make as much money at whatever cost, even taking advantage of peoples addictions, weaknesses, and lack of willpower.

Both companies are going to lose their customers that want good games, but in return, will gain a slew of customers who arent gamers who want quality games, but rather, are gamers who are susceptible to the Pay 2 Win/Free 2 play/Microtransaction style business model.

That will surely make the investors happy…. but for those whose ambition is to make good games, unless all that $$$ rolls downhill, they wont be wanting to work for blizzard or EA anymore.

Also… guess what… China isnt dumb. They are going to see all these non-chinese corporations trying to cash in on THEIR market, and they are going to shut it down. Did you see what happened with PUBG? They banned the game, and tossed up their OWN clone of the game. When this happens, poor Blizzard and EA wont have their loyal fans to come back to anymore, because we will all have said “FU” to them and moved on.

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Loopy

Don’t you people have cellphones? Oh… you do..

MurderHobo
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MurderHobo

15% YoY gain in net income, driven it says primarily by US dollar-denominated cash deposits, but their growth was biggest in China and S.Korea?

Can someone better explain that increase? Is this U.S. currency being transacted mostly by the global player base, or is the bulk of this from U.S. players making microtransactions in Maplestory, etc…?

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Paragon Lost

Mobiles games, no surprise. A vast amount of people have smart phones of some sort today. What I don’t get is why every freaking game company wants to do the same thing as everyone else.

I get that mmorpg for pc’s will always be a smaller slice of the money to be made pie, smaller then consoles since PCs cost more, that said, there is “still” a freaking market for it. So why not work that market? Every potential revenue stream should be one worth looking at.

Instead we’ve got a bunch of sheep who all move over to the same damn plot of grass to graze. (mutter) Which over saturates that location and after a while they’ll all no longer be making any money.

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MassivelyMacD

Every freaking TV network has a talent show and a daily talk. If it works for others, we want a piece of the cake. Hitting an innovation is so difficult that it is easier to copy successful mechanics rather than invent your own.

Everybody around me tells me that capitalism is great, yet everybody is gruntled over things that have their roots exactly there.

Personally I don’t need companies to earn money until their stakeholders cannot walk anymore because their pockets are so filled with money. I like me a healthy sustainable company that creates stuff which I can enjoy, that is all. It does not need to be the biggest ever to make me feel like I follow the right guys. I totally like stories like the one of Concerned Ape and I like Stardew Valley, since it has been made by somebody with a love for gaming rather than optimizing shareholder value.

In my opinion we all need to focus more on the human aspects of life. Profit maximization is not part of that.

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Paragon Lost

Lazy, unethical capitalism at it’s finest.

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Erik Setzer

Yeah, we should totally switch to some other economic system, because people following the leader on innovation is crap, it’d be so much better to remove any incentive for anyone to innovate, and then when we have no innovation we don’t have to worry about people playing follow-the-leader. When the games are all garbage, it’ll also be nice to not have to worry about buying any games (but not that anyone would be able to afford them anyway).

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TherecDaMage .

So what you are saying is Mobile MMOs are a good thing! Diablo Immortal is a wise move by Blizzard if they want to maximize profits like Nexon and not have game sites worrying about their future.

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Koshelkin

It is a sound move for a company trying to make money, it wasn’t a smart move, though, to feature it as a major announcement at a con targeted at their core gamers.

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Paragon Lost

Exactly. Their “current” core group isn’t interested and they insulted and annoyed that core group instead. They can feel free to develop into other markets but they need to go about it smartly and not in an insulting foolish sort of way that they did at this time.