Investor Presentation Q4 2014

Transcription

Investor Presentation
Q4 2014
February 12, 2015
NEXON Co., Ltd.
© 2015 NEXON Co., Ltd. All Rights Reserved.
Owen Mahoney
President and Chief Executive Officer
2
2014 Financial Results
(Unit: ¥ billions)
Operating Income1
Revenue
Net Income2
172.9
155.3
50.7
2013
2014
2013
45.5
2014
30.1
29.3
2013
2014
2014 and 2013 Operating Income includes impairment loss of ¥14.7 billion (including impairment loss of gloops’ goodwill of ¥11 billion) and ¥11.6 billion respectively on goodwill and
tangible/intangible assets related to game IP and publishing rights.
2 Net Income refers to net income attributable to owners of the parent company, as stated in Nexon’s consolidated financial results.
1
3
2014 Highlights

Two-year strategy of focusing on game quality and longevity is underway

China: Introduced series of high-quality content updates for Dungeon&Fighter throughout 2014; Q4 China revenues were up
36% year-over-year

Korea: Very strong performance resulting from execution of quality-first strategy
‒
52% year-over-year revenue growth
‒
Mobile: revenue up more than 8x year-over-year with launches of high quality titles
‒
PC Online: strong due to high quality live operations
‒
Boosted the already successful title EA SPORTSTM FIFA Online 3
‒
All other titles collectively grew year-over-year

Japan: Games did not consistently meet high standards for quality as we worked in rapidly changing mobile browser and
native game market dynamics

North America: Green shoots of growth. Revenue returned to growth in 2H 2014 with improving operations and marketing
under new management team

Pipeline: Best in years – and getting stronger
‒
DomiNations (mobile), MapleStory2 (PC), Ghost in the Shell Online (PC), and many more
‒
Recently announced licensing agreement with Warner Brothers Group for mobile game based on successful LEGO® franchise
4
2015 and Beyond

Focus on quality demonstrated some early successes in 2014, validating our
strategy

Continue to prioritize game quality as best way to create long-term financial growth
and shareholder value

Focusing development resources only on games that matter
‒
Fun and highly differentiated
‒
Long life cycles

Focusing live game operations on long-term growth and player retention

Richest pipeline in Nexon’s history
5
Unmatched Pipeline1
PC Online
1H 2015
Dirty Bomb by Splash Damage
(Publishing, U.K.)
Counter Strike Online 2
(Co-development, China)
Tree of Savior
(Publishing, Korea)
Ghost in the Shell by Neople
(In-house, Korea)
MapleStory2
(In-house, Korea)
Ar:piel
(Publishing, Korea)
Peria Chronicles
(In-house, Korea)
Sudden Attack 2
(In-house, Korea)
AIMA
(Publishing, Korea)
Super Fantasy War
(In-house, Korea)
TBA by Boss Key Productions
(Strategic Partnership, US)
Mabinogi: Duel
(In-house, Korea)
TianLongBaBu
(Publishing, Korea)
TBA by gloops
(In-house, Japan)
Kartrider Mobile
(In-house, China)
Durango
(In-house, Korea)
TBA by Envision Entertainment
(Strategic Partnership, Germany)
Legion of Heroes: Raid
(In-house, Korea)
TBA by Social Spiel
(Strategic Partnership, Austria)
Mobile
Gwanggaeto the Great
(In-house, Korea)
2H 2015 and onward
DomiNations by Big Huge Games2 TBA by Shiver Entertainment
Legion of Heroes
(In-house, China and Japan)
TBA by TURBO Studios
1
2
Chart is illustrative excerpt pipeline
Big Huge Games is formerly known as Secret New Co.
6
DomiNations (Mobile): Trailer
7
MapleStory 2 (PC Online): Trailer
8
Ghost in the Shell Online (PC Online): Trailer
9
Japan Focus
2014 Recap

gloops
‒
Developed several new mobile native games; launched four1 during Q4 2014
‒
Games did not consistently meet high standards for quality as we worked in rapidly changing
mobile browser and native game market dynamics

Right strategy, but not executed well enough

Recorded ¥11 billion impairment loss of gloops’ goodwill
Focus for 2015

gloops
‒
‒
1
Development:
‒
Mobile native games: pare down pipeline to focus on quality
‒
Mobile browser games: selective focus on high quality games
Live operations: focus on game longevity

Leverage our global pipeline, including high quality titles developed in Korea / U.S.

