Table of Contents

1. Introduction

2. Nexon Continues to Grow but Concerns About Sustainability and Scalability Remain

2-1. 29 Years of Growth Trajectory Through Astute Understanding of the Gaming Industry Trends

2-2. Pursuing Continued Growth Based on Stable Operation of Core Live Services and ‘Big & Little’ Strategy

2-3. Yet, Challenges in Sustainability Arise from Structural Limitations of the Existing Business Model

3. Finding a Solution via Blockchain

3-1. MapleStory Universe: Nexon's Biggest IP Challenges Blockchain Gaming 3-2. Aiming to Secure Sustainability by Maximizing User Reward Experience via UGC and MODs 3-3. Components of MapleStory Universe: MapleStoryN, World, SDK

4. Conclusion

 

 

 

 

1. Introduction

Nexon has always been at the forefront of significant shifts in the gaming industry. As will be discussed in detail, Nexon pioneered the online gaming revolution in the 1990s with Korea’s first online game, The Kingdom of the Winds, in an era dominated by single-player CD titles. Additionally, in 2000, Nexon devised the Free to Play (F2P) model, which forms the basis of today’s online game revenue models, and acquired Korea’s biggest game IPs, MapleStory and Dungeon Fighter.

Nexon has established itself as a pioneer, not just excelling in game development but also shaping culture and leading the industry with visionary foresight and innovation. Recently, Nexon announced the development of a major blockchain game using its biggest IP, MapleStory. What potential did they see in blockchain gaming? This report aims to explore the specific value blockchain technology can bring to the gaming industry.

2. Nexon Continues to Grow but Concerns About Sustainability and Scalability Remain

2-1. 29 Years of Growth Trajectory Through Astute Understanding of the Gaming Industry Trends

Since its inception in 1994, Nexon has overcome numerous challenges and continues to grow impressively. Over the past decade, Nexon has recorded a Compound Annual Growth Rate (CAGR) of 12.5%, growing its revenue from KRW 940B in 2012 to KRW 3.5T in 2022. For context, in 2022, Netmarble, NCSoft, and Krafton each achieved revenues of KRW 2.7T, 2.5T, and 1.8T respectively (77%, 71%, and 51% of Nexon’s revenue).

Source: Nexon Q3 2023 Earnings Report

As of 2022, revenue by region was 60% from Korea, 24% from China, 3% from Japan, 6% from North America and Europe, and 7% from other regions. In Korea, MapleStory and FC Online, and in China, Dungeon Fighter, were key drivers of growth. In Japan, Blue Archive, and in North America, Europe, and other regions, the newly released Dave the Diver in June contributed to revenue growth.

Over the past five years, the mobile gaming segment doubled from KRW 475B to KRW 950B, accounting for about 31% of total revenue. Considering Nexon's relatively cautious approach to entering the mobile market during the mobile gaming boom of 2013-2014, this growth is even more noteworthy. Nexon’s major mobile game lineup includes FC Online Mobile, MapleStory M, HIT2, Dungeon Fighter M, Blue Archive, and The Kingdom of the Winds: Yeon.

Source: Nexon Q3 2023 Earnings Report

Nexon’s sustained growth can be attributed to its ability to innovate and launch popular games, coupled with aggressive acquisitions of high-potential IPs. In 1996, Nexon released Korea's first online game, The Kingdom of the Winds, revolutionizing the game industry and solidifying its presence in the Korean gaming market. Following the failure of its subscription model for QuizQuiz (Qplay) in 2000, Nexon introduced the first and now foundational Free to Play (F2P) model, leading to the creation of Crazy Arcade: BnB and KartRider. In 2001, Nexon released Mabinogi, the first MMORPG using cartoon rendering technology.