According to the latest report, Nexon is preparing for global expansion and has its sights set on Western markets. Nexon is the developer of one of the oldest online role-playing games, with the company’s most popular video games attracting close to 1 billion registered users.
Nexon is one of the 10 most valuable video game companies in the world, yet outside of Asia, the company is little known. The company’s $22 billion market cap is bigger than Take-Two Interactive or Roblox, the company behind Grand Theft Auto.
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Last year, the company completed the acquisition of Stockholm-based Embark Studios, whose founders led the development of the hit Battlefield franchise. In 2022, the company also invested $400 million for a minority stake in the Russo Brothers’ studio AGBO, an independent studio founded by Anthony Russo and Joe Russo, who are directors of The creative duo of Marvel’s Avengers: Endgame and Avengers: Infinity War.
“The idea is to combine what we’re really good at (making virtual worlds last and grow forever) with what they’re really good at,” Nexon CEO Owen Mahoney told the media. Nexon is working with AGBO on how to expand its gaming franchises into film or television, and develop virtual worlds or video games inspired by AGBO’s films.
Jason Bergsman, CEO of AGBO, said: “We are highly aligned with Nexon’s vision, and we recognize that audiences have come to desire to truly immerse themselves in the IP they care about most.”
The two companies are in early talks to adapt Nexon franchises such as MapleStory and Dungeon and Fighter, games with rich stories and passionate fan bases. Those talks are still at an early stage, said a person with direct knowledge of the situation.
They’re also discussing creating a game or virtual world inspired by Battle of the Planets, an iconic Japanese anime show from the 1970s that AGBO is developing into a feature film. Mahoney hopes to use Nexon’s experience in running “real-time games” (updating games while they’re running) to launch big-budget games with a Western awareness, like Embark Studios’ free-to-play shooter ARC Raiders.
Embark founder Patrick Soderlund had led Dice, which developed the Battlefield franchise and was acquired by Electronic Arts when Mahoney was the company’s head of mergers and acquisitions.
Nexon has been trying to avoid getting caught up in the enthusiasm surrounding the “metaverse” that has gripped tech giants Microsoft and Facebook. “No one can define it, and most importantly they can’t articulate why it’s such an important concept,” Mahoney said. “It’s a huge, but useless thing.”
Early on, Nexon started to take on features that are now standard in the gaming industry, including in-game virtual currency and a free-to-play business model. These features were introduced in the racing game KartRider. “Running” has been running for nearly 20 years and is one of Nexon’s “pension insurance”.
The company’s most popular franchise, the arcade fighting game Dungeons, and Warriors have earned them more than $20 billion since 2005, more than a “Star Wars” or “Harry Potter” movie franchise The total box office revenue of operating projects is even more.
A big new challenge for the company as part of Nexon’s expansion is generating returns from higher-budget Western games. Citigroup analysts wrote in March that “Nexon doesn’t have much experience running realistic games for hardcore gamers.” The agency rates them as “neutral” on the stock.
In an era of budgets as high as $100 million, Nexon wants to control the cost of developing games. For example, they use machine learning to animate some character movements, rather than relying on human employees. “I don’t really care what happens in the first quarter or two. I care what happens between the second year and the 20th year,” Mahoney said.