Secure publishing rights of high quality games
4 native titles launched during 2014 are: Skylock, Summon Soul Battle, Crimson Wars, and Toys Drive
10
Key Strategic Themes

Quality matters – best way to create shareholder value
– New games: fun and highly differentiated
– Live game operations: focus on game longevity

Requires focus. Performance based on strong execution of core strategy

Focus on game quality and longevity drives long-term success – shareholder value
11
Long-term Strategy and Vision1
2014 Revenue by Region
Long-term Growth Vision
West
M&A
M&A
Revenue
Asia
2014
Year
Existing
1
New PC / mobile
West
Above graph is illustrative and not to scale
12
Committed to Building Shareholder Value

Nexon management is strongly committed to driving growth and shareholder value

Continue to focus on shareholder returns through growing earnings as well as returning
capital through dividends and share repurchases

Scheduled to pay ¥5 per share dividend for the year-end despite gloops impairment
charge
13
Shiro Uemura
Chief Financial Officer
14
Q4 2014 Results
15
Q4 Highlights
 Revenues were ¥42.9 billion, up 25% year-over-year on an as-reported basis, up 14% on
a constant currency basis
–
Exceeded high end of our outlook
–
Outperformance was primarily driven strong results from China
 Operating loss was ¥0.7 billion and net loss1 was ¥4.5 billion, both below the low end of
our outlook
–
Operating income underperformance was primarily due to impairment loss on gloops’ goodwill of
¥11 billion
–
Net income underperformance was primarily due to the impairment loss in addition to higher-thanexpected tax expenses (one-time factor), while having FX gains in foreign currency-denominated
cash deposits and account receivables
1
Net loss refers to net loss attributable to owners of the parent, as stated in Nexon’s consolidated financial results
16
Impairment Loss / Year-end Dividend
 Recorded ¥11 billion impairment loss of gloops’ goodwill
–
Due to the continued slowdown of mobile browser games and lack of hits in new mobile
native games, recorded the impairment loss of gloops’ goodwill
–
The balance of gloops’ goodwill as of December 31st 2014 is ¥20.3 billion
 Scheduled to pay ¥5 per share dividend for the year-end despite gloops
impairment charge
17
Q4 Financial Results
(Unit: ¥ millions, except per share data)
1 PC
2
revenue includes revenues other than PC / mobile revenues
Net income / (loss) refers to net income / (loss) attributable to owners of the parent, as stated in Nexon’s consolidated financial results.
18
Regional Revenues
(Unit: ¥ millions)
Q4 2014 Revenue by Platform
Q4 2014
Q4 2013
(AsReported)
(Constant
Currency)
YoY % Change
(Constant
(AsCurrency)
Reported)
Mobile
21%
1
Revenue by Region
China
Korea
Japan
North America
Europe and Others 2
Nexon Total
¥12,065
11,654
8,274
1,201
1,273
34,467
¥16,441
16,749
6,929
1,623
1,190
42,932
¥14,761
15,051
6,929
1,424
1,102
39,267
36%
44%
(16%)
35%
(7%)
25%
22%
29%
(16%)
19%
(13%)
14%
27,750
6,717
34,041
8,891
30,737
8,530
23%
32%
11%
27%
6,260
457
5,384
3,507
5,384
3,146
(14%)
667%
(14%)
588%
Nexon Total
34,467
42,932
39,267
25%
14%
FX Rate
100 KRW/JPY
CNY/JPY
USD/JPY
9.48
16.40
100.46
10.55
18.59
114.54
9.48
16.40
100.46
PC
79%
Revenue by Platform
PC3
Mobile
Japan
ex-Japan
Q4 2014 Revenue by Region1
North
America
4%
Japan
16%
Europe
and
Others
3%
China
38%
Korea
39%
1
Based on the regions in which revenues originate; not a representation of revenues according to Nexon entities.
Europe and Others includes other Asian countries and South American countries.
3 PC revenue includes revenues other than PC / mobile revenues.
4 For the KPIs (MAU, Pay Rate and ARPPU) of PC online games, please refer to appendix of this presentation.
2
19
China – Highlights
YoY% change:
(Unit: ¥ millions)

