Nexon achieved its highest-ever quarterly performance in Q1 2026, reporting revenue of ¥152.2 billion (approx. ₩1.42 trillion) and an operating profit of ¥58.2 billion (approx. ₩542.6 billion). Revenue and operating profit increased by 34% and 40%, respectively, year-over-year. This performance was driven by the global success of the new IP 'ARC Raiders' and the robust growth of the 'MapleStory' franchise.

'ARC Raiders' surpassed 16 million units in cumulative sales within six months of its release. Over half of its active players have logged more than 100 hours, with total playtime exceeding 1.5 billion hours. Nexon plans to sustain this momentum with the 'Frozen Trail' update in October, which will include a massive new map and expanded story content.

The 'MapleStory' franchise saw a 42% year-over-year revenue increase, bolstered by the success of 'MapleStory Grow' and 'MapleStory Worlds.' While Nexon expects a moderate performance in the second quarter due to the base effect of 'Dungeon & Fighter' and 'Mabinogi Mobile,' it anticipates a rebound in the second half of the year through various catalysts, including the overseas launch of 'Mabinogi Mobile,' the Korean publishing of 'Overwatch,' and the release of 'Dungeon & Fighter: IDLE RPG.'

Nexon has also solidified its plans for structural improvements to enhance capital efficiency and shareholder return policies. The company is implementing a cost-management policy to keep labor costs and headcount at previous-year levels and has confirmed a ¥30 billion share buyback along with an annual dividend of ¥60 per share. Additionally, Nexon signed a 10-year renewal for the PC service of 'Dungeon & Fighter' with Tencent and decided to transfer the development of the Chinese mobile version to Tencent to strengthen local expertise.

Earnings Call Q&A

Regarding 'ARC Raiders' monetization: The upcoming 'Frozen Trail' update in October is a mix of free content and a premium pass. Can we expect a rebound in profitability after this update.

CEO Lee Jung-hun = This October update is the largest since the launch of 'ARC Raiders.' User expectations are high, and we are internally very optimistic. Observing community reactions and play patterns since launch, we confirmed that users want deeper core systems and richer experiences rather than just a simple accumulation of content. This is the primary goal of the update. We will introduce a massive new map, new goals for endgame players, and story content exploring the origins of the ARC, which will lead to significant changes in the second half of the year.

In terms of monetization, we expect the large-scale free update to bring back lapsed users and encourage purchases through new user acquisition. At the same time, we are offering a paid premium reward pass that expands customization options, such as character skins. As we have announced a shift in our live service direction toward a major update cycle of six months or more, we ask for your continued interest.

The Chinese 'Dungeon & Fighter' franchise has seen lower revenue compared to four or five years ago. Is there a structural problem where the franchise itself is aging, making it difficult to maintain revenue as the user base grows older and trends shift?

CEO Lee Jung-hun = That question is a fundamental concern for every developer managing long-term live games. Online games are like living organisms; user inflow and outflow occur every moment. For long-running projects like 'Dungeon & Fighter' or 'MapleStory' that have been serviced for over 15 years, daily inflow might seem minimal, but when converted to an annual basis, a vast number of users are joining.

The user base is circulating, and the idea that metrics decline simply because users are aging is inaccurate. The current problem is that the update direction for this action RPG has become stagnant, making it predictable for users. Instead of similar patterns of dungeons or level cap expansions, we need freshness in design. This is a matter of content quality and direction, not the aging of the user cohort.

As a countermeasure, Nexon, Neople, and Tencent have been exploring ideas to provide freshness for several years, and the results will be reflected in the game starting in the second half of this year. We are carefully preparing a concrete plan to apply the successful portfolio expansion strategy used in the 'MapleStory' franchise to 'Dungeon & Fighter.'

Regarding the Chinese 'Dungeon & Fighter Mobile,' the guidance for the last quarter expected a flat performance, but that was not the case. What is the analysis, and why was the effect of the level cap increase minimal? Also, does transferring development to Tencent mean a reduction in the Korean development team and a change in the cost structure.

CEO Lee Jung-hun = I will answer from the perspective of the entire 'Dungeon & Fighter' franchise. In the second quarter, KPIs such as traffic and user engagement showed meaningful achievements, but revenue metrics were lower than expected. Traffic remains stable for both mobile and PC. For the PC version, the goal is to maximize engagement through the June anniversary event and the October National Day update, and to maintain retention until the major update next year.

Mobile traffic increased with the March update, but it lacked sustainability. Users are not motivated by the stagnant progression system and want fresh content that they have not experienced on PC.

Transferring development to Tencent does not mean a reduction in the Korean development team. The Tencent development team will accelerate the development of content tailored to local user tastes, while the Korean team will maintain creative control based on their deep understanding of the IP. This year, both teams will work together to launch updates that create a new meta and play motivation.

We are also working in parallel to increase content production speed by introducing AI-based workflows. While it is difficult to increase update speeds for a 20-year-old 2D dot-based game, we are making progress in increasing content supply by automating repetitive tasks.

The goal for the Chinese service is growth, not just recovery, and the 10-year renewal announced today will be a stable foundation for this growth.

Does the transfer of development to Tencent change the revenue-sharing ratio? Is the revenue target in the guidance based on the ratio before or after the change.

CFO Shiro Uemura = The revenue figures are the same. The revenue-sharing ratio is not included.

The guidance from last quarter expected an increase of ¥9 billion, but that level of increase is not appearing. There must be bonuses related to 'Dungeon & Fighter' performance or 'ARC Raiders'; are there other factors lowering labor costs.

CFO Shiro Uemura = 'ARC Raiders' performance is in line with expectations, not exceeding them. There are instances where deferred revenue can make the reported figures look larger. There are two factors lowering labor costs: one is that we are controlling hiring, and the other is the reversal of bonus provisions for underperforming titles. We expect labor costs to remain at a similar level to the previous year on an annual basis.

You mentioned that the second quarter would be the lowest in the fiscal year and also noted catalysts for a turnaround. Should we understand that performance will improve toward the second half of the year? Please share the full-year outlook.

CFO Shiro Uemura = It is our policy to provide only the next quarter's guidance, so it is difficult to provide annual guidance. Qualitatively, among our three major franchises, 'Dungeon & Fighter' will do its best to prepare for the June anniversary event and the National Day holiday, and 'MapleStory' will continue its positive trend. 'FC' will use the June World Cup as a driver to increase engagement. 'ARC Raiders' is expected to gain momentum through its major October update. There are numerous catalysts in the second half, including the Taiwan/Japan launch of 'Mabinogi Mobile,' the Korean publishing of 'Overwatch,' 'Dungeon & Fighter: IDLE RPG,' and 'Azur Promilia.

If there are many positive factors starting in the third quarter, should we understand the second-quarter slump as temporary.

CFO Shiro Uemura = It is true that the Chinese business is in a difficult situation and that reconstruction will take some time. How we reconstruct the Chinese business is a very important task. Excluding that, there are various catalysts we can rely on, so I believe it depends on whether we can overcome the challenges in China and maintain our growth trajectory.

What is the sensitivity to exchange rate fluctuations and the annual impact.

CFO Shiro Uemura = We do not predict exchange rates, but we are assuming an exchange rate of 159.¥33 to the dollar for the second quarter. A 1-yen fluctuation in the exchange rate results in an impact of ¥750 million on revenue and ¥140 million on operating profit.