Dungeon&Fighter
–
Strong performance supported by well-received content
update and item sales, particularly during November
and December
–
MAUs decreased in November and December; overall
Q4 MAUs flat quarter-over-quarter
–
Tier 1 content update “Kunoichi” update introduced
during Q4
Dungeon&Fighter
“Kunoichi Update”
+36%
Constant Currency:
+22%
21,302
16,441
15,685
13,530
12,065
Dungeon&Fighter
Game Play
Q4 2013
As Reported:
Q1 2014
Q2 2014
Q3 2014
Q4 2014
20
Korea – Highlights
(Unit: ¥ millions)

YoY% change:
Presented 15 high quality new titles, including 9 PC
games and 6 mobile games, at G-STAR (November)

As Reported:
+44%
Constant Currency:
+29%
Launched mobile game Pocket MapleStory for Kakao
(10/27) and PC online game Closers (12/23)
19,976
16,749

Year-over-year growth from key PC titles:
–
Solid performance from EA
FIFA Online 3,
Sudden Attack, MapleStory and Mabinogi Heroes
–
Content updates and promotions well-received
15,251
SPORTSTM
13,433
11,654
15,882
13,492 PC
14,167
1
10,965
11,257
4,094
2,468
Pocket MapleStory for Kakao
Game Play
1
Closers Game Play
PC revenue includes revenues other than PC / mobile revenues.
397
Q4 2013
3,257 Mobile
1,084
Q1 2014
Q2 2014
Q3 2014
Q4 2014
21
Japan – Highlights
(Unit: ¥ millions)

YoY% change:
Mobile revenue was ¥5.4 billion, down 3% quarterover-quarter primarily due to declining browser
game revenues
8,274
As Reported:
-16%
Constant Currency:
-16%
8,121
7,656
7,232
1

PC revenue was down 7% quarter-over-quarter
2,014
2,021
6,929
1,697
1,662

1
1,545 PC
gloops launched 4 native games in Q4
6,260
Skylock
5,959
5,570
5,384 Mobile
Skylock TV mass promotion
Q4 2013
1
6,100
PC revenue includes revenues other than PC / mobile revenues.
Q1 2014
Q2 2014
Q3 2014
Q4 2014
22
North America, Europe and Others – Highlights

North America
–
Achieved year-over-year revenue growth from key PC titles, MapleStory, Mabinogi, and Vindictus, supported by
improved operations and marketing
–
Launched Legion of Heroes on Android (10/23)
(Unit: ¥ millions)
(Unit: ¥ millions)
YoY% change:
YoY% change:
As Reported:
+35%
As Reported:
Constant Currency:
+19%
Constant Currency:
-7%
-13%
Europe and Others
North America
1,623
1,201
Q4 2013
1,472
1,420
1,345
1,131
Q1 2014
Q2 2014
Q3 2014
1,300
1,273
Q4 2014
Q4 2013
1,144
Q1 2014
Q2 2014
Q3 2014
1,190
Q4 2014
23
Q1 2015 Outlook
Q1 2015 Business Outlook
(Unit: ¥ millions, except per share data)

Expect revenues to be down 7% to up 1% year-over-year on an as-reported basis
Q1 2014
Revenues
1
PC
Mobile
Operating income
Net income2
¥47,491
40,297
7,194
21,171
16,144
¥44,259
36,859
7,400
14,715
12,793
36.74
29.66
9.63
16.83
102.78
10.55
18.59
114.54
Earnings per share
FX Rate Assumptions
100 KRW/JPY
CNY/JPY
USD/JPY

Q1 2015 Outlook
~ ¥47,728
~ 39,641
~
8,087
~ 18,138
~ 15,669
~
36.33
YoY
(7%)
(9%)
3%
(31%)
(21%)
~
~
~
~
~
1%
(2%)
12%
(14%)
(3%)
n/a
~
n/a
10.55
18.59
114.54
Forex sensitivity: every one Japanese yen move against the U.S. dollar would have the following impact on our
financials for the first quarter of 20153
Revenue
Operating Income
0.28 billion yen
0.14 billion yen
1 PC
revenue includes revenues other than PC / mobile revenues.
income refers to net income attributable to owners of the parent, as stated in Nexon’s consolidated financial results.
3 In most situations, the exchange rates of both the South Korean won and the Chinese yuan are linked to the U.S. dollar.
2 Net
25
2015 Q1 and Full-Year Regional Outlook
China
Q1
 Expect high teens to high single digit % YoY decrease on an asreported basis
 Dungeon&Fighter: introduced a high quality tier 1 content update
(Lunar New Year update) on February 10th
Full-Year
Mobile
 Preparing for Legion of Heroes launch (publisher: Chukong)
Korea
Q1
 Expect high teens to 20+% YoY increase on an as-reported basis
 Tier 1 content update scheduled for major PC titles
Full-Year
 Multiple PC / mobile titles to be launched in 2015 across genres
 Global launches scheduled for several mobile titles
 Scheduled to launch Kartrider Mobile (publisher: Tiancity)
PC
 Counter Strike Online 2 scheduled for CBT in 1H 2015
Japan
Q1
 Expect 20+% YoY decrease on an as-reported basis
 gloops launched Gururin Quest (native) on 1/27
 Nexon Japan to publish Kemono Friends (native) on 3/12
Full-Year
 Scheduled to launch LINE Legion of Heroes
 gloops to launch 5+ mobile titles in 2015
North America, Europe and Others
Q1
North America
 Expect high teens to 20+% YoY increase on an as-reported basis
 Dirty Bomb (PC): CBT in progress on STEAM
Europe and Others
 Expect 20+ to high teens % YoY decrease on as-reported basis
Full-Year
 Scheduled to launch DomiNations / Legion of Heroes on iOS
(mobile) in North America
26
Q1 2015 Operating Income Margin Outlook
YoY Operating Income Margin Comparison
Expect Q1 2015 operating margin of 33% to 38%
due to:
2%
4%

Variable costs, including royalty costs
associated with third-party licensed games,
such as FIFA Online 3 and FIFA Online 3 M

HR costs associated with increase in salary
and headcount primarily in Korea

Marketing costs related to new title releases
in Korea and North America

Revenue mix and Others
1%
45%
38%
–
OI Margin
Q1 2014
Royalty
HR Cost
Marketing
OI Margin
Q1 2015
(High-end)
Revenue mix change with increased revenue
contribution from Korea, which has lower
margin than China, as well as mobile
27
2015 Tier 1 Content Update Schedule
China
Game Title
Q1 2015
Q2 2015
2H 2015
Winter Content Update
Lunar New Year Update
7th Anniversary Update
TBD
TBD
TBD
Summer Update
Roster Update
MapleStory Ice & Burn Update
Summer Update
Children’s day Package
Chuseok Package
Rare Avatar & Christmas Package
Winter Update (continued from Q4
2014)
TBD
TBD
Summer Update
National Holiday Update
Dungeon&Fighter
Counter-Strike Online
Korea
EA SPORTSTM FIFA Online 3
MapleStory
Dungeon&Fighter
Sudden Attack
28
Appendix
29
Summary of Results and Key Operational Metrics
(Unit: ¥ millions except per share data)
Q2 2013
Q1 2013
(By Region)
China
Korea
Japan
North America
Europe and Others
(By Business)
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
YoY%
¥20,409
10,589
9,927
1,418
2,021
¥15,477
8,605
9,398
1,446
1,698
¥15,962
12,151
8,755
1,364
1,651
¥12,065
11,654
8,274
1,201
1,273
¥21,302
15,251
8,121
1,345
1,472
¥13,530
13,433
7,656
1,131
1,144
¥15,685
19,976
7,232
1,420
1,300
¥16,441
16,749
6,929
1,623
1,190
36%
44%
(16%)
35%
(7%)
36,877
7,487
29,333
7,291
32,995
6,887
27,750
6,717
40,297
7,194
28,459
8,435
35,931
9,682
34,041
8,891
23%
32%
7,217
7,054
6,482
6,260
6,100
5,959
5,570
5,384
(14%)
270
237
405
457
1,094
2,476
4,112
3,507
667%
Revenue
44,364
36,624
39,883
34,467
47,491
36,894
45,613
42,932
25%
Operating income/(loss)
20,716
13,425
16,237
327
21,171
9,962
15,124
(748)
n/a
Net income/(loss)2
15,150
11,365
8,054
(4,437)
16,144
4,085
13,585
(4,498)
n/a
34.77
25.98
18.35
(10.10)
36.74
9.33
31.49
(10.45)
n/a
110,510
112,235
103,820
138,843
149,040
140,157
114,155
117,729
8.53
14.73
92.42
8.81
15.94
98.76
8.94
16.06
98.95
9.48
16.40
100.46
9.63
16.83
102.78
9.95
16.54
102.16
10.15
16.87
103.92
10.55
18.59
114.54
71.5
11.5%
2,532
n/a
71.0
10.2%
2,181
n/a
62.6
10.4%
2,447
n/a
53.9
10.0%
2,617
2,492
55.9
11.0%
3,639
n/a
51.9
10.2%
2,781
n/a
52.7
9.7%
3,476
n/a
50.5
9.3%
3,776
3,379
PC online1
Mobile
Japan
ex-Japan
Earnings/(loss) per share
Cash and deposits
FX rate
100 KRW/JPY
CNY/JPY
USD/JPY
Key Performance (Excluding Mobile)
MAU (millions)
Pay Rate
ARPPU (as-reported)
ARPPU (constant currency)
3
1
PC revenue includes revenues other than PC / mobile revenues
Net income/(loss) refers to net income / (loss) attributable to owners of the parent, as stated in Nexon’s consolidated financial results.
3 Using the currency rates of Q4 2013.
2
30
COGS and SG&A
(Unit: ¥ millions)
FY2013
Total Cost of Revenue
1
Royalty 2
HR cost (COGS) 3
Other(COGS) 4
Total SG&A 1
HR cost
PG fee 5
R&D
Marketing / advertising expenses
Depreciation and amortization
Other 6
Other Income 7
Other Expense 8
Q1
¥7,831
Q2
¥7,734
FY2014
Q3
¥9,229
Q4
¥9,358
Q1
¥10,249
Q2
¥9,839
Q3
¥12,731
Q4
¥11,516
2,673
2,875
2,283
2,180
3,193
2,361
3,539
3,014
2,676
3,046
3,219
3,093
4,055
3,461
2,733
3,317
3,580
2,942
6,606
3,372
2,753
4,448
3,811
3,257
15,343
3,004
2,259
659
1,878
2,488
5,055
13,945
3,241
2,037
860
3,202
2,552
2,052
14,313
2,814
2,322
1,035
2,211
2,556
3,375
15,973
3,063
2,202
1,263
2,409
2,753
4,283
14,855
3,602
2,661
1,120
1,382
2,802
3,288
16,788
4,758
2,649
1,533
2,069
2,792
2,987
17,401
4,025
3,645
1,645
2,051
2,914
3,121
19,556
4,202
3,542
1,533
3,468
2,958
3,853
164
638
102
1,622
225
329
1,147
9,956
208
1,424
209
514
180
537
613
13,221
1 Breakdown
of COGS and SG&As are unaudited.
costs include royalties paid to third-party developers for the right to publish their games.
3 HR cost includes salaries, bonuses and benefits for our live game developers, who support post launch servicing, updating and support for our games.
4 Other (COGS) primarily consists of depreciation and amortization of assets related to existing games, connection fees (mainly comprised of co-location and datacenter fees, Internet
bandwidth and access fees), and the costs of purchasing and maintaining our servers and computer equipment.
5 PG Fees in SG&A include commissions made to external payment gateway companies when users purchase in-game items in PC Online games that we service. It also includes
mobile carrier-related commissions we pay regarding our Japanese browser games and commissions we pay to Apple / Google regarding our native games globally.
6 Other in SG&A includes platform commission fees related to mobile browser games.
7 Other Income includes other non-operating income, reversal of deferred revenue, gain on sale of properties, and gain on change in equity.
8 Other Expense includes other non-operating expenses, loss on sale/disposal of properties, loss on impairment of tangible fixed assets, loss on impairment of intangible assets, loss
on impairment of other fixed assets, loss on change in equity, and loss on liquidation of subsidiaries. Q2 2013, Q4 2013, Q1 2014, Q2 2014, Q3 2014 and Q4 2014 Other Expense
includes impairment of game IP and impairment of goodwill.
2 Royalty
31
P&L Below Operating Income
(Unit: ¥ millions)
FY2013
Operating Income/(Loss)
Finance Income 1
Finance Costs 2
Equity income/(losses) of affiliates,
equity method companies
Income/(Loss) before Income Tax
Tax expense
Net Income/(loss) 3
Q1
¥20,716
2,336
196
Q2
¥13,425
2,342
1,471
(268)
(99)
22,588
(7,238)
15,150
14,197
(2,875)
11,365
FY2014
Q3
¥16,237
739
3,138
Q4
¥327
1,244
3,819
15
258
13,853
(5,712)
8,054
(1,990)
(2,519)
(4,437)
Q1
¥21,171
1,014
385
Q2
¥9,962
1,024
3,655
Q3
¥15,124
5,122
360
(32)
(73)
(93)
21,768
(5,446)
16,144
7,258
(3,089)
4,085
19,793
(6,132)
13,585
Q4
(748)
5,381
781
0
3,852
(8,583)
(4,498)
1 2013
Q1, Q2 and 2014 Q3, Q4 Finance Income are mainly caused by FX. 2014 Q4 Finance Income is primarily due to the US dollar and Chinese yuan to Korean won FX conversion
gain related to foreign currency deposits & A/R in Korea.
2 2013 Q2 Finance Costs are primarily due to a loss recorded from the disposal of JCE shares. 2013 Q3 Finance Costs are primarily due to the U.S. dollar to Korean won exchange
rate impact chiefly associated with Dungeon&Fighter royalties from China. Finance cost for Q4 2013 includes impairment loss of equity method affiliates, mainly from 6waves.
Impairment losses in equity method affiliates are recorded in finance costs under IFRS. 2014 Q2 Finance Costs are primarily due to the US dollar to Korean won FX conversion loss
related to foreign currency deposits & A/R in Korea.
3 Net income/(loss) refers to net income attributable to owners of the parent, as stated in Nexon’s consolidated financial results.
32
Key Cash Flow Statement
(Unit: ¥ millions)
Cash flows from operating activities
12 months ended
December 31, 2013
12 months ended
December 31, 2014
¥60,208
¥58,118
Cash flows from investing activities
(6,345)
(61,820)
Cash flows from financing activities
(13,033)
(27,050)
Net increase / (decrease) in cash and cash equivalents
40,830
(30,752)
Cash and cash equivalents at beginning of fiscal year
84,736
138,843
Effect of exchange rate change on cash and cash equivalents
13,277
9,638
138,843
117,729
Cash and cash equivalents at end of fiscal year
33
Balance Sheet
(Unit: ¥ millions)
December 31,
2013
Asset
Current Assets
Cash and cash equivalents
Other current assets
Total current assets
Noncurrent assets
Tangible assets
Goodwill
Intangible assets
December 31,
2014
¥138,843
78,956
217,799
¥117,729
140,396
258,125
22,080
45,802
26,653
24,039
35,426
16,574
106,517
201,052
418,851
102,858
178,897
437,022
Current tax liabilities, current
8,502
12,836
Current borrowings
Others
Total current liabilities
Noncurrent liabilities
Non-current borrowings
Others
Total noncurrent liabilities
Total liabilities
13,408
28,543
50,453
13,180
31,007
57,023
34,605
20,734
55,339
105,792
23,244
11,278
34,522
91,545
Equity
Issued capital
Share premium
Treasury shares
Other equity interest
Retained earnings
Non-controlling interests
Total equity
Total liabilities and total equity
51,952
50,688
(0)
74,468
131,374
4,577
313,059
418,851
52,481
40,830
92,044
155,025
5,097
345,477
437,022
Others
Total noncurrent assets
Total assets
Update
5/7
Liability
Current liabilities
34
Glossary of Terms
Term / Abbreviation
Meaning
AOS
AOS is a sub-genre of the real-time strategy genre, in which two teams of players compete with each other in discrete
games, with each player controlling a single character through an RTS-style interface.
FPS
(first person shooter)
A game in which the player plays from the point of view of the game character in three-dimensional graphics.
RTS
(real-time strategy)
A game that is usually played from a third-person perspective, in which the player controls vast numbers of in-game
characters in a tactical scenario.
MMORPG
(massively multiplayer online role playing game)
An online role-playing game that has a “massive” number (usually several hundred or more) of players who play
concurrently.
MAU
(monthly active user)
Update
5/7
The total number of accounts of users who log in and play a particular game in a given month.
ARPPU
(average revenue per paying user)
Online game net revenues for any given period divided by the average number of paying players of such games during the
period.
Pay Rate
The number of paying users divided by monthly active users for any given period of time.
MCCU
(maximum concurrent users)
The maximum number of users concurrently accessing a game at a particular moment. MCCU is generally used to
measure the popularity of a game.
Closed Beta
A trial period during which a trial model (beta version) of a game is tested by a limited number of users or groups.
Open Beta
A trial period during which a trial model (beta version) of a game is tested without restrictions on participation.
Tier One Update
Large scale updates to existing PC games typically launched in Q1 or Q3 around peak season.
Tier Two Update
Smaller updates to existing PC games released throughout the year.
Immersive Games
Games that are designed to be played continuously for hours and enable thousands of concurrent users to interact with
each other in real time. Our games are architected to evolve over years, in contrast to packaged goods games, which
often have finite story lines and comparatively less open-ended player engagement.
35
Disclaimer
This presentation is prepared to offer reference information about NEXON group to the investors and is intended to generally provide investors and
analysts with financial and operational information about Nexon, but not to solicit or recommend any sale or purchase of stock or other securities of
Nexon. NEXON Co., Ltd. (“Nexon”) has not verified and would assume no responsibility for the accuracy, appropriation, or completeness thereof. This
presentation does not contain all relevant information relating to Nexon or the sale of its shares, including, without limitation, the information that would
be stated under the captions “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business”
in an annual report. Any investment decision with respect to any shares of Nexon should be made solely upon the basis of the information contained in
the disclosure documents and is qualified in its entirety by reference to the detailed information appearing in the disclosure documents.
This presentation includes non-GAAP and non-IFRS financial measures, including but not limited to key performance indicators, as well as ratios
calculated on the basis thereof. These non-GAAP and non-IFRS financial measures should not be considered in isolation or as a substitute for the most
directly comparable financial measures included in our consolidated financial statements and presented in accordance with IFRS.
This presentation includes forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipate”,
“assume”, “believe”, “estimate”, “expect”, “forecast”, “may”, “plan”, “potential”, “predict”, “seek”, “should”, or “will”, or by other similar terminology. These
statements discuss expectations, identify strategies, contain projections of Nexon’s financial condition or results of operations or state other forwardlooking information. The forward-looking statements in this presentation are subject to various risks, uncertainties and assumptions about Nexon’s
business and results of operations. The expectations expressed in these forward-looking statements may not be achieved, and actual results could differ
materially from and be worse than expectations. Potential risks and uncertainties that could cause actual results to differ materially from expectations
include, without limitation:









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Continued growth and popularity of Nexon’s key titles;
Nexon’s ability to maintain favorable relationships with key licensing partners;
Nexon’s continued ability to offer games in China, through local partners or otherwise;
Nexon’s ability to compete effectively in the online games industry;
Nexon’s ability to address hacking, viruses, security breaches and other technical challenges;
Fluctuations in currency exchange rates;
Nexon’s ability to maintain and further develop its brand name;
Effective acquisition of new companies, businesses, technologies and games from third parties and the possibility of recognizing impairment
losses;
Continued growth of the online games market, including the underlying infrastructure, and free-to-play/item-based revenue generation model;
Nexon’s ability to adapt to new technologies;
Nexon’s ability to enter into licensing arrangements for third-party titles on terms favorable to it;
Effective defense of Nexon’s intellectual property; and
Legislative, regulatory, accounting and taxation changes in the countries in which Nexon operates.
Nexon does not intend, and disclaims any duty, to update or revise any forward-looking statements contained in this presentation to reflect new
information, future events or otherwise. We caution you not to place undue reliance on the forward-looking statements contained in this presentation.
36

Investor Presentation Q4 2014

Transcription

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